In the current issue of the German FotoMagazin you will find a listing of tops and flops in 2011. The list is very predictable, but one comment does shine: Flop: “Canon is the only manufacturer without a mirror-less system. Here a trend is overlooked or neglected.”
Such a comment is almost identical to the ones that were said about Leica when that company was not jumping on the digital band-wagon when the digital wave was riding high. Perhaps such statements are living proof why magazine journalists are hardly ever promoted to the strategic decision departments of photographic companies. In fact the situation at Leica was more complicated than most observers assumed.
In the case of Canon it is hardly conceivable that the Canon board does not know that close to 40% of all cameras sold in Japan in 2011 are of the mirror-less type. And the steady increase in market share of this camera-model is known for years and you may be dead certain that Canon does have this knowledge. I presume they have even much more facts that they do not share with journalists.
There are three easily identifiable trends in the imaging world. I hesitate to say ‘photographic’ world because in my view photography is a much more restricted domain compared to the current imaging world.
The main trend is a shift to a merging of cinematography with still photography. Two arguments: the ubiquitous use of short movies in the YouTube domain and the fact that shooting at 15 images per second does ensure that at least one is fine. With every aspect of the process of capturing a scene is now automated, only one element is not yet under automatic control. That is the precise moment of pressing the shutter. Cartier-Bresson referred to this element as the decisive moment and portrait photographers spend hours to capture the desired expression of a sitter. Now you shoot 15 pictures in a row and the software will select the best one for you. Yet another skill in the photographer’s toolbox is gone.
The second trend is to provide ever more features in a camera, in particular more pixels on the sensor area. Rumors have it that the next generation of high end cameras will have more than 40 Million pixels on the area of the classical 135-negative size. Anyone with a calculator can conclude that this does not work. More effective pixels require a bigger sized sensor. Leica knows this and produced the S2 and Hasselblad knew it it in analogue days and shows its knowledge again in the digital domain.
The third trend is user influence: with zillions of images being distributed on the internet content is no longer important but presentation is. In-camera software filters are the method to implement because post-processing is becoming a thing of the past, just like the classical chemical darkroom.
Modern digital imaging equipment is now far removed from the technique of the film-loading cameras of the previous century. The modern digital camera is in fact a mobile DSP (digital signal processing) engine in a classical body shape. The EOS shape may be the same from the earliest EOS 650 and the Nikon D3 shape may be almost identical to the classical F6 model, but internally the differences cannot be greater. The current popularity of the mirror-less versions of the DSP-engines might be that their shape does not refer to classical camera models, but offer a new compact shape that fits the modern age in which image taking is constant and ubiquitous and almost free of charge and where image distribution is accomplished exclusively through wireless internet and social media, again almost free of charge and most importantly effortless.

Canon’s approach to the trends in imaging.
The new Canon EOS 1Dx is supposed to be the new high-end king replacing the current 1D and 1Ds models. The pixel amount is rather modest and Canon evidently has put its priorities elsewhere. The new flagship integrates cinematography-capabilities, extremely high-sensitivity and superior autofocus abilities. Canon rightly assumes that static studio photography and larger-than-poster-size prints are a shrinking market and that dynamic high-speed, high-sensitivity, high-quality imagery with a fleeting, cinematographic representation will shape the future.
Canon seems to be leaving the realm of the studio where PhaseOne, Pentax, Hasselblad and Leica et all battle fiercely for a slice in an ever shrinking market segment. The Canon engineers seem to assume that a 40+ Mp sensor with 24x36mm dimensions, while technically feasible, will not add enough value to a new model to be worthwhile to pursuit. The advantage in image quality compared to a 20 Mp model is relatively small and the disadvantages are big: hardly an existing lens will be able to cope with the demands of the extremely small pixel size and computer power has to shifted from image taking to image processing.
In addition it may be said that the current dSLR range of Canon cameras is hugely profitable and sells very well. The need for a mirror-less camera is not that urgent. Nikon obviously thinks differently, but it might be the case that Nikon is feeling the heat of the mirror-less competition more severely than Canon does. My guess is that Canon will hold their cards to the chest and will surprise the world at Photokina 2012. That the classical style of photography is no longer a desirable goal for the Canon designers is crystal clear to me.

Leica’s view
While the Japanese manufacturers are not very generous in sharing their future roadmaps and sparingly lift a corner of the veil, the Leica owners are more eager to share their views.
In a recent interview the owner of the Leica Company, Mr Kaufmann gave his vision of the future of Leica in the Frankfurter Allgemeine Zeitung of November 8, 2011. Over five years the biggest market for Leica should be China and the global overall market share should increase from 0.15% (2011) to 0.3% in two years and 1% in ten years. In the financial report 2010/2011 the global market for cameras assessed as 141 Million units, all camera types included. The current market share of 0.15% would amount to 211.500 units that Leica has been shipping. Close reading of the reports over the years bring figures that comply with this figure. I wish not to be too precise here and for the sake of argument I would settle for 200.000 units, roughly divided in two segments: the majority being Panasonic models and the rest of the units does comprise the high-end models X1, S2 and M9. In two years the stated goal is to produce more than 400.000 units. And when the ten-year goal is calculated a staggering 1.200.000 to 1.500.000 units is envisaged. Mr. Kaufmann denies that such a number would imply that Leica is set on course to become a mass manufacturer. (the Pentax company had a world wide share of 1.5% in 2010 or ten times larger than Leica in 2010). The total sales of Leica in year 2010/2011 is (rounded) Euro 250 Million with a market share of 0.15%. A market share of 1% is a six-fold increase and should catapult Leica into the over 1 billion (thousand million) category. Mr. Kaufmann declared that this goal is possible by expansion of the current product portfolio in regional markets and by introducing new products, referred to as “mechanically constructed objects manufactured by Leica” and “ products related to the camera domain” and “products incorporating he inherent value of the Leica Marque”. These references are intentionally rather vague, but one can at least infer one conclusion: the prominent status of the M-range will decrease, absolutely and relatively, in the total Leica product portfolio. If we keep all things equal and assume a six-fold increase in units, then the production of M-cameras in whatever shape it would be in 2020, would amount to 120.000 to 150.000 units per year. The Fujifilm X100 is reported to reach the 100.000 mark in 2011, therefore it is not implausible, but then the price should be lowered significantly. Again with such an increase in production numbers and assuming an up-to-date and flexible manufacturing technology, now being implemented at the Leitz Park, it is not impossible, and I would love to see the 70th Anniversary of the M-system in 2024 (original M3 camera introduced in 1954).
Leica has been disseminating very positive comments about the future of the company, in line with the future-oriented view as expressed by Mr. Kaufmann.
Still there are a few cautionary remarks to make about the company results.
The financial report 2010/1011 (April 1, 2010 to March 31, 2011) notes that the sales (Euro 249 Million) increased by 57% compared to 2009/2010: sales in that period were Euro 158 Million, an increase of 18% compared to 2008/2009. The fiscal year 2009/2010 saw the introduction of the M9, X1 and S2 and the year 2008/2009 was at a low point with sales of the M8 dropping in anticipation of the introduction of the M9. The positive reception of the M9 could not be fully materialized in the year 2009/2010 and statistics might be deceptive: when the base line is low, a big increase might be not durable.
The figures for the systems camera segment are as follows: 2008/2009: Euro 42 Million (change on previous year: -27%); 2009/2010: Euro 71 Million (+70%); 2010/2011: Euro 115 Million (+62%). For the first half of 2011/2012 (April 1, 2011 to September 30, 2011) the figures for the system camera segment are not published, only the total photo segment, including compact cameras, but growth has been reduced to 32% compared to the same period in the previous fiscal year. Indeed total turnover increased by 18% in 2009/2010, 57% in 2010/2011 and is now 31% for first half of 2011/2012. For the total fiscal year 2011/2012 the company calculates an increase of 10% compared to the previous fiscal year.
Intriguing is the statement that the operating profit for the photo segment in first half of 2011/2012 increased by 187% to Euro 27 Million compared to Euro 9 Million in the same period of previous year. More figures are needed to explain this somewhat curious result.
Overall one can see that the growth spurt in 2010/2011 may be partly the result of low figures in the previous years and one can see also that the growth figures are decreasing, indicating a possible mismatch between supply and demand and a coming market saturation, presumably one of the reasons why Leica is focusing more on new markets and asked the assistance and financial power of Blackstone.