news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Text｜Pacific Technology

Not long ago, a photo of former US President Trump being attacked made Sony A9M3, a professional camera priced at over 40,000 yuan, suddenly popular on the Internet. And this "decisive moment" also brought professional cameras into the public eye again.

But unlike the popular Sony A9M3, camera manufacturers are experiencing the test of ice and fire.

Recently, it was reported that Suzhou Canon has started a new round of layoffs, involving thousands of people due to market contraction. On August 1, in response to the online rumor that "Suzhou Canon layoffs will be compensated with N+12 or 2N+12", the operator of Suzhou Canon's official website responded that the company is not laying off employees but re-employment, and re-employment is a choice for everyone.

It is reported that Canon has closed a number of its businesses in China in recent years. In 2021, Canon's Chinese employees were reduced from about 1,500 in January to more than 1,300, and 10 offices across the country and 4 branches in Tianjin, Qingdao, Dalian and Harbin were closed. In early 2022, Canon announced the closure of its Zhuhai factory, which had been in operation for 32 years.

Another major camera manufacturer, Nikon, is also having a hard time. In April this year, market sources said that Nikon would lay off 2,400 employees by March 2025.

Since the birth of smartphones, the camera market has been shrinking for a long time, and the decline of camera manufacturers seems to be in line with everyone's inherent impression - increasingly powerful smartphone imaging systems are replacing traditional cameras.

But on the other hand, in the past two years, the popularity of cameras has exceeded most people's imagination. In March this year, the 90th Anniversary Limited Edition of Fujifilm's X100VI camera was sold in China, priced at 14,200 yuan. The domestic limited edition is 265 units, and the purchase is made by appointment lottery. The number of reservations for this camera on the e-commerce platform is as high as 1.2 million, which is close to the sales volume of domestic mirrorless cameras in 2023. Although there are many scalpers who resell at a higher price among the rush to buy, it is still quite rare for a digital product priced over 10,000 yuan to have such a high popularity.

Coincidentally, in June this year, Nikon Z6III was released with an official price of 18,999 yuan. Compared with the previous generation, the price of Nikon Z6III is 5,000 yuan more expensive.

On the one hand, camera manufacturers are laying off employees and closing factories, while on the other hand, cameras are in short supply and have seen sharp price increases. With both the cold and hot trends, where has the camera industry come to?

Camera market shrinks, but manufacturers are still growing

According to data released by market research firm GfK, China was the world's largest single camera market in 2023. Last year, the retail sales of mirrorless cameras in China reached 1.364 million units, a significant increase of 56.4% compared with 872,000 units in 2022; compact cameras also increased from 454,000 units in 2022 to 691,000 units in 2023.

Judging from the market performance, the domestic camera market is indeed showing an abnormally hot sales trend. However, the dominance of the Chinese market cannot save the entire camera industry. In comparison, the performance of the global market is not so impressive.

According to the global digital camera shipment data for 2023 released by the Camera and Imaging Products Association (CIPA), the global camera shipments last year were 7.72 million units, a year-on-year decrease of 3.6%; but the annual total shipment value was approximately 714.3 billion yen (approximately RMB 35 billion), a year-on-year increase of 4.9%.

This set of ups and downs shows that although the global camera industry market size continues to shrink, camera manufacturers as a whole still maintain a certain growth and profitability.

Specifically, the three major camera manufacturers all performed well.

In May this year, Nikon released its full-year financial report ending March 2024 (April 1, 2023 - March 31, 2024). The report showed that the total sales revenue of Nikon Group in that fiscal year was 717.2 billion yen, a year-on-year increase of 14.2%; operating profit was 39.7 billion yen, a year-on-year increase of 10%. Among them, the imaging business department performed the best, with annual sales revenue of 279.7 billion yen, an increase of about 23.2% from 227.1 billion yen in the same period last year; the operating profit of this business also increased by 10% year-on-year to 46.5 billion yen. Based on the outstanding performance of this fiscal year, Nikon set its sales revenue forecast for the next fiscal year at 745 billion yen, an increase of 3.8% over the previous fiscal year.

Canon also saw both revenue and profit growth. On July 25, Canon Group announced its second quarter 2024 financial report. In that quarter, Canon Group's turnover increased by 14.4% year-on-year to 1.167 trillion yen, and its net profit increased by 37.4% year-on-year. Among them, the imaging business had a turnover of 244.7 billion yen in the quarter, an increase of 11.6% year-on-year. Canon stated in its financial report that sales of small digital cameras also increased, mainly due to the strong sales of products such as the full-frame micro-mirror EOS R6 Mark II and the APS-C micro-mirror EOS R50.

Sony's revenue also grew, but its profit did not grow at the same pace as the other two major manufacturers. In fiscal 2023 (April 1, 2023 - March 31, 2024), Sony's imaging and sensing solutions business sales revenue increased by 14% year-on-year to 1.6 trillion yen, and operating profit decreased year-on-year to 193.5 billion yen.

Camera market growth is limited, manufacturers are busy with transformation

Although the financial report seems to be on the rise, the continued shrinkage of the camera market is a major trend, and each company has to consider the issue of transformation.

According to market research firm Mordor Intelligence, the global digital camera market size will be approximately US$5.39 billion in 2024 and is expected to reach US$6.83 billion by 2029, with a compound annual growth rate of only 4.85% during the forecast period.

In fact, for camera manufacturers, the transformation has already begun. For example, Nikon previously announced that it would invest 100 billion yen to upgrade and transform infrastructure such as lens factories, and instead focus on the in-depth exploration of light control components, especially lens technology. At present, this strategic adjustment has begun to show results. Nikon's optical parts business has increased its operating profit from 100 million yen in fiscal 2020 to 16.8 billion yen in fiscal 2023, becoming the second largest profit pillar after the camera business.

In addition, as a major camera manufacturer, Nikon focuses on lens technology and plans to apply it to the space industry and cutting-edge semiconductor fields, while also getting involved in the field of metal 3D printing. One of the most important actions is to increase investment in large-scale lithography machines.

Currently, ASML of the Netherlands holds 62% of the global lithography machine market share, ranking first; Canon ranks second with a 31% share; although Nikon ranks third, its share is only 7%, which is far behind the first two.

Previously, Nikon said it would launch a new lithography machine in 2024. It uses i-Line light source technology and can be used to manufacture power semiconductors that require durability. This is the first time Nikon has launched a lithography machine using mature technology in 24 years. One of the main sales targets of this lithography machine is China. Masato Hamaya, head of Nikon's precision machinery business, said that he is discussing with the Ministry of Economy, Trade and Industry of Japan and believes that there is no problem with the new lithography machine and it will be actively sold in the Chinese market.

Canon's imaging business only accounts for about 20% of its total revenue. The printing business, known as the "money printing machine", is Canon's core business that accounts for more than half of its revenue. Therefore, Canon appears to be more calm and casual in its transformation.

In 2018, Canon announced its entry into the rocket launch market and would build Japan's first private rocket launch site. On March 13 this year, Space One, a Japanese aerospace startup co-invested by Canon Electronics, launched its first commercial rocket. During the first flight, the rocket exploded after liftoff, and the launch was declared a failure. It seems that transformation also requires finding the right path.

Unlike Nikon and Canon, whose imaging businesses mainly rely on cameras, Sony produces both cameras and image sensors, which are the core components of cameras. In particular, smartphone sensors are also an important part of its imaging business.

In 2023, Sony took the top spot in mobile phone camera CMOS sales with a market share of 28%. Therefore, since smartphones are the culprit for the shrinking camera market, it is a good choice to follow the trend.

In May this year, Sony executives stated at an investor meeting that the smartphone market resumed growth last quarter, helping the company's image sensor division to regain its momentum. They are optimistic about the strengthening of the image sensor market and expect that the operating income and profit of related businesses will achieve a significant increase of 40% in fiscal 2024.

Overall, Sony Imaging's transformation is most in line with its own development. Even without the Trump incident, Sony's Imaging business still has great potential.

In addition, Fujifilm, another Japanese camera brand, has used the technology accumulated in the film era to enter new markets such as medical health, high-performance materials, and cosmetics. For example, it has applied antioxidant technology to cosmetics and nanotechnology to pharmaceutical processes.

Camera manufacturers are not the second Kodak

On January 19, 2012, Kodak filed for bankruptcy protection. This imaging company, which had been established for more than a hundred years, was once synonymous with film photography, but when the digital camera era came, it was eventually abandoned by the camera market because of its slow transformation.

In fact, when the smartphone wave came surging ten years ago, many people thought that a number of digital camera manufacturers might become the second Kodak. Especially when smartphones have more and more cameras and their imaging capabilities are becoming more and more powerful, professional cameras with heavy bodies and complicated operations seem to be getting further and further away from the general public.

However, the market has proven that professional cameras are still in high demand in news photography, sports photography, and even personal photography with high image requirements. The global camera market has seen a decline in sales, but an increase in sales, which means that while the number of camera users is decreasing, the average price of cameras is increasing, which means that the trend towards high-end cameras is becoming more and more obvious.

In general, despite the challenge of the rapid development of smartphone camera technology, the global camera industry market size has shown a shrinking trend. However, camera manufacturers such as Sony and Nikon have maintained a certain growth and profitability through technological innovation and market adjustments. Moreover, with Kodak's experience, camera manufacturers have taken a more proactive path to transformation.