COVID Devastation on Financial Results: Who Are the Winners and Losers?

Camera manufacturers have faced a tough time in recent years as sales dwindled, whilst photographers have demanded ever better products and the development of mirrorless systems. COVID-19 added insult to injury by essentially halting production. How have manufacturers fared? Everyone is a loser, but who has lost less than anyone else?

Sales markets are fickle things and the status quo usually only suits those that are currently selling well. Which is why change should be seen as an opportunity: it offers the potential to disrupt, the ability to effect a new direction by designing innovative products and so generating new sales. Change offers the chance to alter the status quo and so challenge the existing market leaders; in this regard photography is no different and constant technical innovation is one of the outcomes we see.

How Did 2019 End?

In reviewing the impact of COVID-19 it’s pertinent to see how 2019 ended for manufacturers. The 2019 Nikkei Asian Review provides a good starting point for the camera sector and this shows that Canon increased market share by 2.4% to 45.4%. That’s a large increase and shows how resilient Canon’s business is. Meanwhile Nikon lost 1.6% dropping to an 18.6% share, letting Sony in to the number two spot for the first time (20.2%). This illustrates the significant performance failures of Nikon’s Imaging Division as much as Sony’s successes. Fuji and Panasonic are tied at fourth (4.7%) with Olympus dropping out of the top five.

Of course market share is only part of the equation; knowing what is happening to the whole market is just as important. CIPA sales data show a drop from 19.5M to 14.88M (-23%) units. CIPA reports on three segments: integrated lens (principally compacts; 6.7M), DSLRs (4.5M), and mirrorless (4M). Compared to 2018 (8.6M, 6.6M, and 4.1M respectively) and 2017 (13.3M, 7.6M, and 4.1M respectively) the change is obvious; compact sales have imploded, DSLRs are in steady decline, whilst MILCs are holding steady. It’s also worth noting that the MILC sector is becoming crowded and the impact of Nikon, Canon, and the L-Mount Alliance all releasing new models is being felt. That said, the strategy has played to Sony who claimed the number two spot in ILCs in 2018, subsequently becoming the number one seller of full frame cameras in Japan in 2019.

There are two key questions manufacturers are asking themselves. Firstly, how many cameras do consumers want to buy each year and, secondly, what is the split between MILCs and compacts? It’s quite clear from the numbers above that the DSLR will no longer sell in large quantities. This was the conundrum facing manufacturers as they started 2020; little did they know it would take a back seat.

The Impact of COVID-19

When we talk about change it’s often in terms of winners and losers. However, the biggest change currently affecting the market is COVID-19 and in this new world there are no winners. All sales, across the board, have declined meaning there are only losers. Returning to the CIPA sales data we can see (below) the impact of COVID-19 on camera shipments, decimating them, with May showing an 83% drop on 2019. If we look at cumulative figures to date then we are staring down the barrel of a 50% drop on 2019 or about 7.4M cameras. That seems unlikely to happen with the bounce back in numbers for July, but given the current financial problems facing the sector, this couldn’t have come at a worse time.

It’s important to remember that all change offers opportunity, so in this sense we should consider individual losses relative to other manufacturers and how that impacts any potential future sales. With last year’s financial results complete and returns for the first half of 2020 published, we have a basis to understand and compare the main manufacturers.


If there is one word to summarize Nikon’s year (which runs April to March) then it would be this: brutal. Its revenue dropped from $6.7B in 2018 to $5.6B in 2020. Its Imaging Division (representing 38% of revenue) has now been surpassed by the Precision Equipment business for sales and profit; indeed this is where the bulk of Nikon’s profit and growth is coming from but Imaging remains important and leaves them exposed. Not only that, but Imaging accounted for the bulk of losses. The Q1 (April-June) results show revenue of $0.6B, down from $1.35B last year; this shines a light on the devastation of COVID-19 as business ground to a halt. Crucially Nikon had an operating loss of $0.18B. Their medium term strategy aims to address specific deficiencies and cutting costs — particularly manufacturing capacity in Thailand and Laos — is at the forefront of this process. Make no mistake, like Olympus, Nikon cannot afford to bleed losses through its Imaging Division.


Canon (who run their accounts on a calendar year) finished 2019 with revenue of $36B, down from 2018 $37.2B, with profits reducing from $3.2B to $1.6B. On the back of what is a profitable business, albeit with decreasing income, the Imaging Unit (which comprises 22% of revenue) saw its sales drop by 17% to $7.5B, however that masks the 65% drop in profit to $0.4B. Interestingly inkjet printers fall in this division and make up a third of sales, which means that Canon and Nikon have broadly equivalent revenue streams from cameras, however Canon has a greater market share and is therefore selling more units. Inkjet printer sales have risen slightly and — importantly — the division makes a profit as a whole.

In terms of results for Q2 (April-June), Canon report $6.3B revenue with a loss of $0.16B compared to $8.5B and $0.4B profit respectively for 2019. Sales for Imaging were down 31%. If there was a word to describe Canon’s year so far then it would be “less”. Yes, business is significantly affected by COVID-19 but they are still selling.


Sony is in different league to both Nikon and Canon and in that respect they are all interesting businesses to compare. But whilst all are global conglomerates, Nikon and Canon are predicated on optical/imaging companies. Nikon are optical almost entirely, whereas Canon are more diversified. Sony on the other hand is an electronic, entertainment, and digital do-it-all, with $78B of revenue in 2020 (which runs April to March) to show for it, pulling in an $8B profit. This compares to $82B and $8.4B respectively for 2019, however it’s difficult to read too much in to this as, being large, its camera related businesses are both subsumed within departments as well as spread across them (specifically Electronic Products and Imaging Solutions). Perhaps more telling are the Q1 (April-June) results which show revenue and profit of $18.5B and $2.15B, compared to $18.1B and $2.17B last year. This initially counter-intuitive result (only a 1.1% drop in profit) is indicative of their business diversity: digital entertainment (and particularly gaming subscriptions) are successful. The only reference to camera sales is in the following bland understatement

Sales and profit from digital cameras are being significantly impacted by a substantial slowdown in demand around the world

2021 and Beyond

Camera production is a strange market segment which is dominated by three manufacturers with Canon accounting for nearly 50% of all sales. That in itself is remarkable as other manufacturers are simply not relevant to the big picture. That isn’t to say a healthy profit can’t be made or that these products are inferior, just that they have nowhere near the clout of the big three. What these players do is critical to the future of the sector which, by the very nature of the devices produced and consumers purchasing, is heavily invested in the past.

So what are the key themes we can draw from looking at the last 18 months? The contraction of camera sales continued in 2019; the end of 2020 will make for grim reading as the chart above suggests with unit sales of 8-10M. The mixture of customer type and camera purchase will shift the relative balance between manufacturers but we can be sure that compact sales will continue to decline rapidly, perhaps more so with uncertainty over conspicuous consumption by home users. This is continuing the retrenchment to interchangeable lens cameras that is seeing the rapid demise of the DSLR. Will 2020 be the first year that MILCs outsell DSLRs?

In to this melting pot you need to add the awakening of the kraken: the behemoth that is Canon has finally released its double punch of the R5 and R6, on the back of disappointing MILC sales to date (although that hasn’t stopped it selling lots of them!) Its head-to-head with Sony in the full frame segment will be fascinating as it unleashes its resources to plow ahead in to a mirrorless future.

Perhaps the biggest news contained in these results is the seismic implosion of earnings at Nikon which highlights the massive exposure of the Imaging Division. It needed to return to profitability in 2019 and COVID-19 has simply exposed a weakness in its bottom line. It has re-factored its camera lineup and is now filling out the lenses that are available. Is it enough to tempt buyers in to the Nikon fold or have they lost too much ground to Sony’s established presence or Canon’s strength in the marketplace? Not only did Nikon have an operating loss, but it has bled sales badly, with revenue down 55% in the last quarter. Canon on the other hand saw a 26% drop in revenue to a similar loss, but that’s on the back of much higher sales showing that its finances are inherently more sound.

Quite how much COVID-9 will affect business plans for the coming year remains to be seen. Sony is clearly in the strongest financial position, whilst Canon is performing well even if income has stuttered. The biggest change will be to consumers and how strongly purchasing power recovers to reinflate the market. This will undoubtedly shift the balance of power and I wouldn’t like to bet against both Canon and Sony increasing their market share at the expense of Nikon. Indeed, this is what Nikon thinks as they estimate a total ILC market of 4.8M units next year, with a shrinking market share of 16.6%. Will Canon capture over 50% of the market? This will be a formative year.

Lead image composite courtesy of MediaModifier and BlendTimer via Pixabay, used under Creative Commons.


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