Archive | December, 2015

Samsung and Ricoh: Different responses to a shrinking market

3 Dec

This week saw the announcement that Samsung would be slowly backing out not only of the German market for “digital cameras, camcorders and accessories”, but the UK as well. As of this writing, it seems that all products are still available, but this may narrow to a trickle and eventually cease. It’s certainly clear that Samsung will not be investing in advertising and promotions in this market any more.

Interestingly, this occurred only weeks after the latest Ditch the DSLR event stateside in Seattle, where interested parties could exchange their ageing Canon DSLRs (let’s be honest, that’s the bulk of them) for an entry level Samsung NX500 MILC (earlier events offered the perhaps more attractive, certainly higher priced NX30). I interpret that promotion as having the dual purpose of getting people talking about Samsung MILCs as well as creating a userbase for lens sales.

Ricoh has been following a similar fahrplan for the last 18 months or so, selling their K-50 and K-S1 camera models extremely affordably with a basic lens included, all at 200-300 USD – recently there was an offer at Samy’s for a K-S1 and lens at $179. A basic DSLR system is therefore now cheaper than most compacts. How is that possible?

Well, all camera companies are currently operating in a rapidly shrinking market – that much industry observers have known for years, and comes at no surprise to anyone. What’s interesting is that different makers have responded very differently to this change. Samsung is apparently deciding that in spite of being one of the electronics giants of the world, like Toshiba they don’t need to have a horse in this race, contrary to Sony and Panasonic. Sony and Panasonic meanwhile have sought to minimise R&D effort and instead keep old models afloat with firmware updates – lossless RAW in Sony’s case and the post-focus feature in Panasonic’s. An interesting model to watch for the future.

Ricoh, on the other hand, is putting the razorblade model into overdrive and capturing the last on-the-fence stragglers that felt they couldn’t afford a DSLR, thereby broadening its base for future lens sales. Because that userbase is now fresh, it will probably yield higher per capita follow-up sales than the more established user bases of Canon or Nikon (although those are considerably larger overall). It may have also put the hook in some people for Ricoh’s upcoming full frame camera, and may have lightened the load on current Pentax users so that they might be able to actually afford the full frame when it comes around. For those customers, this may almost feel like delayed bundling – get your replacement/second body now, pay your full frame later.

Ricoh has for the past few years consistently followed a pricing strategy that sees them entering new products at a price that’s almost unachievably high, to then gradually reduce the price over the next 12 to 18 monhs, to about half or less in the case of camera bodies, but more modestly for lenses. Samsung, on the other hand, has left its blockbuster NX1 camera at the same high price as when introduced over a year ago, at least in some localities – a price that some say is too high when one can get a full frame camera for the same money. On the other hand, the Samsung offers a slightly higher pixel count than those full frame cameras, allows for more compact and lighter lenses for the same effective magnification, is weather-sealed, shoots full resolution at 15fps (buffer of 1.3s RAW or 3.5s JPEG) and does 4k video. Nonetheless, offering rebates in price-conscious markets such as Germany could have driven more sales. On the other hand, the buying of extra lenses down the road are an unproven hypothesis in this unprecedentedly saturated market. Perhaps Samsung did not expect its customers to invest in macros, teles and superzooms – the 16-50/2-2.8 certainly offers a lot, but also sells for a premium.

Overall, one feels that Samsung is quitting just as they were starting to win. It’s sad to see them leave with such a well-specified product. On the other hand, that same test is still ahead for Ricoh when they make a late but much-anticipated entry to digital full frame in spring.

Advertisements