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Canon, Nikon and the lure of the camera system

Marketing, Photography / No Comment / March 5, 2012

Full-frame cameras

With the launch of the 5D Mark III, Canon have responded to Nikon’s new DSLR for professionals, the D800. Canon has chosen not to continue the megapixel arms race – Nikon’s model now boasts a 36Mp sensor – but instead to improve on features on the 5D Mark II, such as auto-focus and noise-handling. It will be interesting to see how the rival offerings fare in the market.

The full-frame digital camera market segment into which these two models have been launched is an effective Canon/Nikon duopoly. They nevertheless compete ferociously, echoing other rivalries between, say, Pepsi and Coke in soft drinks, and Apple and Google in smartphone operating systems.

What sets Canon and Nikon apart, however, is their sustainable competitive andvantage arising from extending of the camera product proposition. If you buy an iPhone, you might go on buy an iPad or a MacBook –  but this will be largely to express a brand and lifestyle choice: owning one does not mean you need to buy the rest. When you buy a camera body, however, you are buying into a system – and an expensive one at that.

Unless you only ever shoot portrait photography, say, you will need to acquire perhaps three or more lenses for different purposes. Whilst their camera bodies tend to attract most of the interest – they boast all the bells and whistles that encourage upgrading – it is on lenses and other peripherals that they can earn wider profit margins.

Given that Canon and Nikon lenses are proprietary, customers get locked into their ‘systems’: having bought lense for one brand, the switching cost, both economic and psychological, is prohibitive. Not only would it be very expensive to trade in all of your kit from one brand to start again from scratch with ‘the opposition’ but, in doing so, you must admit to yourself and perhaps your peers that you were wrong in your previous brand preference.

This is all the more difficult psychologically owing to the brand reinforcement effect of the Internet. Fans gathered on the unoffical and websites months before the D800 and 5D Mark III were announced, anxious for news and, in the meantime, mutual encouragement in their brand loyalty via the sites’ discussion forums. Canon and Nikon do not appear to grant the owners of these sites any particular favours but might do well to involve them in prototyping and early adopter programmes, bearing in mind the following that they and their sites now enjoy.

As to the 5D Mark III, with a recommended retail price of £2,999, I think it’s over-priced, although like everybody else I await the magazine reviews. For half the price, you can now buy the Mark II, which probably offers 80-90% of the features and image quality. For Nikon users, the D800 body seems to be much reasonably priced at £2,400, with its predecessor, the D700 still being available for less than £1,800.

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