Nikon's Dilemma

I'm not sure why it's still a dilemma, as the solution is relatively straightforward, but Nikon has managed to get themselves into a bit of a Z dilemma. The pandemic and supply constraints aren't helping any, either. 

First things first: the Z6 II and Z7 II continue to be popular cameras that sell reasonably well. To the point where they both tend to go in and out of stock here in the US. But these aren't pulling in huge volumes for Nikon. They've just hit serial number 8000 here in the US for the Z7 II, which would imply that the overall volume has passed 25k for the model (the Z6 II is doing far better). Likewise, the older Z6 and Z7 models continue to sell decently, too, and they count for the bulk of Z unit volume so far. 

The Z50 is selling decently, but not well enough to consistently show up in best-seller lists anywhere. Nor is the Z50 outselling the D3500 as far as I can tell, despite that DSLR camera being on its last, exhausted legs. The Z5, despite it's entry-level price, seems to not be doing as well as any of us would expect. Like the Z50, it seems that the other, higher-end models are drawing more interest. (I use higher-end advisedly. Technically, the Z6 II and Z7 II are middle category prosumer models. A Z8 and Z9 would be a true high-end.)

Lenses seem to do better. Nikon's target was selling about 2 lenses per Z body, and they've been consistently near that target (the industry overall tends to be 1.6x to 1.7x lenses per body, with the bulk of those low cost kit lenses). Nikon initially couldn't keep Z lenses in stock (doing much better now, though the macro lenses are going to be sold out for some time). (Note that "doing much better now" is partly a result of not selling enough cameras to suck up all the lens supply, though.)

So, Nikon has had clear success in the Z6/Z7 range and in lenses for same, less clear success outside that range. 

The dilemma is this: Nikon needs a strong feeder system. Specifically, two parts of the feeder system aren't currently working as well as they should/could be:

  • Low end Z's — The Z50 is the low end, and as good as it is, it seems neglected by Nikon for the most part (hard to even find batteries). Two lenses don't make a system (buzz, buzz again). Small touches weren't quite right (tilting LCD instead of articulating, no permanent powering system, etc.). And the marketing has been lackluster. Personally, I love the Z50 as a small carry-always camera, but I keep encountering people who find one small detail enough not to their liking that they either don't buy it in the first place, or trade it in quickly. Meanwhile, the Z5 should be a clear winner in low-end full frame: a highly competent full frame entry level at US$1000. Indeed, the Z5 is the best US$1000 full frame camera to date from anyone, DSLR or mirrorless. Yet it's not a hot selling camera. Again small things hold it back (compact lens availability, small touches not quite right, and lackluster marketing). Moreover, the Z50 isn't low enough—Nikon really needs a US$600 entry—and in both DX and FX cases it's one camera against the world. The buy-low-upgrade-high feeder system is currently not running in the Z realm.
  • DSLR crossover — The Z6/Z6 II have got the interest of the enthusiast that was in the D500/D750/D780 pricing realm. That's been Nikon's most successful transition point. The Z7/Z7 II do a little less well against the D800/D810/D850 user base. And, of course, there's nothing for the D5/D6 user yet. But the big sin here was the lack of any way to fully use a screwdrive autofocus lens (D-type that wasn't AF-S). The second biggest sin was not bringing over all the features/performance of the D850. As I've pointed out before, the Nikon full frame lineup from bottom to top goes D600, Z5, Z6 II, D780, Z7 II, D850, D6. Nikon's simply positioned the Z's slightly lower than the DSLRs in the same class. 

So what's the solution? In no particular order:

  • FTZS adapter — (FTZS is my shorthand way of referring to an FTZ adapter that also supports screw-drive autofocus lenses.) To me this is more a marketing check box than a useful tool, but to too many of you it's a necessary addition before committing to Nikon mirrorless. Moreover, Sony has such an adapter for their old A-mount lenses, so there's the perception that Nikon simply isn't keeping up. The bean counters in Tokyo won't like this, as an FTZS doesn't look like a money winner on paper, but the problem is that Nikon has really shot themselves in the foot with their inability to pay enough attention to accessories. These are systems cameras, and Nikon's penny pinching has squeezed all the system out of them. Heck, even where Nikon has accessories you might want, they often aren't in stock if you actually wanted one. No accessories (and not enough lenses, see next) means people don't pay enough attention to the Z system. Marketing isn't just about what you write or video about a product, it's also about the broader system and how it's perceived. And let's not talk about flash ;~).
  • The lens parade seems slow — Six lenses in 2020 was not enough, pandemic or no pandemic. Particularly given that two were convenience lenses (24-50mm kit, 24-200mm kit). And eight months between announcements is an awful lot of silence that doesn't bolster confidence. The pace must be at least 8 lenses a year, and I'd argue it needs to be 10 lenses a year for a couple of years to truly show off that Nikon is all-in and fully engaged in mirrorless. Nikon has a lot of missing pieces in lenses, though what we've been given is a really good set of useful lenses. We just need more, and faster.
  • The high end needs to be higher still — Ironically, Nikon needs to pay way more attention to the highest end of mirrorless, where there isn't a lot of volume, but which produces a lot of bragging rights. The Z9 basically has to match the Sony A1 and the upcoming Canon R3, and it probably needs to clearly exceed them in some way as well as exceeding the Nikon D6. But doing so leaves a huge gap between the Z7 II and Z9 that also needs to be filled (e.g. Z8). Clearly, Canon and Sony will be full-line mirrorless providers, though Canon, like Nikon, has a lot of catching up to do. Nikon needs to match that.
  • DX needs a REAL strategy now — It was easy for Nikon to convince themselves that, once they started making a full line of FX DSLRs and promoting them a decade ago, that they could just start to de-emphasize DX DSLRs and lenses. I'm going to continue to be on record that this was the wrong strategy then. Moreover, you can now see why it was the wrong strategy. You still need crop sensor cameras today. Three FX mirrorless cameras (Z5, Z6 II, and Z7 II) with one DX mirrorless camera (Z50 and two lenses) shows that DX doesn't currently have a strategy, at all. DX is currently not a product line, and it's 100% unclear that it will ever be, so why does it even exist? (Hint: it's a placeholder until Nikon figures out what the strategy should be.) Nikon's rumored retro Z50—a Z50 II in Df skin—isn't a strategy, it's a random twist. It would have the same fate as the original Df did, and it would do nothing to make Nikon's DX strategy more clear. The lack of a clear DX DSLR strategy has led directly to having no clear DX mirrorless strategy. Total product management failure in my book.

I fear that Nikon is essentially restricting their potential by having too narrow a strategy. Z5, Z6 II, Z7 II, Z8, and Z9 with supporting lenses is indeed a full FX product line that would sell at some reasonable, but likely third-place level. Z50 and Zfc don't add much to that and put Nikon in a tougher place long term as they're not building enough new lower-end users to sell upgrades to, which puts even more strain on Nikon's marketing to sell FX Z cameras against a company that gets marketing more right than them (Sony; and arguably Canon eventually). Even Canon's destined-to-fail EOS M strategy is better than Nikon's current Z DX strategy. Yikes!

You'll note that my strategy for Nikon hasn't changed (because I believe it was right in the first place when I first wrote it):

  • Z DX — Z30, Z50 II, Z90. (1) Total entry (price conscious beginners), (2) solid consumer (well rounded middle), and (3) a speed/high-end (for those looking for small, light performance in sports/nature/birding/event) cameras. Heck, you could probably add a "totally vlogger" camera in there, too. Give the Z90 a new, higher density image sensor (and roll that to the Z50 III eventually). Support Z DX with a solid wide angle zoom, a mid-range fast zoom, a few wide to normal primes, and get more telephoto options on the market stat (full frame lenses are okay for the latter). We can talk about more Z DX lenses later, but the ones I've just identified are absolutely necessary. Z DX has to look like a well-thought out product line, not like a couple of random products. 
  • Z FX — Z5 II, Z6 III, Z7 III, Z8, and Z9. Nikon needs to keep pushing this camera lineup upward, so as to give Z DX a bit of breathing room underneath as well as to keep tempting the FX DSLR users to transition to mirrorless. We need an increase in Z lens urgency, though, and more creativity in the next round of lenses that get added to the Road Map. 
  • Accessorize — FTZS is a necessity. Flash units need upgrading. Accessories need to stay in stock. WR needs to be built into the Z8/Z9. Buy a company or two such as MIOPS and do accessories modern and right. 
  • Z Video — If Nikon wants to compete successfully long-term, they need Z-mount video cameras and lenses. This is a giant flaw in their current lineup compared to Canon/Sony. Unfortunately, it appears that Panasonic is going to go "all video" and Nikon is going to go "all stills" (though both brands' products can crossover; what I just stated will be their primary focus when designing new cameras). This is not a long-term #1 or #2 market share strategy, it's a niche #3 or #4 market share strategy. My advice? Join with a non-still video maker, such as JVC, to make Z video a reality. 

Starting a little over a year ago we had Nikon executives giving interviews where they said that they needed to iterate and release quicker. The issue holding them back in March 2020 was the pandemic and its restrictions. Since then, Nikon has actually slowed down. Perhaps the pandemic-related issues were bigger and more ongoing than they anticipated, but that doesn't appear to have impacted other companies as severely as Nikon. So the question lingers: what's causing Nikon's slow roll with Z products? Will we see a surge when they figure things out and get the logistics working efficiently? 

I'm betting no (on a sudden surge). Nikon is more methodical and plodding than even they believe. As far as I can tell decision-making and approval processes at the company have not changed, which means that everything requires top-down review before getting out the door. 

Thus, the "knowns" are what we should mostly expect in the remainder of this Nikon fiscal year (ends start of April, 2022). The knowns are: (1) the nine unshipped lenses in the road map; and (2) the Z9. The "almost knowns" are few: (1) another DX body and lens; and (2) an unspecified "charm" lens. The "everyone expects" list is also quite small: (1) firmware updates.

That leaves the "everyone still wants" list: (1) Z90 to replace D500; (2) Z8 to bring small, high-end body back; (3) many missing lenses; (4) FTZS adapter; (5) new PFs for Z-mount; (6) complete f/1.2 prime line; and (7) exotic zooms for the Z9 (e.g. 120-300mm, 180-400mm type lenses). 

Add it up: between all the lists that's four bodies, 16+ lenses, firmware improvements, and a critical missing accessory. Summary: Nikon still has a lot to accomplish, and most of us are wanting that sooner rather than later.

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