Sony sells camera sensors to companies that compete with Sony cameras, and once you know that, the Cyber-shot line stops looking like a product range and starts looking like a shop window.
The component business is the one that actually matters. Open up a competitor’s compact and there is a reasonable chance the part doing the seeing came from a Sony fab. That arrangement is enormously profitable and it creates a permanent conflict of interest: the better Sony’s own cameras get, the more awkward the conversation with the customers buying its sensors becomes. It also means Sony gets to see every competitor’s roadmap through their component orders, which is a structural advantage nobody else in imaging has.
The Alpha is the more consequential thing to happen to this company this year, and it barely registered outside photography circles. Sony bought Konica Minolta’s camera assets and used them to enter the digital SLR market from a standing start, which is not a thing you can normally do. Building a system camera means building lenses, and building a lens catalogue takes decades. Sony skipped that by inheriting the Minolta A-mount, which means every Minolta lens sitting in a cupboard since the film era now has somewhere to go.
That is a genuinely clever piece of corporate strategy and I do not think Canon and Nikon have fully priced it in yet. They have spent thirty years assuming the barrier to entry in SLRs is the glass. Sony just bought its way past the barrier and now owns the sensor supply as well.
The compacts are a harder sell to me. The Cyber-shot range does what every compact range does at this point, which is add megapixels to a sensor that is too small to use them and hope nobody notices the noise. The Carl Zeiss branding on the front is real in the sense that there is a licensing arrangement and Zeiss has design input, and it is also doing a lot of work that the optics themselves cannot quite justify at these sizes. Image stabilisation is the genuinely useful addition this cycle, because it addresses the actual failure mode of small cameras, which is that people’s hands shake in the light levels these sensors need.
What worries me on Sony’s behalf has nothing to do with Canon. It is that the compact camera is being eaten from underneath. The K800i has a 3.2-megapixel sensor and a xenon flash and lives in a pocket that already contains a phone, and it is made by a company Sony half owns. The picture it takes is worse. It is also the picture that gets taken, because the camera in the drawer at home has a hit rate of zero.
The category that survives that squeeze is the one where the physics still matter, which means large sensors and interchangeable lenses. Sony has just bought its way into exactly that category, either through excellent foresight or through a fortunate accident of the Minolta deal being available. Either way it is in the right half of the business.
The half I would not want to own is the mid-range compact at two hundred dollars, and Sony makes a lot of those. I suspect that entire tier has about three years left before the phone in everybody’s pocket is good enough, and I do not think the industry is anywhere near ready to admit it.