Obsessed with technology?
Subscribe to the latest tech news as well as exciting promotions from us and our partners!
By subscribing, you indicate that you have read & understood the SPH's Privacy Policy and PDPA Statement.
The State of Mirrorless Cameras 2012
By Alvin Soon - on 21 May 2013, 5:35pm

We just had the last Japanese camera company announce their financial results for the 2012 financial year (except for Canon, which ends its financial year on December 31st, the rest of the companies below end theirs on March 31st). Let’s look at each company’s results through the filter of mirrorless cameras, and try to pry out how the segment is doing in the market.

Let me confess: This report is long and the numbers can get tedious. Skip ahead to the conclusion at the end for the executive summary.


Canon reported a drop in net sales, gross profit and operating profit for FY 2012 (ended December 31st, 2012). Net sales were down 2.2% to ¥3,479.8 billion (US$39.99 billion), while gross profit dropped 5% to ¥1,650 billion. Operating profit dropped by 14.3% to ¥323.9 billion (US$3.72 billion) compared to ¥378.1 billion in the previous year.

When sales are broken down by business unit, the Imaging System unit reported an increase in sales, up 7.2% to ¥1,405,971 million (US$16.16 billion) compared to ¥1,312,044 million in 2011. Operating profit however, decreased 0.5% to ¥210,318 million (US$2.41 billion) compared to ¥211,294 million in 2011. The Imaging System unit makes the second-most money in terms of sales, only the Office unit trumps it.

The Imaging System unit compromises of Canon’s digital cameras, as well as camcorders, printers, scanners, broadcast equipment and even calculators (don’t ask us why). Canon reports that sales of interchangeable-lens digital cameras grew by 14% in FY 2012, while sales of compact digital cameras contracted by 2%. The overall growth rate for sales of digital cameras was up by 2%, and they forecast that they will continue selling more interchangeable-lens digital cameras in 2013 while selling less digital compacts.

According to Canon, “demand for interchangeable-lens digital cameras continued to display strong growth across global markets while demand for compact digital cameras shrunk not only in developed countries, but also in China and some emerging nations.”

They credit an increase in unit sales of interchangeable-lens digital cameras thanks to their DSLR cameras, especially the 5D Mark III and the 60D. Sales volumes of compact digital cameras remained at the same level as the previous year. While the report mentions Canon’s entering the professional cinematography market with the Cinema EOS System, it doesn’t mention how that initiative performed.

From a mirrorless system camera perspective, it’s telling that their first mirrorless product, the Canon EOS M, isn’t mentioned as a significant driver in the increase of unit sales, but that might just be because it went on sale only in October of 2012.

But it’s also telling how Canon seems to be hedging its bet with mirrorless with the EOS 100D DSLR camera. The body weighs 407g, just 109g more than the EOS M. It’s wider than the EOS M, but thinner than a Panasonic Lumix GH3.

Both the EOS 100D DSLR and the EOS M have 18MP APS-C sensors, but the EOS 100D comes with the proven phase detection AF and optical viewfinder of a DSLR, plus native compatibility with EF lenses. When you put the EOS M side by side with the newer 100D, can you make a convincing case that someone should buy it over the diminutive DSLR?


Fujifilm clocked 0.9% more revenue in the fiscal year ending March 31st, 2013, at ¥2,214.7 billion. Operating income totaled ¥114.1 billion, up by 1% from the previous fiscal year. Net income for Fujifilm Holdings was ¥54,266 million, a 24% increase from the previous year (which recorded a 31.5% drop in net income).

The Imaging Solutions segment reported consolidated revenue of ¥294.8 billion, an 8.6% decrease from the previous year. Fujifilm says in its report “although the sales of the color paper were strong, sales of the electronic imaging business decreased, reflecting the impact of a decrease in overall demand for compact digital cameras and other factors caused Fujifilm’s sales to decline.”

The Imaging Solutions is the only segment to suffer a loss, and is the lowest earner in Fujifilm’s three operating segments, the others being Information Solutions (which reported a revenue of ¥907.7 billion, a 2.2% increase) and Document Solutions (revenue of ¥1,012.2 billion, a 2.8% increase). The Imaging Solutions segment comprises products like color films, digital cameras, photofinishing equipment, chemicals and services.

(As an aside, did you know Fujifilm makes the Astalift line of cosmetics you can find in local stores? For some reason it’s grouped under the Information Solutions segment of Fujifilm’s business.)

Fujifilm puts forward three businesses as priority growth businesses – healthcare, highly functional materials, and documents business – but digital imaging is not mentioned as a key pillar of the company’s long-term growth. We can also expect Fujifilm to slim down their camera catalogue, as Fujifilm President Nakajima says; “We will reduce the sales volume of low-end cameras which compete with smart phones and focus on high value-added products such as X-series.”

From my perspective, while the other camera companies seem to focus on sustaining innovations, Fujifilm seems to be the only one working on revolutionary technologies. They own key technologies which don’t seem to be easily replicated: The X-Trans sensor and the hybrid viewfinder. They also seem to have a keen understanding of what photographers want with their X-series of cameras, but no matter how attractive, the X-series is still admittedly appealing only to enthusiasts; a niche segment of the market.

Fujifilm is also showing an unusual (for Japanese companies anyway) willingness to listen to criticism and a willingness to work with others. They appeared to be listening to their users’ complaints with the X100 when they released the X100S, and as far as I know, is the only Japanese camera manufacturer to work directly with Adobe on compatibility for their camera raw formats.


Net sales of Nikon’s products increased by 10% to ¥1010.49 billion, compared to ¥918.65 billion in the previous fiscal year. However, both operating and net income went down; operating income dropped 36.3% to ¥51 billion, net income suffered a 28.4% drop from ¥59.3 billion previously to ¥42.46 billion.

The Imaging Products business unit’s net sales increased by 28% from the previous fiscal year to ¥751.24 billion, and operating income increased by 12.5% from the previous fiscal year to ¥60.71 billion. Sales for interchangeable lens cameras went up to 6.98 million units, compared to 4.74 million units in the previous year. Sales for lenses also went up to 9.71 million units, compared to 7.13 million units previously. Compact camera sales dropped to 17.14 million units, compared to 17.37 million previously.

While compact camera sales declined slightly, Nikon makes an interesting point in its report; that "compact DSC maintained the same sales volume as the previous year in spite of market contraction of about 30%" which meant that Nikon's digital compact camera sales contracted far less than the market did.

Also according to Nikon’s report, “the Digital camera-Interchangeable Lens Type market continued to show strong expansion, but the market climate took a sharp turn for the worse from the middle of the third quarter, and the compact digital camera market shrank further.” Apparently Nikon’s DSLR cameras “showed steady sales growth for existing products such as the D800” and the Nikon 1 mirrorless series “captured a high market share especially in North America and Europe”.

While you could say that Nikon’s 1 series mirrorless cameras aren’t that enticing for enthusiasts from a specs point of view, they might appeal to casual users who don’t venture beyond the kit lens that came with the camera. Note that in BCN Japan’s 2012 ranking, which tracks the bestselling cameras in that country, the entry-level Nikon J1 took the top spot for bestselling mirrorless camera for the entire year.

It’s interesting how Nikon’s annual report has a section about “Defects in products and services”, in light of the problems with the Nikon D800 and D600:

As concerns the Nikon Group's products and services, advanced quality assurance systems are in place within Japanese and overseas Group companies, as well as production contractors, in order to provide customers with highly trustable and sophisticated products. However, in the rare event that a customer suffers a loss due to a defect in a product or service, there is a possibility that profit and financial position will be adversely affected, there being the risk that large amounts will be incurred in repair expenses and costs related to liability, recall, disposal of products and the like, in addition to the decreased desire of customers to purchase the Group's products and services due to a decrease in customer trust in the Nikon brand.


Olympus’ net sales were down 12.3% from the previous year to ¥743.85 billion, operating income was down 1.2% from the previous year to ¥35.07 billion, and net income was ¥8.02 billion, compared to a massive loss of ¥48.95 billion in the previous year. In Olympus' report, the financial results "reflected the recording of extraordinary income of ¥22,454 million mainly from transfer of business," which probably refers to the transfer of the information and communication business operated by its consolidated subsidiary ITX Corporation to Japan Industrial Partners in September 2012.

Olympus’ Medical Systems segment was the only business segment to report an increase in net sales (13%) and operating income (27.7%), every other segment, including Imaging Systems, reported a decrease (Imaging Systems reported a 16.3% decrease in sales, with an operating loss of ¥23.07 billion compared to a loss of ¥10.76 billion in the previous fiscal year). 

According to Olympus’ report the Olympus OM-D E-M5, TG-1 and TG-2 sold well, but “there was a sharp contraction in the compact camera market due to the popularity of smartphones, leading to further falls in numbers of units sold and unit prices.” The company plans to "substantially reduce number of compact camera models", ceasing production of low-price models entirely, and to slash the target for FY 2014's compact camera sales to half of FY 2013's target.

However, in good news for mirrorless cameras, Olympus intends to focus resources on high-margin mirrorless cameras. In bad news for their staff, they plan to reduce imaging business staff by 30% by March 2014 compared to March 2012 levels. Very tough times for the imaging division.

The company may also face a ¥1 billion fine for breaches of the law due to its accounting scandal. Olympus shareholders have also filed lawsuits against the company; various claims for compensation have been filed, from the tune of ¥6.61 billion to ¥20.85 billion yen.

While Olympus makes exceptional mirrorless cameras and lenses, it’s quite clear that the digital imaging unit isn’t the bulk of Olympus’ business. The flagship Medical Systems business segment accounted for the majority of growth and income for the company in 2012, with Life Science and Industrial Systems coming in a distant second, and Information & Communication third. While the later two experienced a decrease in operating income, only the Imaging Systems segment reported a loss.

The spectre of Olympus' accounting scandal still hangs over the company, as the case is still pending at the Tokyo District Court, as are various lawsuits.


Panasonic’s (PDF link) consolidated sales decreased by 7% to ¥7303 billion from ¥7846.2 billion in the previous year. Operating profit increased 268% to ¥160.9 billion yen from ¥43.7 billion yen in fiscal 2012, but the company still reported a net loss of ¥754.3 billion due to restructuring costs and sales decrease, continuing from the loss of ¥772.2 billion in FY 2012.

The AVC Networks segment reported a 20% decrease in sales to ¥1,373.9 billion, the company says “sales significantly decreased due mainly to sales decline in the digital AC networks business including TVs and the display devices business including panels.” The AVC Networks segment compromises of digital cameras, as well as TVs and PCs, and Panasonic reports sales of digital cameras amounted to ¥102.2 billion in fiscal 2013.

In terms of profit, the AVC Networks segment accounted for 12% of Panasonic's total segment profits for FY 2013. It pales in comparison to Panasonic's most profitable segment, Appliances, which accounted for 41%, and the Eco Solutions segment, which accounted for 37%.

While I've always liked Panasonic's Micro Four Thirds cameras for their ease of use and great video, I must admit that they lack the charisma of Olympus' Micro Four Thirds offering. However, it's doubtful that even if they make cameras as attractive or even more so than Olympus, that they can make a significant dent on their bottom line, as even Olympus' Imaging Systems unit is struggling.

In short, Panasonic is not doing well. For the past five fiscal years (2009-2013), they were profitable only once in 2011 (PDF link). The company optimistically predicts a return to profitability this year as it cuts unprofitable businesses and further restructures; CEO Kazuhiko Tsuga has promised to sell off within two years any loss-making or low-profitability units that fall short of a five percent annual operating-margin threshold.


Sony posted its first net profit in five years. Sales and operating revenues were up 4.7%, from ¥6,493.2 billion in 2012 to ¥6,800.9 billion (US$72.35 billion) in 2013. Operating income came in at ¥230.1 billion (US$2.45 billion), compared to an operating loss of ¥67.3 billion in the previous fiscal year. Net profit was ¥43 billion, compared to a loss of ¥456.7 billion the year before.

The Imaging Products & Solutions business segment reported a 4.1% decrease in year-on-year sales to ¥730.4 billion, which Sony attributes “to a significant decrease in unit sales of compact digital cameras” and “a significant decrease in unit sales of video cameras”, however the drop was “partially offset by significantly higher sales of interchangeable single-lens cameras”.

The Imaging Products & Solutions segment does not make up the most significant percentage of Sony’s sales and operating revenue. Weighing in at ¥730.37 billion; it doesn't compare to Sony’s Mobile Products & Communications segment with sales of ¥1257.618 billion yen or the Financial Services segment which recorded ¥1007.74 billion yen in sales. However, the Imaging Products & Solutions segment does better than segments like Game (¥707.08 million yen in sales) and Music (¥441.71 million yen in sales).

When it comes to mirrorless cameras, Sony’s NEX system has always excelled in image quality thanks to its large APS-C sensor. But the system as a whole suffers from a smaller selection of lenses, which admittedly won’t affect users who don’t buy additional lenses beyond the kit lens. While the NEX camera bodies are small, the lenses are large, but the effect is offset by new collapsing lenses like the new 16-50mm which ships with the NEX-6.


Long story short: The digital camera business was not in good shape in 2012, and none of the Japanese camera companies did exceptionally well.

Canon, Fujifilm, Nikon Olympus and Sony all made money, but only Fujifilm, Olympus and Sony made more than the previous fiscal year, and not mainly from cameras. Panasonic remains in the red. Canon, Nikon and Sony reveal a growth in sales of interchangable-lens cameras, which is a catch-all for both DSLR and mirrorless cameras, and nearly everyone reports a decrease in compact camera sales.

It isn't for lack of good product - it's a broad statement, but generally speaking the latest generation of mirrorless system cameras are all capable performers (well, maybe except for the Canon EOS M's sluggish auto-focus). The digital imaging business isn’t looking like a good market to go into – unless you’re a smartphone manufacturer, which is responsible for the shrinkage of the compact camera market. Those are sales that aren’t coming back, and companies like Olympus are shaving their compact camera line-up to minimize losses.

All the companies report optimism for growth in the interchangeable-lens market, but this reviewer doesn’t see where that growth would come from, short of pushing demand in developing markets or pushing incremental improvements and hoping customers upgrade. It’s also unclear whether the companies with fingers in both DSLR and mirrorless pies are referring to growth in DSLR or mirrorless, as they refer to the entire segment as interchangeable-lens cameras.

When it comes to interchangeable-lens cameras, Nikon is the one with the most skin in the game; the camera segment accounted for 74% of their business in 2012. Canon, Fujifilm, Olympus and Sony have other profitable divisions to fall back on, but only Fujifilm and Panasonic are all-in for mirrorless cameras with no DSLR cameras in their line-up. Olympus has a Four Thirds DSLR E-series they insist is still alive (the rumors are that there will be an E-6 later this year).

Early results seem to indicate that the mirrorless market isn't picking up steam in 2013. Thom Hogan reports the shipment numbers from CIPA and notes that 2013 first quarter mirrorless shipments are only 81.5% of those a year ago. DSLR cameras do not fare much better, Q1 shipments are at 76.8% of last year’s quarter.

It’s been more than four years since mirrorless system cameras hit the market, and we haven’t seen them create new markets like the smartphone revolution. While many significant events could have contributed to the slow growth of mirrorless, like the unstable economy of recent years, a strong yen and the Japanese earthquake and Thailand floods hitting their manufacturing bases, it’s also becoming clear that mirrorless cameras are a revolutionary innovation not a disruptive one, at a scale that isn't enough to be a new market generator and compact/DSLR camera killer.

Alvin Soon

Alvin Soon / Deputy Editor

I like coffee and cameras, but not together.