Nikon Enters the Compact Interchangeable Lens Camera Market (Finally)

Ed Lee
Sep 23, 2011

Last fall, just before the Photokina trade show in Cologne, Germany, it was rumored that Nikon would announce what some thought would be its entrance into the compact interchangeable lens camera (CILC) market. But, Photokina came and went without an announcement. Now, exactly one year later, the rumors that grew in intensity over the last few months have become a reality.

On September 21, Nikon announced its entry into the compact interchangeable lens camera market, the Nikon 1 System. There are two models in the family, the J1 and V1. The cameras incorporate a new 10.1 megapixel CX-format CMOS image sensor and Expeed 3 image processing chip. Fast continuous shooting (10 fps) and 1080i video capture at 60 fps are just two of the highlights of the new cameras. In addition, Nikon is introducing a new line up of VR-enabled lenses specifically designed for these cameras.

At $649, the J1 is targeted more at a general consumer looking to step up to an interchangeable lens camera from a compact point and shoot camera. The V1 is for photo enthusiasts who are looking for more features like a built-in electronic viewfinder, a magnesium alloy body, stereo microphones, and a breadth of attachable options and who can afford the $899 price. The products will be available October 20th, just in time for this year’s holiday season.

The new Nikon J1 Line Up

Nikon’s entry into the CILC market is significant. Until now, CILC vendors have included Olympus, Panasonic, Sony, Samsung, and Pentax and overall sales were few. Missing from the mix were market leaders Nikon and Canon, who combined have over 80% market share of the DSLR market. We have said before that for this market to really develop in the U.S., Nikon, Canon, or both would need to enter and throw their marketing dollars behind creating awareness for the product category. Nikon appears to be committed for the long-term to this market, as they have a dedicated team of engineers in Japan for the CILC product line (separate from the DSLR engineers), and have already shown a wide range of potential features that may become available in this lineup as it grows.

A market challenge for CILCs is product positioning. Should the new entries be positioned as complimentary to point and shoot and DSLR cameras or as competitors to a DSLR? Nikon has chosen the complimentary route. Listening to Nikon’s message and looking at its website shows the Nikon 1 cameras as a new family of cameras. Nikon’s challenge will be convincing consumers that the 1 system offers the right combination of features and price to hold this market position. The CX-image sensor supports this position, as its dimensions are about 4X larger than a point and shoot camera sensor but less than half the size of an APS-C sensor used in Nikon’s DSLRs. The price points, however, do not clearly differentiate them from DSLRs. At $649 and $899, these cameras will be considered along with DSLRs and the crop of other compact interchangeable lens cameras and will fight for the same share of consumers’ wallets.

Nikon would be well serviced to target its current customers initially. Getting a Nikon DSLR owner to buy a backup camera or a Nikon compact camera owner to upgrade to the 1 system should be easier than convincing someone to buy these cameras over a DSLR or another brand of CILC. Nikon says it will offer an adaptor for the F-mount lenses, which will allow current Nikon DSLR owners to use their existing lenses on the 1 system cameras.

Compact interchangeable lens cameras have caught consumers’ attention in Japan, but not so in the U.S. or Europe. The entrance of Nikon into this market could finally cause sales of CILCs to increase rapidly in the coming year.


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