Everyone is aware of the current financial disaster, and this is a great influence on the price of electronic goods, including the DSLR's have in the coming months. First, we are on the driving forces in the markets that prices will have an impact, then what we expected in terms of price and how to respond to manufacturers such as Nikon and Canon.
The current economic chaos, massively complex, the purpose of this article does not go into the intricaciesthe problem, but (we start with a very high level view of explanation, we are not even speak the 30,000 ft view here, we speak of the opinion) from space with a mediocre pair of binoculars.
The five leading economies in 2007, according to the IMF (International Monetary Fund) were:
United States ($ 13.8 billion)
Japan ($ 4.3 trillion)
Germany ($ 3.3 trillion)
China ($ 3.2 trillion)
United Kingdom (2.8 trillion dollars)
Of these, USA has had the dollar Japan yen,Germany is the euro zone is not publicly traded China has one currency, and the United Kingdom has the pound. Traditionally, the dollar is the first choice of foreign exchange reserves were (China currently has about 2 trillion U.S. dollars of capital, for example), followed by the yen - the bigger the economy behind the currency, and the more committed to free markets, the government behind the economy, feel more certain that currency is. However, with the introduction of the euro a few years ago, which is supportedby Germany, the 3rd largest economy), France, Italy and Spain (6., 7 and 8.) (where a number of other European countries managed centrally if the European Central Bank (ECB), the euro began to be taken seriously .
With the introduction of the euro, and strain on the U.S. economy over the past year or more, the euro is increasingly used as a reserve currency, which countries and organizations with large currency reserves to some diversification against dollarRisk, support a currency by some serious business. This flow of currency from the dollar to the euro is one of the main causes for the week of dollars in recent years.
The current crisis has launch in the U.S., but the problem has spread worldwide, and this is the first hard test for the euro have been. The fundamental problem with the euro is that, given the centuries of history, the European governments are almost always asked nationalist interests ahead of European interests. A few weeks ago, Irelandmoved to guarantee all bank deposits in its national banks. The ECB had already stated its policy against this criticism and Germany sharply on the road. But the move led to a massive movement of deposits from German and other European banks to Irish banks. Thus, Germany was in a very difficult situation, and in an effort to stop the flow of money from the system, went to the ECB and guaranteed bank deposits as Ireland.
This signals a fundamental weakness of theEuro, in particular, demonstrated the lack of control or even influence the ECB on its members. From the perspective of Germany, your country is in trouble and your constituents are in pain, what is more important - acting in the best interest of Europe (and as the largest economy in the euro, which will help to shore up with, the weaker countries in the euro - ask) or nationalist interests first and take care of your country and electoral base first - not a difficult decision for an electedPoliticians.
The net effect of making the euro less attractive to the cash reserves - the combination of the lack of control of the ECB and the actions of the nation makes the euro less predictable, so money flows from and into other currencies.
Where does the money go? Much of it goes to the dollar, the dollar was stronger against the euro. The U.S. may have started the current mess, but they are still the largest economy and a pro-active role of the state,expects the U.S. to restore the first, is still a reasonable bet. However, Japan's second largest economy, and despite the volatility in the equity markets, basically they are not as bad a shape as the U.S., so they also look like a safe haven. Proportionately more money flows into the yen, even more so the yen against the euro but also against the dollar. Where else will you keep your cash reserves to? Certainly not a small country like Iceland.
So, how isThis will impact on electronic goods? Nikon, Canon and Sony are all Japanese, a strong yen, ie, unless they can significantly reduce costs, will be their goods more expensive for importing countries, which means, ultimately, prices in these countries must be raised to the to maintain profitability. Some companies use currency futures to protect the value of the contracts for a specified period of time, basically paying a fee in exchange rate over a contract to lock, and thisprovide some short-term hedge against foreign exchange rates on existing contracts. But to protect the futures only against short-term volatility of exchange rates, ultimately, no new contracts will be in the new exchange rates.
It also means sales abroad when converted back to yen for their accounts, their gross sales figures are lower - converted with Nikon U.S. $ 10m in sales reports, for example, with a stronger yen, which means less turnover (in yen), ifYen and the Tokyo Stock Exchange.
The other issue we see is the reduction in demand - every new trend to feel, especially the American consumer. This means revenue declines, many people will either abstain, purchases, or buy a lower spec model. This is a big, negative pressure increases on prices, if so, you are a Japanese electronics manufacturer, you will see the cost of the export increase and reduce their demand to hit both the top and bottom lines. And what do you dodo?
The first thing you do is you, your costs and inventory under control. Increase is the last thing you want is to have to pay for the stock more inventory is not for sale, and have the production exceeds the demand that only your inventory.
Production lines are well known, expensive to start, stop - you have a huge ongoing fixed costs, etc.) only by the possession of the factory (mortgage, taxes, insurance, maintenance, whether it is used or not. Restriction of production, ie the dismissal of people, severance payPackages etc, then reboot the huge additional cost of hiring, training, and get a production line back up to speed. It's much better to shorten hour shifts, and keep as much stability in the production line as possible, rather than have the enormous cost to turn it off /.
The first thing you do is clear your current inventory, and that is exactly what we will see with the current rebates from Canon and Nikon. You are falling prices of goods already manufacturedaround 10%, to lift them out of the door so you can reduce your storage costs and a short-term increase in sales (if not) profits.
Then make your production - perhaps cutting a shift to reduce hours, reduce volume to protect shift from the top and bottom products in more affordable and higher margin products to sales and margins of the best you can. You know your prices around the world will be towards the top, and the demand is falling, you need to stay ahead of the curve, if youcan.
That means you must include in your competitive factor. There are currently DSLR bodies will be replaced very often - less than every two years. An obvious step would be to slow down their release cycle - maybe route, which set out on 3 years, but a major step to help you run bigger and more profitable production. You can not, however, if your competitors are not playing ball and going aggressively for market share gain, with the help of new technologies, even if they make losses. If youcan afford it and do not feel the competitor, can be purchased for a period of time to gain market share in a loss if things again so you will be in a much stronger market position. However, that is a very risky maneuver in uncertain times.
Looking at recent releases by the major DSLR manufacturers in the past year or so, Sony was very aggressive, with many options for DSLR s', and the new 24.6-megapixel A900. Canon has released the 15-megapixel50D, and the 21-megapixel 5D Mark II this year, a new sensor, and a greatly improved version of the sensor from the 1Ds Mark III. Nikon is not yet published a new sensor since D300/D3 a year ago, has seen this year, the D700 with the sensor of the D3 and the D90 with the D300 sensor, but nothing new. There are rumors of something "BIG" will be occurring, either a 20 + megapixel D3X or an MX medium format system, but that's an expensive, top model of the camera, which is not a hugeVolume Driver (Nikon D3 began production around 8000 posts per month, started the D300 at 60,000) per month. Thus potentially Nikon in a more difficult position than their main competitors Canon - they do slow their release cycle in order to reduce costs and the storm and runs the risk of market share to Canon newer, higher spec points in the middle range, or are you responding receive new posts in the coming months and risk profits / cash reserves or build market share?
What we know forsure there is no quick solution to the current economic problems. The yen is strengthening, and looks like it will continue to do so. This means that the current inventory has been postponed once and the current discount expires, the prices of electronic goods are up. By how much and for how long remains to be seen, but if you are a big electronics purchase in the next few months looked at by a Japanese manufacturer, which could now only be a good time. I may be wrong, no one can predict the future,but there are a lot of upward pressure on prices of Japanese goods will move into the year 2009 mainly due to the lower volume per goods such as lenses and bodies.
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