1. But Our Cameras Survived

2. Christian Sandstrm holds a PhD from ChalmersUniversity of Technology, Sweden. He writes and speaks about disruptive innovation and technological change. 3. The shift from film-based photography todigital imaging has put many formercamera giants in deep trouble 4. The explosion3025201510 5 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005Number of film and digital cameras sold in the United States 5. Kodak 6. Polaroid 7. Leica 8. Konica 9. Agfa 10. Hasselblad.. 11. But someold cameracompanies survived the shift. 12. Canon 13. Nikon 14. Olympus. 15. In other slideshowsI have explained why so many cameracompanies encounteredproblems. 16. Some companies like Kodak lost thevalue of their position and distribution network. 17. Agfa made money on film andwith the shift to digital imaging they lost their revenues. 18. Another explanation is that cameras used to be all about precisemechanics and optics and that the 19. the shift to electronics renderedall this competence obsolete. 20. But Canon, Nikon and Olympus alsoencountered many of these challenges,and they not only survived but alsoprospered in this shift. 21. So why did they succeed in this shiftwhen so many other firms have suffered so greatly? 22. By looking at how the Japanesecamera firms handled the shift we can learn, and maybe avoid the destruction of huge companies. 23. So lets go back to the early days of digital imaging and look at how the Japanesecompanies handled the digital threat. 24. In 1981, the industry was shakenwhen SONY launched their Mavica, a camera that used floppy discs instead of film. 25. In Japan it was referred toas the Mavica shock. They feared that something like this would happen. 26. Therefore, manycompanies invested in and launched their ownMavicas during the 1980s. 27. Canon formed a task forceto develop a colour Mavicain 1981. It was launched in1986. Fujifilm came up withsomething similar in 1988. 28. None of them lead to any great success. 29. The Mavica was simply not theway forward to digital imaging. 30. But the Japanese companieshad a high learn on investment. 31. Some companies like Canondid a lot of internal development. 32. Since the required competence wasdifferent, Canon recruited engineers and managers from electronic companies. 33. They wanted to do things in-house since it was important to obtain knowledge and renew the resource base. 34. Initially, Canon and the others targeted nichemarkets such as photo journalism, where digital imaging could be nurtured. 35. Digital imaging was developed in a separateorganization that was not subject to the daily internal competition for resources. 36. Eventually, thedominant design emerged. 37. In 1995 Casio launched the QV10. 38. It had an image qualityof 0,25 Megapixels andrequired 4 AA batteries. 39. Not the greatest gadgetmankind has invented. 40. But the concept ofhaving a LCD screen andthis design turned out tobe very attractive. 41. Now the big Japanesedragons like Canon,Nikon and Olympusinvested a lot indeveloping this concept. 42. The Japanese firms worked jointly in an industryassociation to solve critical technical issues. 43. Moreover, they made sure that the structure was modular, so that eachindividual component couldbe improved separately. 44. Instead of fighting battles about standards,each company could instead focus on theproduct and reducing R&D costs. This created a healthy competition - each onedifferentiated within the defined settings. 45. The modular, standardized structure also implied that consumer electronics companies could workon each component. 46. Memory cards 47. Image sensors 48. LCD screens 49. could be developed by companies like Sanyo. 50. Sanyo provided the bigcamera firms with electroniccomponents, and they couldinstead focus on optics, design and development. 51. Each componentwas nowsubject torapidimprovement. 52. Once the cameras were goodenough and cheap enough 53. Products like Canon Ixus 54. And Nikon Coolpix now flooded the market. 55. Soon after, AgfaPhoto was indeep trouble 56. And Kodak was in deep trouble 57. The Nikon D1 from 1999 was the first true alternative for photographers who wanted digital cameras. It was mortal to many of the old camera firms 58. It put Hasselblad in deep trouble. 59. And Leica was in trouble. 60. The Japanese cameracompanies help us tounderstand how a firm can master a digital revolution: 61. 1. Enter early andexplore the technology. 62. 2. Separate thedevelopment from yourmainstream business. 63. 3. Recruit people whohave extensive experience of the technology. 64. 4. Find a nursing market which can tolerate the high price and the lowperformance. 65. 5. Collaborate with others and find acommon standard. 66. 6. Create a modularstructure where other companies with expertise can make improvements on acomponent level. 67. Image attributions 68. Find out more about the camera industry here:www.christiansandstrom.org 69. Christian Sandstrm