Will Nikon be out of business in 5 years?

Started 11 months ago | Discussions thread
Eamon Hickey
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In reply to Jeff, 11 months ago

Jeff wrote:

Now specifically with regard to Nikon, they have the financial, brand, and technical resources to hang in their for a while, perhaps a long while. But I suspect, for the reasons mentioned above, that they do have a walk through the 'valley of death' coming their way over the next 5-10 years. It'll be interesting to see what Nikon looks like in 5-10 years. Some companies pull if off (see Apple), others don't (see Kodak).

From some public comments over the past year, I think it's evident that Nikon management is well aware that they've got a walk through the valley of death coming up. They've actually been more forthright about that than any other camera company, although, of course, they need to be, since investors can clearly see that Nikon is more exposed to disruptions in the camera business than anybody else is.

This is fairly obvious, but I'm sure that one major thrust of their plans to deal with a changing camera business will be to look for additional non-camera optical businesses to get serious about. Steppers (Precision (Optical) Equipment) looked glorious in the 1980s (and was both very profitable and also a seemingly perfect fit for Nikon), but it's proven a very fickle mistress over the last 15 years.

In other words, yes, they need to be smart about how to build cameras for the future, but equally, they need at least one more big optical business. I'm sure they know that. Whether they can find it is another question entirely. The most obvious route, to my eye, is medical optics, which they already have a small presence in.

In any case, they have done it before. Making cameras was itself one such transition -- for their first 30 years, they were primarily an optical munitions manufacturer. In 1946 they found themselves shrunk from twenty factories to one and with nothing to sell (their only real customer, the Japanese Imperial Navy, was almost entirely at the bottom of the ocean at that point). That was a much deeper, darker hole than anything they'll face now.

Anyway, they decided to start making cameras for consumers, and it worked. They did it again in the late 1970s when they got into the stepper business (invented by the American company, GCA) and within a decade became a precision equipment company with a relatively small sideline in cameras. (Obviously, that has since reversed.)

So, like most companies with a long history, they've transformed themselves successfully before. As you said, we'll see if they can do it again. I don't have a prediction, but I will say that their senior management has been much more able than it was in the 1990s -- Nikon is much better run than it was in the 1980s and 90s, and it's better run than several other high-end optical companies, so I think they've got a decent shot.

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