It's a perplexing state of affairs: the DSLR as a product category is officially on life support now that more mirrorless cameras ship every year. Of what is left of the DSLR sector, Canon and Nikon hold a staggering 98% of it. So, why on Earth is Pentax releasing a flagship model?
Pentax has officially unveiled the K-3 Mark III, its flagship 26MP APS-C DSLR that builds upon the previous iterations. For those with hazy memories, the 24 MP Mark I arrived in 2013 with a great sensor, IBIS, and much-improved autofocus. There was also a novel virtual anti-aliasing filter that worked using the IBIS system. The Mark II arrived in 2015 with an in-built GPS unit that had additional Astrotracer functionality, as well as a pixel shift feature that allowed for higher-resolution raw files. The Mark III now sports a new 26 MP sensor with a top ISO of 1.6 million and includes a panning module, a completely revised autofocus system, better IBIS, and 4K video. Perhaps the biggest changes are with the body, which has undergone significant revision including an all-new pentaprism viewfinder, something Pentax is keen to highlight.
Perhaps what Pentax has best captured with the K-3 range is a fully featured APS-C DSLR that plays to its core customers. This product category has something of heritage, with the likes of the much-beloved Nikon D300 and its eventual replacement, the D500. As I've commented on before, the APS-C market is comprised of two segments: firstly, higher-end users who need great reach and fast shooting speeds and secondly, a more amateur-focused market, where cost is a greater differentiator. Off the bat, the K-3 range has never intended to be in the first of these. Pentax has a heritage built upon well-made, competitive cameras that can use their vast back catalog of lenses. And once you are tied into a system, you tend to stick with it. It's for this reason that we see the development of high-end APS-C models, and the K-3 Mark II had strong competition in the form of the Canon EOS 70D, Fuji X-T1, Nikon D7200, and Sony A6000 to name but a few. This isn't a surprise, as with the contraction of the camera market, the focus has shifted to more profitable segments, such as the high-end amateur.
A Mirrorless Future?
So, where does all this leave Pentax and the K-3 Mark III? Is it better than the Nikon D500 (or D7500) or Canon Rebel T8i? Or the Fuji X-T3, Sony a6600, or Nikon Z50? It's certainly got some fine credentials based around favorable Pentax ergonomics, a good optical viewfinder, and that IBIS system that is used to great effect with the virtual anti-aliasing filter and pixel shift system. Yet the biggest problem it has is that it's a DSLR.
As a reminder, the camera market peaked at 120M units shipped in 2011 and has subsequently shrunk from that highpoint to the current low of 8.7M. It's not necessarily as desperate and bleak as that figure suggests — COVID has severely impacted all businesses, and in 2019, the number of cameras shipped was a more respectable 14.8M units, similar to the number in 2000. In short, we seem to be returning to a high-ticket, niche technology item rather than a mass-market compact camera sector. That manufacturers are targeting high-value goods is no surprise.
However, the other big news for 2020 is that more mirrorless cameras were shipped than DSLRs. In fact, the latest 2020 figures suggest there were just 2.4M units sold with only 40,000 not attributed to Nikon or Canon (which Pentax will account for). DSLR sales are unwinding quicker than might have been anticipated, which has caused Nikon to rapidly restructure its Imaging Division. In fact, any release of a DSLR is now a surprise, with the 2020 arrival of the Canon Rebel T8i met with some bemusement. Was this a case of historic development plans, squeezing every last penny out of a dying market or just plain crazy business? Whatever way you look at it, the days of volume DSLR camera sales are long past, and while lens sales will likely persist for some considerable time, it is hard to see any kind of future for DSLR development.
Pentax and the K-3 Mark III
Following on from the above, the delayed and belated release of the K-3 Mark III is somewhat baffling. I've commented before on the bizarre business strategy of Pentax, with the headline for its brand vision website:
Pentax believes in the future of SLR photography
Yet that's patently not the case. The brand vision is therefore not so much about the fundamental principles of Pentax as a business and how it will build its camera division going forward, but rather as a backstop to justifying a DSLR-only ILC development strategy. I don't doubt the cost of developing a new mirrorless is hefty; in a general sense, Nikon's financial results demonstrate this, as it has had to maintain the absolute cost of research and development while income has dropped. As a result, a greater percentage of income is going to R&D. This was fine when camera manufacturers were cash-rich at the height of the market, but is much more difficult to justify in a declining sector.
The key question for Pentax that then follows is this: are existing sales enough to maintain a DSLR-only approach? Given that Olympus divested itself of its Imaging Division on sales of up to 10 times the number of cameras, it would be difficult to argue for this. However, all camera businesses are not the same, and it is difficult to know what internal cross-subsidy might be happening. For example, Fuji has a small but successful digital camera division, where much of the profit is driven by its Instax business.
However, Pentax's portfolio is diminishing, increasingly stale, and outdated. Witness the 2014 medium format 645Z — sector-leading at the time — still on sale. The K-3 Mark III is a DSLR that appears to be able to rank alongside the best in the sector and bears some striking similarities in the target market to the Olympus' OM-D E-M1X. That fact is at least reassuring for customers; however, Olympus' future took a sharp turn shortly after the release of the E-M1X. What Pentax's future is remains to be seen.