The mark of a mature system of cameras is the number and quality of available lenses. The most recent news swirling around Canon, its RF mount, and third-party lens manufacturers demonstrates the principal battleground between competing mirrorless brands.
Camera sales go beyond cameras. The success of Nikon F was due to the availability of wide variety of lenses, which were made into the most comprehensive system available. This points to a key selling point for consumers: they want to see a wide range of accessories, and specifically lenses, available. This not only means that they can get the lens they want — be it a 50mm f/1. 8 or a 58mm f/0. 95 — but points to the potential success and longevity of a system, meaning their investment in a camera and its accompanying lenses is not short-lived.
However, this idea is based on a crucial imperative for manufacturers. Lenses lock a photographer into a particular camera system, meaning that not only do you get repeat business, but profit margins can be high on what are increasingly big ticket items.
We can see the market structure clearly when we examine CIPA shipment data for interchangeable lenses cameras (ILC), and lenses. What this shows is that ILC shipments peaked in 2012 by units and value. While the number of ILCs shipped continues to decline, the value of these shipments has increased as the per-unit cost of each unit has gone up. This is due to fewer lower-priced products and the choice to focus on the top end of the market. On top of this, it’s interesting to note that the relative value of lenses to ILC shipments has remained remarkably consistent, hovering around 43%.
This last point is a crucial aspect of today’s market. Manufacturers can make a significant profit and income from first-party lenses. They are often expensive.
In fact, Nikon wants a camera-lens sales ratio of 1:2 (the “lens attach rate”) simply because lenses earn almost as much as cameras. Its target of a lens range of 50 will take time to achieve as the turnover of lens designs is much slower than that of cameras meaning that R&D invested now will have a much longer term (and potentially better) return than cameras. To get an idea, just look at how much your D800 is worth compared to a similar era 70-200mm f/2.8.
What the chart above is slightly misleading about is the volume of the lens market — it’s actually bigger. While camera shipments are broadly accurate, what this means is that the ratio of lens to camera sales is higher. Unlike camera manufacturers who are almost exclusively Japanese, those reporting lens shipments include Canon, Nikon, Sony, Olympus, Tokina, Tamron, Sigma, Panasonic, Cosina, Fuji, Ricoh, and Zeiss. Manufacturers from China and South Korea are excluded, which include Viltrox and Samyang, with suggestions that they may make up about 20% of sales currently.
It’s About the System
To misquote Bill Clinton, it’s about the system. The system attracts consumers by dint of lens availability and long-term support. Giving your system breadth is important as it attracts those camera sales and follow-on lens sales. This also helps to establish a relationship with your customer over the long term. However, filling out a lens system is time-consuming and expensive, something that is painfully apparent watching Nikon and Canon expand their offerings since they entered the full-frame mirrorless market in 2018.
There are three ways to build a camera system. We are currently using all three. The first has been adopted by both Fujifilm and Sony who tested the mirrorless waters and have slowly built out a range of amateur and professional lenses to offer an enviable breadth that covers a wide range of bases. The result has been a strong following from photographers who have returned to purchase more lenses. These systems have also been a success for third-party manufactures.
The second option — a variant on the above — is to rapidly build out a range; this is something that Canon, in particular, has been trying to achieve. It is riskier, and therefore more costly. You need to spend the money upfront on research and development before you can guarantee the system’s success or generate significant income. In Canon’s case, this isn’t really a problem as it has been able to transfer its DSLR market dominance into the mirrorless realm.
The third option is to form a consortium of manufacturers around a lens mount to produce both cameras and lenses that are all mutually supportive and — broadly — don’t compete with one another. Leica has attempted this in the L-Mount Alliance, which originally included Sigma, Panasonic, and Leica. DJI joined later. They have all produced full frame cameras of very different styles that can be used alongside Sigma and Leica’s complementary lens ranges. The significant advantage of this is that it fills out quickly the lens and camera ranges, provided no one member wants to dominate the system. On face value, the L-Mount Alliance seems to have found a good balance.
The final option is to bring third-party manufacturers on board relatively early to expand the lens offerings in order to rapidly fill out and accessorize a system at the expense of ownership.
In a sense, this is what we’ve seen with Sony and Fujifilm. While PetaPixel has confirmed that Fujifilm has licensed its mount, Sony did several years ago which has resulted in a glut of first and third party optics options. Given that the X-mount and E-mount both have APS-C variants, third-party manufacturers have achieved market scale, at minimal cost, in a way an own brand wouldn’t be able to achieve. Full-frame lenses had more limited appeal when only Sony was in the mirrorless market, but with the newer Nikon Z-mount and Canon RF-mount, the time is ripe to offer a range of lenses.
Some recent developments in the lens market have highlighted the differences we are seeing above. Firstly, there has been a switch from low-cost brands moving from manual to auto-focus lenses. This requires a much greater degree of development, but the scope of the market clearly makes this worthwhile.
Secondly, we are now seeing top-end third-party manufacturers — particularly Sigma and Tamron — expanding their mirrorless mount offerings. This is most notable with the recent announcement by Tamron of the first third-party zoom lens available for the Z-mount which we were able to verify is licensed from Nikon. This is important for Nikon, at a time when its market share is low, as it increases the visibility and viability of the system, while for Tamron it potentially expands an exclusive offering. It is also similar to the approach Nikon has taken with its strobe system.
Thirdly, Canon recently confirmed it ordered Viltrox to cease producing autofocus RF lenses on the basis of patent infringement. Canon may have infringed Canon’s intellectual property by reverse engineering the lens communication, not the physical mount. It is possible that Canon may use its market power to defend both the RF systems and sales they represent. It’s not a good look, regardless of the circumstances.
It’s also possible that we are seeing the seeds of Nikon adopting the opposite strategy and trying to broaden the diversity and appeal of the Z-mount. If — as PetaPixel has reported — Nikon is repositioning its Imaging Division to take a backseat in the business, then this may well be a pragmatic approach to maintain the long-term survival of camera manufacturing.
Consumers are, in general, spoiled by the lens offerings from own-brand manufacturers, however, there has long been demand and a market for third-party manufacturers. This is particularly the case for common focal lengths, of good quality, at competitive prices. We are witnessing the revival of lens options in a competitive market due to the continued development of mirrorless systems.
Only time will tell which approach is ultimately the most successful, but ask yourself this question: if you weren’t not allowed by purchase third party lenses, would you buy-in to that camera system?
Image credits: Header photo licensed via Depositphotos.