Thom Hogan

Nikon today announced the ZR camera just prior to IBC, the big European broadcasting trade show. 

To understand the ZR you have to first understand that Nikon had two elephants at different ends of a room: the DSLR-replacement Z models, and the RED-designed video models. Those are very distinctly different elephants, though, almost different species. Nikon needed a way to begin to bridge between them. 

The other problem is that Canon and Sony, especially, have been actively bridging their elephants. Sony’s FX line started at true Hollywood level, and has now bridged right down to the C-type Alphas in the mirrorless still camera lineup. Yesterday, Canon announced their C50, which also puts Canon’s Cinema line much closer to their mirrorless models.

To create the ZR, Nikon basically fused parts of its two elephants: the ZR is mostly Z6III electronics, with some RED-infused logic and design and a couple of new things. Losses from the Z6III side include no built-in EVF, a different card slot set (CFexpress/microSD), and a really trimmed down body (in all dimensions; it’s quite small). Gains from the RED side include a high resolution 4” articulating Rear LCD that is 1000 nits bright and DCI-P3 compatible, more use of RED IP (3D LUTs built in) in the setting choices and monitoring options (including 12-bit RED raw),  32-bit floating audio, and more. One of the “more’s” is a new hot shoe with additional electrical contacts.

The result is a soap bar style camera—no forward extending hand grip—that’s physically smaller than the Z6III body, and with a more video-centric UX. Buttons are labeled the “video way” with numbers (and stenciled defaults), a rocker switch for power zoom, and much more. Yes, you can still take still images with it, but the primary interface is tilted to video (e.g. the opposite of the previous Nikon Z models). Oh, and the MENU button is now a mobile style hamburger icon.

As a reminder, the RED elephant the ZR bridges to is the RED Komodo-X. The Komodo-X is a Super35 (near DX) global shutter, while the ZR is a full frame partially stacked shutter. While both top out at 6K video, the Komodo-X does that at a Hollywood DCI (17:9) aspect ratio, while the ZR does so at consumer 16:9. 

Price for body only is US$2200.

Last week I pointed out Nikon’s successful growth in mirrorless since introduction. But hidden in those numbers are a potential problem. Let’s first recap what those (rounded) numbers were:

• 2018 — 190,000 units
• 2019 — 320,000, gain of 130,000
• 2020 — 222,914 (pandemic year)
• 2021 — 290,000 (supply chain issues out of the pandemic)
• 2022 — 530,000, gain of 240,000
• 2023 — 630,000, gain of 100,000
• 2024 — 760,000, gain of 130,000

Those “gain of” numbers in that list are Nikon’s new problem: exactly what can they do to sell an additional 100,000+ units in 2025 (and again in 2026, 2027, et.al.)? From early results, it looks like 2025 should be close to another six figure unit gain, though the tariff situation in the US is eroding that potential now. The two pieces generating the 2025 gain will probably be the Z5II launch, another late year launch, plus firmware updates making cameras better and more desirable. 

Nikon’s not likely to keep the firmware furnace fired up in 2026, as that should be a new technology launch year for them. So the question is whether or not a Z9II launch vehicle could generate the six-figure gain they desire by itself, or what needs to be launched with or after it in 2026 to meet their expectations? 

Prior to the pandemic I was writing that the “bottom” of the ILC market was probably 6m units, but that it could end up as low as 4m. The actual “bottom” turned out to be 5.3m units. For the last five years the actual mirrorless units shipped out of Japan have been:

• 2.9m
• 3.1m
• 4.1m
• 4.8m
• 5.6m

However, the DSLR units have been plummeting during this same period (now less than 1m), meaning that the overall ILC growth from market bottom to the end of 2024 is about 25% across the last three years. Canon and Nikon have been basically giving up DSLR volume for mirrorless volume, which has made the mirrorless gains look great, but effectively, the combined ILC unit market volume isn’t changing all that much.

For the Z System to continue to grow faster than the mirrorless market, Nikon needs 100,000+ additional units a year, probably substantially more. That implies more cameras or a faster upgrade cycle. 

Nikon today announced a new version of the Zf camera, the Zf Silver. This is a “panda-style” where the top plate is a silver metallic texture and the bottom is the usual leatherette panels and black. List price is US$2200. In addition to a Zf Silver, you can now get the Zf in three new colors for US$2300. Those new colors are Cognac Brown, Teal Blue, and Mauve Pink. This is in addition to the already available Moss Green, Stone Gray, and Sepia Brown.

But wait, if you order today…

Nikon pre-announced a firmware update for the Zf, which will add three sizes and strengths of grain that can be added to Picture Controls (and yes, this works with videos that use Picture Controls). Apparently this is also going to be a function that can be added to Flexible Picture Controls, as well as regular ones.

With Nikkei’s annual release of unit volume numbers for various camera categories, it’s time to take a look at how Nikon fared in the first six years of the Z System. Without further ado:

This is percent of mirrorless camera shipments, again from Nikkei’s published numbers. I’ve annotated the chart to show the models introduced in each year in red (impact of sales of those models would tend to be mostly reflected in the following year results).

One common comment I hear a lot is that Fujifilm is stealing Nikon’s thunder. Consider Fujifilm’s market share volume for mirrorless, though (Nikon is again blue, while Fujifilm is the green line in this chart):

Quite a bit of Fujifilm’s recent “growth” on their digital side was actually the X100VI, not their mirrorless cameras. Fujifilm has a higher market share than Nikon in overall cameras, but lower in mirrorless.

Okay, so at this point you probably want to see “all players.” Here’s that chart:

The results in 2024, by the way, are about where we were most of the time in the DSLR market, with the one change being that Sony and Nikon have reversed positions. Canon and Sony in 2024 had 70.5% of the shipments. Canikony, my name for the triopoly, had 85.1%. Given that we’ve had this kind of duo/trio dominance dating well back into the film SLR market, one would have to conclude that the interchangeable lens camera market seems to always devolve to no more than a triopoly, a classic Trout & Ries point about how most markets behave.

Bottom line is that Nikon has reasonably successfully pulled off their DSLR to mirrorless transition, though the delay in doing so probably cost them a place in the market share race. The challenge for Nikon now falls on the post-Z9 generation cameras, which will need another market changing innovation to fully solidify their triopoly position. 

Of course, there are other things Nikon could do that could boost their overall camera market growth (as opposed to mirrorless only). In particular, two come to mind: (a) a DX or FX compact; and (b) a camera that helps them bridge the gap between the current Z System and the current RED system. My suspicion is that they’ll do all three: another innovation cycle, a compact based on the Z9 cycle, and a video camera that has RED DNA in it to bridge from mirrorless to pro video. The only real outstanding question is when.