With its performance plummeting, will Nikon become the next Kodak?
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In the 1970s, American imaging giant Kodak invented the world's first digital camera. However, this revolutionary product failed to bring sustained profits to the company. In 2012, this century-old company collapsed at the threshold of the digital imaging era. In the digital era, the market giants are Japan's Nikon and Canon. Most photography enthusiasts can only choose between one or the other. However, Nikon has also encountered business difficulties recently. If it does not handle it carefully, it may even become the second Kodak. A century-old store transcends time This year was supposed to be a memorable year in Nikon's history, but the decline in performance has diluted the joy. Exactly 100 years ago, in 1917, the optical measuring instrument department of Tokyo Keiki Manufacturing Co., Ltd. and the reflector department of Iwaki Glass Manufacturing Co., Ltd. merged to form a company called Nippon Kogaku Kogyo Co., Ltd. It then merged with Fujii Lens Manufacturing Co., Ltd., which laid the foundation for Nikon's future development. At that time, Nikon hired eight optical experts from Germany and 200 of its own employees to produce telescopes, microscopes and optical measuring instruments. In the 1930s, the company produced photographic lenses and used the NIKKOR trademark. In 1946, after the end of World War II, Nikon launched its first rangefinder camera body, which was put on the market in 1948. This was also the first camera named "Nikon". After that, many reporters used Nikon products when they went to the first scene to report. Its clear and sharp lenses and light and sturdy bodies made the company famous. Since then, Nikon has continuously released many classic lenses and bodies, thus establishing its benchmark position in the field of photographic equipment. In the film era, Nikon had masterpieces such as the F3 camera. In the digital transformation in the 1990s, Nikon also responded quickly compared to the former dominant Kodak. In 1999, Nikon took the lead in launching a professional-grade digital SLR camera priced under $6,000, which once changed the face of the entire professional digital SLR market. Not only was its price lower than Kodak's products, but the body was also more compact. Many news and advertising agencies were attracted by the price and performance of Nikon digital cameras and began to turn to digitalization on a large scale. Driven by professional cameras, civilian digital cameras have also entered a period of explosive growth. Nikon, which has launched a number of entry-level digital camera products, has also reaped huge profits by relying on this "wolf pack strategy". The good times are no longer falling off a cliff For Nikon, the digital age has brought both prosperity and decline, with its performance falling off a cliff in the past three years. However, what is even more puzzling to the company's managers is that the current situation is not caused by competitors coming up with "phenomenal" products, but by the impact on the entire camera industry. The position in the brand value rankings best reflects Nikon's decline in recent years. The 2015 Japanese corporate brand value rankings compiled by Interbrand, an American consulting firm, show that Nikon's "Nikon" brand value fell 29% year-on-year to US$1.5 billion, falling from 10th place last year to 16th place. In 2016, Nikon's brand value fell 30%, ranking only 21st, and in 2017 it fell another 4 places to 25th. Nikon's brand value has dropped significantly because it cannot adapt to changes in user demand. With the rise of smartphones, the market for small digital cameras is shrinking rapidly. Comparing the dazzling camera functions of Apple's new products, you will have a deep understanding of this substitutability. After smartphones "killed" a series of small appliances such as MP3 players, calculators, and pedometers, small digital cameras that brought huge profits to Nikon have become the next target. According to statistics from the US research company IDC, the global camera supply in 2016 was 81 million units, just a little more than half of the peak period in 2010. The main reason is the decrease in demand for pocket digital cameras that compete with smartphones. Nikon's financial situation has fallen off a cliff. After the company achieved its highest annual revenue of 75.4 billion yen in fiscal 2007, at the peak of the digital boom, its profits have been declining year by year, falling to 18.2 billion yen in fiscal 2015, and a loss of 9 billion yen in the previous fiscal year. In order to reverse the situation, Nikon announced last year that it would cut about 1,000 employees in Japan, which is equivalent to 10% of the company's total employees in Japan. Recently, it was reported that it would close a factory in China. In addition to layoffs, Nikon is also cutting product lines. Last year, Nikon Japan announced that it would give up launching three models of the "DL series" of high-end digital cameras priced at around 100,000 yen (about 6,000 yuan). Affected by factors such as intensified competition from low-priced models and increasing difficulty in ensuring profitability, Japanese manufacturers have vigorously developed high-end models of around 100,000 yen. Nikon had planned to use the DL series of digital cameras as a trump card to improve profitability, but defects were found before they were launched. Although it has been committed to the development of this series of models since then, it finally gave up on the market due to the lack of profit. Transformation is not easy, where is the way forward? Nikon's predicament is a microcosm of the entire camera industry. Data on the production and shipment of digital cameras and lenses in 2016 released by the Japan International Camera and Imaging Products Association show that the production and shipment of cameras and lenses decreased in 2014, 2015 and 2016, and the imaging industry has entered a difficult period. Under the impact of smartphones and mobile software, traditional dedicated consumer electronic devices no longer have competitive advantages, and traditional imaging giants such as Nikon have been forced to embark on the road of transformation. Diversification or transformation has been the development trend of these companies in recent years. Among them, Canon acquired Swedish camera giant Axis for 330 billion yen and entered the field of surveillance cameras. After selling its PC business, Sony shifted its focus to the field of games and entertainment. According to Sony's second quarter financial report for fiscal year 2017, Sony's sales revenue was 206.25 billion yen, up 22.1% year-on-year, mainly due to the growth of games and network service businesses. But in comparison, Nikon's transformation road does not seem to be smooth. Nikon, which started out as a military optical instrument manufacturer, has also entered the fields of semiconductors, microscopic imaging instruments, medical diagnostic equipment, etc., but the problem is that the business scale is not large and it is difficult to shoulder the responsibility of leading the company forward. According to Nikon's annual report for fiscal 2017, the imaging department still contributed more than 50% of Nikon's revenue, and the precision manufacturing department contributed more than 30% of its revenue, while Nikon's optical instruments and medical sectors performed poorly in fiscal 2017. To make matters worse for Nikon, the precision manufacturing division, which is second only to the imaging division, has also performed poorly in recent years. More than a decade ago, Nikon ranked first in the global market share of semiconductor manufacturing equipment business, which integrates a large number of optical technologies and is called the exposure process. However, in recent years, it has lost market share to ASML of the Netherlands and its business has continued to lose money. Judging from the current situation, in the case of a sluggish camera market, Nikon will continue to stick to SLRs in order to better utilize the business foundation accumulated over more than half a century. However, this may not be a panacea for Nikon's revival. Instead, it makes Nikon look more and more like Kodak, which went bankrupt in 2013. The latter also has a glorious history and even invented the earliest point-and-shoot camera and digital camera. As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity. |
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