What do the camera companies need to do to reverse fortunes?

Started Nov 24, 2012 | Discussions thread
caterpillar Veteran Member • Posts: 6,743
what can be done

Three elements to creating sustainable competitive advantage, although the word sustainable is suspect.

six34sigma wrote:

i) Inimitable technology

Advantage the cell phone companies, its a device that one carries all the time and provides a camera that is good enough. Mini mills vs. the steel giants (Bethlem Steel) anyone. Its time for the camera companies to join the cell phone companies to provide a hybrid device that provides the best of both worlds.


Not sure how much of a factor this is going to be ..... but the cell phone companies are big.

iii) Customer Retention

(a) Customer service is not great from Nikon for example, keep reading about issues. Not sure about Canon. (b) By providing service and products that are valuable. It cannot be just a connected camera, need for it to make calls as well, aka Nokia 808 (or whatever the number). Not sure the camera companies are doing enough to keep their customers especially those that are at a risk of flight.

Customer service if you mean repairs is the

In a developing country am more likely to buy a phone with a camera, not hope that somebody will buy a camera. It performs a primary function for me in being a telephone and the pictures it will take with a 5 or 8 MP camera will be good enough. Samsung has made a camera that is connected and seems to have the technology to bring it all together, phone and camera, perhaps as does Nokia, Sony?. But not Nikon or Canon. Bluetooth headset with a DSLR anyone? That's a bit of tongue in cheek and not serious but a SMALL compact with a blue tooth headset?

I am from a "developing country." In reality, those U$10-100 phones with camera don't have really good cameras attached to them. It's not just the meager pixel count (around 3mp only at the U$100 end), but they fare poorly in low light. In our country, people buy phones with camera for the phone, not the camera. A U$30-40 phone with a camera usually just has 1.3mp camera that is also worse in even in modest light (and really terrible in low light), not to mention the video is horrendous. In our country, you have to go U$150-200 to get a really decent phone with a decent camera. Sadly, not everyone can afford that. But that seems irrelevant  because in our country, more want the mp3 player, or TV (yes TV on a phone) than the camera which is really bad anyway for the lower end.

From what I can see of the tea leaves we should expect smaller camera companies that exist in a declining market. We as consumers of DSLR's and Compacts should expect to see the consequences of that. Reduced customer service, reduced R&D budgets as an example.

Question is "What do the camera companies need to do to reverse fortunes or do they?"

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The options are really simple. The question is the willingness to do them or what it means to a company to do them.

1)  Exit the low end and concentrate on the mid and high end. This is what Fuji is doing. Or at least minimize the models you introduce at the low end. If you are a Pentax and an Olympus, you have to exit or leave just one or 3 models as a token. You know where the true revenues come and you have

2) Compete based on low cost. This has been the strategy to delay the inevitable. But as phones themselves become commoditized, this could be a losing battle. In a connected world, more people value the phones for being a phone, than those who would value a camera for being a camera. Thus if the cost is the same or close, people will choose the phone with a camera than a camera only even if IQ is better.

3) Beat the cell phone makers at their own game. If camera parts are commoditized, so are cell phone technologies. In reality, anybody, especially, Sony, can plug cell phone components and make their own phones. But it's not as simple as that. Cameras, unlike cell phones require many things, and because you enter the realm of telecommunications. This is why camera companies simply do not become cell phone makers. Not only that, the software with smartphones require more sophistication and robustness than just the old text based ones of symbian years ago. Even if they decide to use the free Android, going cell phone for a camera company is no easy task. There are many added infrastructure and support that needs to be built and this will further strain their resources and need more money. This is why Sony, w/c also makes smartphones, isn't exactly into the thing.

4) Re-analyze the market and its segmentations; address the new markets/segments; and even better Create new markets if need be. I won't go into details, but if the low end compacts are dying, then one must study the new emerging market/segments. In this way, one no longer try to make the same stuff that likely no one will buy.One an build cameras that

5) But the better solution is to create a new market/segment. Create a new paradigm or basisi of competitiveness. Mirrorless is an example. It is a blend of taking from other existing segments, but also merging and creating a new segment that formerly does not exist.

6) In all these consolidate and create aliances with other firms whose competencies you don't possess. Or even if you can get it, or have it, it will minimize cost if you can partner with others. For example, Sony need not build all of their lenses on their own. Look at the strain in the resources that Olympus or Panasonic have to bear, but the market penetration isn't as great as Sony, who is criticized for a weak lens lineup. But if you look at it, it is weak only in certain FL and performance. Sony smartly recruited 3rd party lens makers to fill in their gaps. It's a win-win for all. CZ, Tamron, Sigma, etc gets some business, and Sony gets those holes filled up in the interim.Such efforts help lower cost and risk because it is distributed but increases the speed of innovation and provides momentum in the mid and high end segment.

This is the problem even with Nikon or Canon who are great lens makers. Even if you have the money, when you go mirrorless, basically, everyone starts all over again. The field is basically even again. This is why Canon and Nikon are holding as long as they can on their DSLR. But this is another story.

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