Challenges to the camera industry, Review and thoughts about the future 1 January 2026

 

All photos made in 2019 with Canon Powershot G5X.2 hand held while walking 

Compact cameras with built-in lens are more suitable than interchangeable lens types for this kind of street and quick-shot documentary work 

For many years through the 20^th Century the industry rolled along happily making minor incremental improvements to the familiar theme of manual focus film cameras.

The first big challenge was autofocus. The first commercially successful interchangeable lens camera with autofocus was the Minolta A7000 of 1985. Sony bought Minolta, kept and improved on their AF technology then scrapped the Minolta brand.

Pentax was late to the AF party, lost market share and never recovered. They also got lost on the way to the MILC party which has left them still making DSLRs for their dwindling but apparently not yet extinct cohort of loyal buyers. I used Pentax SLR cameras in the 1970s and 1980s but switched to a Canon EOS 630 in 1989 for the autofocus.

This technology challenge is still playing out with some makers like Panasonic putting resources into multiple models of dubious relevance while persevering with DFD contrast detect AF when they really should have invested more in matching Sony’s high performance phase detect AF. Now they are paying the price with cameras which are still not able to match AF performance with Sony, Canon or Nikon.

The next big challenge was digital image capture which replaced film with a light sensitive electronic sensor module. Surprising as it might seem this challenge proved easier to navigate than some others . Single lens reflex (SLR) cameras could retain most of their architecture and autofocus function during the transition process. The SLR became the DSLR, and onwards marched the caravan of progress.

A much larger speed bump came in the form of the mirrorless interchangeable lens camera (MILC), a technology first seen in the Panasonic Lumix G1 of 2008, closely followed by the Olympus Pen E-P1 of 2009. These cameras introduced the then revolutionary Micro Four Thirds (MFT) camera system which produced cameras and lenses which were much more compact than the mainstream DSLRs of the time.

Unfortunately for Panasonic and Olympus their excellent new MFT adventure launched into the 2008 global financial crisis which did them no favours at all.

In addition their choice of the 21.5mm diagonal MFT system, which has a sensor with about a quarter the area of a standard 24x36mm full frame sensor, has not managed to attract enough buyers to become a mainstream format. Among the Mirrorless interchangeable lens formats the already popular APSC sensor size has continued to attract most buyers.

Technically the Leica Messsucher (M) series cameras have utilised a mirrorless interchangeable lens configuration since the M3 of 1954. But Leica M cameras have never been a mainstream consumer product and they have not used through-the -lens viewing until the recently announced M-EV1. 

The MILC concept has such obvious advantages for compact packaging, reduced manufacturing cost and AF accuracy, that all the camera makers who were going to survive and prosper scrambled to develop their own version of this technology.

However it meant a total, clean sheet, re-design of the entire imaging, exposure metering, viewing and focussing system. This took several years and even now in 2025 Canon, Nikon and Pentax still sell DSLR cameras although in declining numbers.

In 1995 total world wide camera sales amounted to about 5 million units. Inexpensive, compact digital models  with built-in lens  boosted the popularity of cameras enormously. The apogee of sales came in 2010 when around 122 million units were sold worldwide, most of them being compact and bridge types with a built in zoom lens.  

Then came smartphones with one or more built-in camera modules and the compact digital camera was relegated to niche within a niche status. Total camera sales crashed from 122 million in 2010 to just 8 million in 2023 and about 8.8 million in 2024. Most of the loss was from cameras with built-in lens.  Interchangeable lens models remained fairly steady from 2020 at around 6.5 million units per year after an initial fall.

In 2024 about 1.23 billion smart phones were sold worldwide, making them the overwhelming favourite picture taking device for family, travel and snapshot use cases.

Nevertheless, most camera makers have survived by investing in technological advances to their interchangeable lens models and shifting from a high volume, low unit profit model to a low volume, high unit profit model. Chinese buyers have been especially instrumental in holding up sales of interchangeable lens cameras and lenses. In 2025, 31% of global interchangeable lens camera shipments went to China, compared to North America (27%) and Europe (21%).

In 2024 and 2025 an interesting counter current developed. Most camera makers have almost completely abandoned cameras with a built-in lens but some buyers have shown a return of interest in compact digital cameras. This interest appears to cover the full price range from Veblen goods like the Leica Q series through enthusiast models like the Fujifilm X100 series and the Ricoh GR series. There also appears to be a resurgence of interest in el cheapo models from China with various well known brand names like Kodak and Yashica. Some of these are junk cameras also known as scamras which make terrible pictures but apparently people buy them anyway. The miniature Kodak Charmera appears to be a runaway sales success.

Some pre-owned compacts with built-in lens and some very small MFT models are selling on the used market well above new prices.

Chris Niccolls of Petapixel announced, tongue-in-cheek, in June 2025 that the Panasonic lumix GM5, introduced in 2015 is the “Greatest digital camera ever made”. Of course it is not, but he is making a good point which is that camera makers have abandoned compact, high quality cameras like the GM5 and have failed to update more recent ones like the Pana-Lumix G100 and G100D when there is a cohort of photographers who would be very keen to buy something like this.

The page view count on this blog (Camera Ergonomics) has for most of its 15 year existence had posts about fixed lens compact and bridge cameras at the top of the list every day. The feedback which I receive indicates there is still plenty of interest in cameras of this type.

I think the next challenge is partly a consequence of the industry’s response to the smartphone onslaught. Camera makers have pushed many of their products so far upmarket that they greatly exceed the requirements of all but the most demanding professional sports and wildlife photographers and some dedicated amateurs who want to win major international awards.

Will substantial numbers of camera buyers continue to purchase expensive camera gear the capability of which exceeds their requirements ?

Maybe they will, in which case the camera industry will continue making and selling increasingly amazing gear which can fire off single images at 40 frames per second and 8K video, neither of which anybody actually needs.

But if a lot of consumers decide that much less expensive gear can easily meet their requirements, the camera industry could have another big challenge on its hands. Entry level cameras generate minimal profit per unit. If Canon buyers decide the  R10 is good enough for their purposes and the R5 and R6 line are surplus to requirements, then Canon will have to raise prices on entry level units and/or generate new market categories with opportunities for higher per unit profit margins.

Fujifilm appears to have managed this with their X100 series as has Ricoh with the GR series.

As they say, prediction is difficult, especially about the future, so I have to confess having no firm ideas as to  how the camera industry will tackle this latest challenge. But I am reasonably confident that they will have to do something or watch as their business model drifts away from their customer’s actual requirements.

One thing I would like to see is renewed interest in enthusiast level compact and bridge cameras with built-in lens. Proper, fully featured models ready for demanding assignments, not just also-rans playing second fiddle to interchangeable lens models.

I live in hope………….