Canon gear could become more expensive next year on the heels of an AI-driven memory shortage. During a question-and-answer session, Canon told investors that if higher memory costs persist into next year, those higher costs will be absorbed through price increases.
The insight comes from Canon’s October 27 financial update, where Canon lowered its initial predictions for the final three months of the year due to a component shortage for compact cameras and a slight decline in mirrorless sales numbers. Despite those predictions, the company’s imaging division – and the company as a whole – is still expected to finish the year with growth from last year’s numbers.
Now, Canon has shared the translated questions and answers from this week’s presentation in Japan – and it warns of a potential price increase next year if the high costs on memory components continue.
Early on in the questions, Canon explained how the company plans to address the continued supply shortage.
“For components that are in short supply, we are using every possible means to secure the quantities we need for next year,” the company said. “As a result, we expect higher procurement costs, but our policy is to offset those increases through price increases from next year onward. We have already been making pricing adjustments in response to cost increases as they occur, and we will continue to make decisions on passing on costs from a long-term perspective, while considering the potential impact on sales volumes and balancing that against profitability.”
While the company did not say which business segments would be affected, Canon confirmed it is considering a price increase for next year in the imaging division when asked why fourth-quarter operating profit is expected to decline compared with the previous year. Canon explained the outlook is a combination of higher memory costs and cost increases stemming from conflict in the Middle East, as well as unusually strong network camera sales.
“At this point,” Canon told investors regarding the imaging division, “we have not been able to fully pass these higher costs on through pricing. If these higher costs persist next year, we will absorb them through price increases.”
One of the reasons that Canon hasn’t already adjusted its prices is that the company saw the writing on the wall and started stockpiling the memory that it would need for 2026 early, something that Canon has told investors in previous meetings.
There’s still an “if” attached to the suggested price increase. If the higher memory costs continue once Canon has burned through that previous inventory stockpile, then a cost increase is likely.
Photographers have already seen the effects of the AI-driven demand for memory as the price of memory cards and external hard drives has risen significantly this year. Even cameras without built-in photo storage require memory components, including the processor and the memory buffer.
During the same meeting, Canon also said that the component shortage would prevent the company from fully reaching its increased production goals amid the increased demand for popular cameras like the Canon PowerShot G7 X Mark III.
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