The future for Fuji cameras

Started 9 months ago | Discussions
57even
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Re: This might provide a perspective
In reply to Chris Dodkin, 9 months ago

Chris Dodkin wrote:

The generation and adoption of new technologies is not a new phenomenon, it's been going on for hundreds if not thousands of years.

There has been a great deal of study in this area, and models have been generated that help companies plan their product launches, and understand where they stand as new technologies make their way to market.

There are no guarantees, but there are well developed models which have been well proven over time.

There are two that we can review here, based on the OP:

The Hype Cycle model (used by Gartner since 1995)

The Technology Adoption Lifecycle model championed by Everett Rogers and Geoffrey Moore

The accepted model is that a new technology goes through the following three phases:

  1. Hype: Search for next big thing leads to Hype around any new technology.
  2. Struggle: Adoption of these Bleeding Edge technologies depended on the Visionaries who had the vision, energy and money to make it work.
  3. Success: Mainstream adoption required convincing the Pragmatists who needed success stories and support system around the technology.

You can simplify the two models, and see their relationships by plotting Expectation and Adoption Rate against time, on a pair of graphs.

The top graph maps the expectations over time - you may not recognize the exact terms used, but if you think about new technologies that you've seen come to market, you'll see how the cycle of expectation maps to this diagram.

The OP based on the NYT article would put us right after the peak of inflated expectation, and in the trough of disillusionment.

The lower graph shows the adoption of new technologies over time - initially you have innovators picking up the new products, sales are low because most people are not comfortable investing in bleeding edge tech, and want to see success stories in order to feel comfortable to make the investment in a new tech or system.

As sales grow you have to cross the chasm from the early adopters, to the Majority - where normal folk start to see the product as a viable option, and feel safe buying it. This is where volume of sales rises steeply, and the profitability/productivity comes.

Based on the sales numbers, we'd say that Fuji are currently trying to cross the chasm - you see them injecting the market with body+lens deals to get the adoption rate up, building momentum to try and cross the chasm and get to that mainstream (majority) adoption phase.

Companies are well aware of these models, so you could expect that Fuji have planed for this ahead of time, and have a strategy in place to reach profitable sales to the plateau of productivity.

This is the piece that is not in the public domain - we don't know the details of their strategy.

However - for us 'Early Adopters' - we at least have a perspective of why we see what we see regarding sales numbers, visible numbers of cameras in the field, special sales promotions from the manufacturer, statements about profit and loss etc etc.

Because without the bigger picture, you might be confused as to what's going on and why.

At the end of the day - new technology adoption rarely happens overnight - all of this takes a lot of time and money, and there's still no guarantee of success.

Some people are ok with that - they like being here at the bleeding/leading edge.

Some people are uncomfortable with that - you see them post here and express their discomfort with the technology, or the products progression, or the companies performance.

It's an interesting journey - should be fun to see how it all shakes out.

More detail on the Hype Cycle idea here: http://www.gartner.com/technology/research/methodologies/hype-cycle.jsp

More Detail on the Technology Adoption Cycle here: http://www.hightechstrategies.com/profiles.html

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Yes, it is very hard to become mainstream in a market dominated by the big players. You have to offer something different, you have to have your value proposition well articulated and you have to rely on good old fashioned channel management to get the message out.

Fuji are going for the start small and get the enthusiasts on board approach. Word of mouth is a key enabler in niche markets, if not such a big deal in mass markets. I somehow doubt Fuji is aiming to be more than a niche player, but it needs to have stable sales and profit from what it does produce. I'm sure they would be happy around the 1M units mark (ie about 10% of Nikons DSLR sales). If they are selling 700k that's a good start.

I reckon it's probably the #1 second camera for enthusiasts and pros who already own a top end DSLR. OK that's a small niche, but a high value one. Keeping revenue constant is a major concern, but once you have established lenses and a camera range, the profit ratio increases.

Have been reading Reuters prophet of doom forecasts for years and they are always wide of the mark.

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WDYZ
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Re: The Pro's are starting to switch now...
In reply to Robert Garcia NYC, 9 months ago

Fuji x system for photographers,amateur or professional; has always been niche markets. High profit margin per unit sold. Probably (?)higher profit margin with smaller mirrorless bodies and lenses then dslr.

Compacts/phones for taking snapshots. Heavy reliance and investment in advertising. Low profit margin per unit sold, hence volume sales needed.

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lolopasstrail
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Re: The future for Fuji cameras
In reply to Bernie Ess, 9 months ago

Bernie Ess wrote:

True, and it is not just Fuji. Nikon is in real trouble for example.

Nikon continues to be profitable.  Fuji has probably never been profitable in digital cameras.  if Nikon "is in real trouble," I'm sure that's trouble Fuji would love to have.

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lolopasstrail
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Re: The future for Fuji cameras
In reply to lolopasstrail, 9 months ago

I sure hope Fuji survives, but the numbers and trends are working against them and some of their competitors.

Fuji has dropped unprofitable camera lines before, including most recently its innovative DSLRs.  Innovation and fandom didn't save them.   A public company answerable to shareholders cannot carry a money losing product line forever.  I'd say the clock is ticking, but I don't know what time the alarm is set for... hopefully a long time from now.

I don't currently own any interchangeable lens Fujis.  If I hear their line is about to go under, I think I'll quickly snatch up a body and a couple lenses while I still can, use them as long as I can.

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dark13star
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Re: This might provide a perspective
In reply to Chris Dodkin, 9 months ago

Chris Dodkin wrote:

Based on the sales numbers, we'd say that Fuji are currently trying to cross the chasm - you see them injecting the market with body+lens deals to get the adoption rate up, building momentum to try and cross the chasm and get to that mainstream (majority) adoption phase.

I agree. They are crossing the chasm and from what I can see of their execution strategy, they are doing it well.

I launch technologies for a living (web based) and I've seen great success, transforming entire industries, and I've seen failure. Even worse, I've seen failure of excellent technologies because the companies didn't have the guts and commitment to stick to their strategy of crossing the chasm. I've seen great technologies languish to the dismay of the early adopters, just because current business needs changed and investment was scaled back.

I think Fuji is investing well. I also like their use of roadmaps to inspire confidence. I've used them as well. There is always the tradeoff between revealing innovation to competitors and building confidence in the market so people will buy. Fuji's roadmap was part of what helped me switch from Sony Nex. I knew the lenses I wanted were coming, even if they weren't here yet, and I was confident Fuji would deliver them (if not always on time).

Rich

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Cogset
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Re: This might provide a perspective
In reply to dark13star, 9 months ago

My gut is that they will stick to the x-series strategy. I think you're right in that the publicized roadmaps give confidence.

A lot of folks don't know how diversified Fujifilm really is. That's good news because they have the resources to stick it out for quite a while. Outside of Digital cameras and Optical devices they have businesses in Cosmetics, Pharmaceuticals, Supplements, Medical diagnostics and software, FPD materials and other highly functional materials. They also have a joint business with Xerox called Fuji Xerox outside the U.S for laser printers, and on demand publishing systems and copiers.

Imaging Solutions (which includes consumer digital cameras), is less than 15% of the total company these days.

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Tom Davis
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Re: This might provide a perspective
In reply to dark13star, 9 months ago

I want to second dark13star's perspective: I too switched from Sony NEX primarily because of the development of the XF lens line and then the solving of the Raw conversion difficulties (I use Capture One Pro 7). Confidence in Fuji's lens roadmap was key. And, frankly, I have confidence in their colors for portraits.

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Joel Stern
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Re: The future for Fuji cameras
In reply to mooshoepork, 9 months ago

mooshoepork wrote:

IKB wrote:

It's not rankings that matters, it is profitability. If Fujifilm can make money, then why abandon these products?

Have you seen Fujifilm's financials? There is no profitability at all in their camera division. Nothing but losses.

Are they on track?

No, they are going backwards. Losses increased by 260% last quarter, year on year.

Only they know,

No, we do, as the documents are public.

in the meantime enjoy the products.

Absolutely.

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Malcy
----------------

Was going to reply with this!

Their p&l and balance sheets are available on their website.

It's not about whether or not they make a good product (I think they do...)

It's about whether or not enough other people do. We're definitely a niche market...and it frustrates me sometimes. I think they deserve to do well. Canon just recycle the same sensor every year.

Panasonic m43 has the same problem.  Not sure about Olympus.  If these companies go under then what, no more firmware updates, lenses.  I think we have a couple of years to see what will be.  It does suck though.

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Joel Stern
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Re: The future for Fuji cameras is with Bayer?
In reply to justinwonnacott, 9 months ago

justinwonnacott wrote:

I will not purchase another fuji that has an xtrans sensor. Otherwise... i am a potential customer.

Why not?

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If i am typing on my iPad, please excuse any typos.

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Ralph McKenzie
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Re: The future for Fuji cameras
In reply to Graham Hill, 9 months ago

Graham Hill wrote:

IKB wrote:

It's not rankings that matters, it is profitability. If Fujifilm can make money, then why abandon these products?

Have you seen Fujifilm's financials? There is no profitability at all in their camera division. Nothing but losses.

Are they on track?

No, they are going backwards. Losses increased by 260% last quarter, year on year.

Only they know,

No, we do, as the documents are public.

in the meantime enjoy the products.

Absolutely.

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Malcy
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Graha, can you share the links to these financials you refer to please?

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David Mintzer
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Re: This might provide a perspective
In reply to Tom Davis, 9 months ago

Well it might help if Fuji, when releasing a camera like the X100S made enough of them so that they could meet demand.  I know of two people who got tired of waiting for them to become available who ended up buying another brand. Then again, if their financial situation isn't great, perhaps they couldn't take the risk of producing too many cameras.

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Graham Hill
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Re: The future for Fuji cameras
In reply to Ralph McKenzie, 9 months ago

Ralph McKenzie wrote:

Graham Hill wrote:

IKB wrote:

It's not rankings that matters, it is profitability. If Fujifilm can make money, then why abandon these products?

Have you seen Fujifilm's financials? There is no profitability at all in their camera division. Nothing but losses.

Are they on track?

No, they are going backwards. Losses increased by 260% last quarter, year on year.

Only they know,

No, we do, as the documents are public.

in the meantime enjoy the products.

Absolutely.

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Malcy
----------------

Graha, can you share the links to these financials you refer to please?

www.fujifilm.com

Click on investor relations and then find the most recent quarterly report.  It's all there, going back over a decade.

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Graham Hill
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Re: The future for Fuji cameras
In reply to Asylum Photo, 9 months ago

Asylum Photo wrote:

Graham Hill wrote:

57LowRider wrote:

I feel that they should be doing better than they are; perhaps they need to capitalise on the most common response from new X system users: "Fuji put the fun back into photography". Their ad people can use that alliterative line and make it theirs, it's no lie.

Fujifilm advertises??

http://www.youtube.com/watch?v=1WwzpFx9jk4&noredirect=1

This ad played while I watched a show on Hulu the other day. I was surprised to see it.

It's very Japanese, I don't think the style of it will do much good in the US.

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Interesting.   While I was in Fujifilm's corporate headquarters, they had a computer kiosk that had a display of every TV commercial that Fujifilm ever produced.  That was interesting.  Many were non camera related but most were about their photographic products.  They were all in Japanese so I didnt view too many of them.

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Graham Hill
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Re: The future for Fuji cameras
In reply to 57even, 9 months ago

57even wrote:

Asylum Photo wrote:

It really depends on if they make money on the X-Series.

The fact that they lost money on imaging,

They made money on smartphone camera modules which partly offset the decline in compact sales. Losses were small and overall earnings company wide were up on the same period last year.

http://www.fujifilmholdings.com/en/pdf/investors/finance/materials/ff_fy_2014q2_001.pdf

but are really focusing on the X-Series tells me that Fuji thinks the X-Series is their best shot at profits. Whether that's true for the future or not, is to be seen. It's a tough market unless you are Nikon, Canon or Sony/Olympus now.

At the very least we will have some new products next year. And our existing products should still work for years to come.

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Reuters article fails to mention the fact that smaller companies have minimal penetration in the US compared to the big three. Only reasons SLRs are still dominant are:

1. Price - entry level prices for DSLRs are still low compared to mirrorless. Fuji's low cost entry level is a bid to fight off that difference.

2. Brand - most people only know Nikon and Canon in the camera market, and they push SLRs so that's what people buy.

But Fuji has good traction with pros,

How can you say this?  Good traction compared to what? Nikon or Ricoh?

and many people here have given up on SLRs for them. So I think there is a future, if they hold out. They can be profitable with low sales if they don't end up with huge inventories.

Fujifilm is not set out to be niche.  They just opened up a new lens manufacturing factory in the Philippines.  My company has been there to try to secure them as a customer.  My colleague said that they currently have 5 glass grinders there, but have plans for over 150 more once the plant is fully up and running.  They need serious volume to support that plant.  It was not cheap to build.

Contrary to FUD from some quarters around here, Fuji's financials don't look too bad overall. Losses in imaging are all in the compact camera segment.

Absolutely false.  You cannot claim that with any accuracy.  If I am wrong, you can post said evidence.  Fujifilm's verbiage on the X cameras line has become distinctly lukewarm over the past two years.  In the previous quarterly report, INSTAX cameras got more press than the X cameras.  That is *amazing*.  The X cameras did not even appear on the slide where growth in 2014 was projected.

Certainly looking better the Olympus and Panasonic.

Absolutely as Fujifilm Holdings is profitable.  But this is not enough as Fujifilm's CEO has strong growth plans.  If cameras do not perform, they will drag down growth.

I guess we will never know their long term plan for the X series in terms of sales and revenues, but they started from zero only 2 years ago.

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dark13star
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Re: This might provide a perspective
In reply to David Mintzer, 9 months ago

David Mintzer wrote:

Well it might help if Fuji, when releasing a camera like the X100S made enough of them so that they could meet demand. I know of two people who got tired of waiting for them to become available who ended up buying another brand. Then again, if their financial situation isn't great, perhaps they couldn't take the risk of producing too many cameras.

David,

I don't know if this is true, but I read, in multiple places, that Fuji lost a whole shipment to the US to water damage during shipping, which led to the shortage in the US. I did get a not from Amazon about my order stating that there was a problem with a shipment and my X100S took four weeks from the time I ordered it. It was worth the wait though.

Rich

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Graham Hill
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Re: This might provide a perspective
In reply to 57even, 9 months ago

57even wrote:

Yes, it is very hard to become mainstream in a market dominated by the big players. You have to offer something different, you have to have your value proposition well articulated and you have to rely on good old fashioned channel management to get the message out.

Fujifilm has certainly made a different breed of camera.  If they were as successful getting that message out as they were making the camera, we would not be having this discussion now.

Fuji are going for the start small and get the enthusiasts on board approach. Word of mouth is a key enabler in niche markets, if not such a big deal in mass markets. I somehow doubt Fuji is aiming to be more than a niche player, but it needs to have stable sales and profit from what it does produce. I'm sure they would be happy around the 1M units mark (ie about 10% of Nikons DSLR sales). If they are selling 700k that's a good start.

That 700k sales figure recently published was from the START of the X camera line up until the present date.   It was not an annual figure.  That's a HUGE difference.  CaNikon sells millions of SLRS per year.  Fujifilm is not even remotely close to that kind of volume.  That's why Fujifilm's market share doesnt even register in their home country!  Think about that.  They have under 2% market share .  It boggles the mind how such utter tripe can outsell such quality cameras.

I reckon it's probably the #1 second camera for enthusiasts and pros who already own a top end DSLR. OK that's a small niche, but a high value one. Keeping revenue constant is a major concern, but once you have established lenses and a camera range, the profit ratio increases.

Fujifilm's revenue did go up last quarter.  It's just that losses did too.   What is very concerning is that they made a major accounting move last quarter by adding in the former Fujinon company into Imaging Solutions.  Previously, they were there own, separate unit.  The optics group is VERY profitable.  I see this as a way for them to help keep the losses from Imaging Solutions to grow even higher.  Imagine how bad the losses would look without adding a major profitable division into Imaging Solutions.

Have been reading Reuters prophet of doom forecasts for years and they are always wide of the mark.

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David Mintzer
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Re: This might provide a perspective
In reply to dark13star, 9 months ago

dark13star wrote:

David Mintzer wrote:

Well it might help if Fuji, when releasing a camera like the X100S made enough of them so that they could meet demand. I know of two people who got tired of waiting for them to become available who ended up buying another brand. Then again, if their financial situation isn't great, perhaps they couldn't take the risk of producing too many cameras.

David,

I don't know if this is true, but I read, in multiple places, that Fuji lost a whole shipment to the US to water damage during shipping, which led to the shortage in the US. I did get a not from Amazon about my order stating that there was a problem with a shipment and my X100S took four weeks from the time I ordered it. It was worth the wait though.

Rich

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Interesting Rich, this is the first I heard of that.  I know that its often hard to get a Fuji when first released, but this was a bit longer then usual.  I love the camera and it was worth the long wait.

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Caerolle
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Re: The future for Fuji cameras
In reply to Graham Hill, 9 months ago

Graham Hill wrote:

Fujifilm is not set out to be niche. They just opened up a new lens manufacturing factory in the Philippines. My company has been there to try to secure them as a customer. My colleague said that they currently have 5 glass grinders there, but have plans for over 150 more once the plant is fully up and running. They need serious volume to support that plant. It was not cheap to build.

and

Absolutely false. You cannot claim that with any accuracy. If I am wrong, you can post said evidence. Fujifilm's verbiage on the X cameras line has become distinctly lukewarm over the past two years. In the previous quarterly report, INSTAX cameras got more press than the X cameras. That is *amazing*. The X cameras did not even appear on the slide where growth in 2014 was projected.

I don't understand how these two things can both be true? If they are going full-blast on this plant, and the only use for its products is the X-line (I am guessing, maybe I am wrong), how can they be lukewarm on the X-system? Or, if they are lukewarm on the the X-system, why are they continuing with doing such a large start-up with that plant?

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Graham Hill
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Re: The future for Fuji cameras
In reply to Caerolle, 9 months ago

Caerolle wrote:

Graham Hill wrote:

Fujifilm is not set out to be niche. They just opened up a new lens manufacturing factory in the Philippines. My company has been there to try to secure them as a customer. My colleague said that they currently have 5 glass grinders there, but have plans for over 150 more once the plant is fully up and running. They need serious volume to support that plant. It was not cheap to build.

and

Absolutely false. You cannot claim that with any accuracy. If I am wrong, you can post said evidence. Fujifilm's verbiage on the X cameras line has become distinctly lukewarm over the past two years. In the previous quarterly report, INSTAX cameras got more press than the X cameras. That is *amazing*. The X cameras did not even appear on the slide where growth in 2014 was projected.

I don't understand how these two things can both be true? If they are going full-blast on this plant, and the only use for its products is the X-line (I am guessing, maybe I am wrong), how can they be lukewarm on the X-system? Or, if they are lukewarm on the the X-system, why are they continuing with doing such a large start-up with that plant?

The verbiage in their financial reports reflects the current reality.  Fujifilm's plans, I believe, are to drastically improve upon the current performance.

Also, it is highly unlikely that this plant is only for X camera lenses.   If we secure their business, I am going to push hard to get myself into that plant and have a look-see.

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TThorne
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Re: The future for Fuji cameras
In reply to Graham Hill, 9 months ago

Fujifilm is like that really innovative and creative spoiled son that is still supported by his father who remains proud of him despite the continuous losses. Big Daddy Fuji Holdings will not let his son go without, and will likely finance his son's adventures forever, not necessarily hoping to turn things around profit/loss wise, but just because he takes so much pride in his kid.

It is really a very cute and heart warming relationship that makes almost no sense business wise for Fuji. Make no mistake, the support comes from a personal and emotional place.

That being said, let me assure everyone that Fujifilm is not going anywhere. Fuji Holdings is RIDICULOUSLY successful and wealthy, and they will likely always pull Fujifilm up by the bootstraps and let them keep playing. It is really just a drop in the bucket for Big Daddy.

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