Are Japanese Business Laws Controlling the Nikon - Canon Digital Camera Race?

I remember reading about Japanese business laws, specifically those governing competition and competitive advantage. Apparently Japan has some type of system in place to protect all Japanese businesses so that competitors in a particular market, cameras for example, can't totally dominate the market at the expense of the other.

It has something to do with changes put in place at the end of World War II and is basically meant to protect Japanese business as a whole, the idea being that it's better for Japan for all Japanese business to prosper instead of some getting very successful and others failing.

It's been said that these Japanese business laws are why we see the up and down cycle of who's leading who in camera sales and camera performance between Canon and Nikon. At any given point in time, either Nikon or Canon is leading the other in terms of sales and camera performance. Sometimes Nikon has the lead, as it does currently, and sometimes Canon has the lead, but rarely are they neck and neck with each other.

You can further break this down into 4 categories, professional level DSLR digital cameras, prosumer level DSLR digital cameras, entry level DSLR digital cameras, and compact digital cameras. At any given time, either Nikon pro level DSLR cameras like the Nikon D3, D3x, D700, or the soon to be announced D700X, or Canon pro level DSLR cameras like the 1D MkIII, 1Ds MkIII, or the 5D MkII, will be in the lead. Currently, Nikon is holding the lead spot.

Previously, Canon held the lead spot with their Canon 1D MkII, 1Ds MkII, and the 5D. At that point in time the Nikon DSLR pro lineup, the Nikon D2X and D2H, weren't quite up to the Canon DSLR image quality, especially at high ISO, so most professional photographers were shooting with pro level Canon DSLR cameras.

Previous to the 1D MkII, 1Ds MkII, 5D, D2X, and D2H generation of DSLRs, Nikon was in the lead. The original DSLR bodies like the Nikon D1, D1X, and D1H were class leading cameras. Canon's original D30 didn't quite measure up to the original Nikon D1, plus Nikon beat Canon to market with the D1 by almost a year. The Nikon D1 was announced in June of 1999, and the Canon D30 was announced at PMA 2000. It wasn't until Canon came out with the Canon 1D and 1Ds that they started to overtake Nikon for the pro level DSLR lead.

The question is, was this leapfrogging of each other with successive releases of newer and better pro level DSLR cameras a natural progression of two competing Japanese camera companies, or was it a carefully controlled plan to ensure both Japanese companies received equal shares of the camera market, enabling them both to continue to grow and remain strong?

It's obviously better for Japan that both Nikon and Canon, two prominent Japanese companies remain strong and prosperous. The ironic thing is that it's better for us, the consumer, too! With two strong competing camera companies like Nikon and Canon, we the consumer get better pricing and better cameras, as each company must advance their offerings and price them competitively to stay in the race.

But then, if the Japanese business laws factor in, it's not really a free market, and how much more competitive pricing would we have seen if there were no Japanese business laws in play?

Consider the prosumer level DSLR camera market. Like the professional level DSLR market, either Canon or Nikon is usually in the lead at any given point in time. Now, with the prosumer DSLRs, this lead is often not as pronounced as it is with the professional level DSLRs, but it's still there.

Remember the Canon 10D and the Nikon D100? The Nikon D100 was out in 2002, and when the Canon 10D followed in 2003, most people agreed the 10D was the best camera out there. Phil Askey of Digital Photography Review concluded that "the EOS-10D (was) the absolute best in class, with the best image quality, lowest high sensitivity noise, superb build quality and excellent price (not to mention the huge choice of lenses)."

The Canon 20 and 30D that followed maintained Canon's dominance in the prosumer level DSLR market. The Nikon D70 and the D200 were great cameras, and while they held some advantages in quality of build and number of features, they lagged behind in absolute image quality when compared to the Canon 20D and 30D. It wasn't until the Nikon D300 that Nikon leapfrogged Canon and regained the dominant position in the prosumer DSLR market. The Nikon D300 blew away the Canon 40D and 50D in every area, giving Nikon the prosumer lead which it currently maintains (to be fair, the Nikon D300 isn't really a prosumer camera... it's a pro level DSLR).

But if there are Japanese business laws controlling competition between Japanese companies, how much of this prosumer DSLR race was fixed? Was the progression of the Canon 10D, 20D, 30D, 40D and 50D, and the Nikon D100, D70, D200, and the current leader, the Nikon D300, all decided behind closed doors in a Japanese boardroom?

The entry level DSLR digital camera market follows a similar progression. The original Canon Digital Rebel, the Canon EOS 300D, was the first of its kind. A DSLR for the masses, the original Digital Rebel was introduced in the Fall of 2003, and it shook the world. At $899 USD, owning a DSLR was suddenly a lot more attainable to the average photography enthusiast. The 300D offered fantastic image quality, and the price was certainly right.

There was no competition for the 300D until Nikon announced the Nikon D70 in January 2004. While the D70 was Nikon's entry level DSLR, it was also a camera that blurred the lines between entry level and prosumer DSLR. The 300D had better high ISO image quality, but the Nikon D70 beat the Digital Rebel in every other category. The D70 had more features, MUCH better build quality, and a better auto focus system.

Since the original Digital Rebel and the Nikon D70, both Canon and Nikon have released quite a few entry level DSLR digital cameras, each bringing new features and more advanced technology. Typically, Canon has relied on having better high ISO, and Nikon has relied on building a better camera.

The entry level DSLR race has been back and forth, with a closer gap between the leaders. Canon lead out of the gate with the 300D. Nikon gained and overtook with the D70. Canon came back hard with the Digital Rebel XT. Nikon came out with the D40, D40X, D50, D80, D5000, D3000, and D90 (although the D90 is probably more appropriate to put in the prosumer class). Canon released newer Rebels like the XTi, the XS, XSi, and the current T1i.

It's a little harder to see the Japanese business laws in play here. The race between Nikon and Canon in the entry level DSLR market has been much closer. Nikon fought especially hard with their D40, D40X, D50, and D60 entries, and pretty much dominated the entry level market with these DSLRs. Overall though, it's been a close race to follow, which has been great for consumers, as well as Japan.

And finally we come to the compact digital camera arena. There's been so many compact digital cameras from Nikon and Canon that I'm not even going to go into the successive models and who was in the lead when. Suffice to say that the compact digital camera market has been a good race too. Canon has actually lead this one overall. Nikon just hasn't had quite as good an offering in the compact digital camera market.

Canon has been very strong in the compact digital camera market and has released some fantastic compact digital cameras. The G series is a great example, as both amateur and professional photographers will attest to. The current G10 and the previous G9 are marvels of engineering. Michael Reichmann of Luminous Landscape fame said that most people would have trouble distinguishing a print from a Canon G10 vs a print from a medium format camera.

"In every case no one could reliably tell the difference between 13X19" prints shot with the $40,000 Hasselblad and Phase One 39 Megapixel back, and the new $500 Canon G10. In the end no one got more than 60% right, and overall the split was about 50 / 50, with no clear differentiator. In other words, no better than chance."

That's just simply incredible! A pocket camera that cost around $500 producing a 13x19 print that can't be reliably distinguished from a $40,000 Phase One 39 Megapixel digital camera... you gotta love it! Technology rolls on, and Japan prospers.

How much of Japan's prospering in the compact digital camera market is due to careful adherence to Japanese business laws? I don't know. I doubt we'll ever really know, and frankly, it isn't really at odds with you and I as consumers, so most will never care. It is interesting to consider though, especially when you think of how heated the digital camera race gets. Folks lineup on the sidelines of their favorite brand, waving their Canon or Nikon flags, wearing their Nikon or Canon baseball hats and t-shirts, and yelling obscenities at the other side. It's often quite amusing to watch. :)

In the end, you can make a great photo with pretty much any camera out there today. Geeze, old Uncle Bob shoots with a Holga. :)

See you next Monday!
Uncle Bob