The future for Fuji cameras

Started Dec 31, 2013 | Discussions
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57even Forum Pro • Posts: 10,236
Re: This might provide a perspective

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 New Member • Posts: 15
Re: The Pro's are starting to switch now...

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.

lolopasstrail Regular Member • Posts: 261
Re: The future for Fuji cameras

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.

lolopasstrail Regular Member • Posts: 261
Re: The future for Fuji cameras
1

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.

dark13star
dark13star Senior Member • Posts: 1,583
Re: This might provide a perspective
3

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
Cogset Senior Member • Posts: 1,508
Re: This might provide a perspective

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 Regular Member • Posts: 134
Re: This might provide a perspective

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
Joel Stern Forum Pro • Posts: 10,915
Re: The future for Fuji cameras

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

Joel Stern
Joel Stern Forum Pro • Posts: 10,915
Re: The future for Fuji cameras is with Bayer?
1

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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Ralph McKenzie Senior Member • Posts: 1,930
Re: The future for Fuji cameras

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?

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David Mintzer Forum Member • Posts: 77
Re: This might provide a perspective

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.

Graham Hill Senior Member • Posts: 1,355
Re: The future for Fuji cameras

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 Senior Member • Posts: 1,355
Re: The future for Fuji cameras

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.

Graham Hill Senior Member • Posts: 1,355
Re: The future for Fuji cameras

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.

dark13star
dark13star Senior Member • Posts: 1,583
Re: This might provide a perspective

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 Senior Member • Posts: 1,355
Re: This might provide a perspective

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.

David Mintzer Forum Member • Posts: 77
Re: This might provide a perspective

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.

Ralph McKenzie Senior Member • Posts: 1,930
Re: The future for Fuji cameras

Graham Hill wrote: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.

Interesting you should mention the Instax. Its the only Fuji camera that receives any media coverage, in retail flyers or television advertising. You never see a Fuji advert on TV pertaining to anything other than that camera and occasionally the S8400 when its on special from a retail chain.

Otherwise Fuji advertising is no existent.

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a l b e r t Senior Member • Posts: 1,440
Re: The future for Fuji cameras

Graham Hill wrote:

I too rarely ever see any Fujifilm adverts. In Hong Kong, you can see an almost unlimited number of signs for Canon, Nikon, Sony, and even Olympus. Fujifilm? Almost nonexistent. It is a real shame that they do not try to get their name out there.

That's not true.  I walked by a bus stop the other day near Tin Hau MTR station and saw the glass canopy covered with a X-E2 ad.  X-E2 ad is also seen on prime time TV.  Have you watched any of those HK TV soaps during prime time?  I guess you didn't.

But even so, I'd have to say their marketing effort is not particular effective.  Instead of shooting their own localized ads, they simply take the Japanese TV ad and make it their own.  You watched the whole ad and probably still don't know what they are selling, other than showing you the cameras at the end.  The ad also used young actors, as if they're trying to sell the X to the younger generation.  For all we know, the X is more adopted by the older generation, often with people older than 40.

During my recent trip to Japan, I looked for Fujifilm ads and again, came up virtually empty. What was more depressing was going to Fujifilm's corporate headquarters. There I visited a large exhibt that they have built, showing the history of photography, the history of Fujifilm, ALL of their current cameras on display, as well as a nice photography art exhibit. In downtown Tokyo, a city of 35 million people, at 1pm I was the ONLY person in the whole place. I could NOT understand that. Go to a Sony and Nikon store and they are packed with people. Fujifilm's store was like a library.

I was in Osaka/Kyoto in Nov 2012.  The locals were mostly using Sony NEX and m43 (Oly and Panny).  Few have APS-C DSLRs and for the locals using FF DSLRs are the grannies.  In case people don't know what is happening with Japanese economy, the older generations are often retired with loads of money.  They dine out everyday, travel everywhere and have the cash for FF DSLRs.  The younger generations are the ones that are struggling.  No more flashy cloths and they have to settle for anything but the very best.

Now, go back in time to the beginning of 2008.  I was in Tokyo and I saw a lot of younger locals using Fuji cameras.  But mostly they are small compacts, especially the ones with an internal zoom lens.  Now that small digicams are dead, Fuji has nothing to hold on to, except feverishly trying to catch up, and APS-C mirrorless is their target.  I can see why Fuji is doing all those cut throat sales, they need to build up a user base ASAP.  They're also making as many X ILCs as possible to cover all bases.  One can get a pretty cheap APS-C NEX-3 with similar price to a enthusiast compact.

The other method of luring user base is to give superb after sales support.  From reading all the reports here plus my own personal experience, Fuji is trying to give customers the best and most satisfying support to keep them in their camp.  I think they are succeeding, but with a high cost.

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deednets Veteran Member • Posts: 5,427
Focus on High Quality versus budget cameras according to Fuji
2

mooshoepork wrote:

Not trying to troll...

But given the recent sales reports over at fuji rumors, does anyone else worry about the potential for Fuji to throw in the towel and abandon this venture?

Having only sold 700,000...seems really low.

I love my x100s and x-e2, but I'm worried that if they continue to not make money they'll withdraw.

It's a tough market to crack, and I hope they fair better in 2014.

Thoughts?

Following the Fuji future projections, there are a few interesing aspects on their website:

"While sales were favorable for products such as the FUJIFILM X-E1, the premium interchangeable lens camera that went on sale in November 2012, and the FUJIFILM X100S, a premium compact digital camera the Company launched in February 2013, a surge in popularity of smartphones has been causing demand for compact digital cameras to decline. Accordingly, sales in the whole segment were down, at ¥92.0 billion"

... and:

"Future Initiatives:

  • Expand sales of high-end models and interchangeable lens systems
  • Reduce the number of compact models and substantially revise the model mix, concentrating on differentiated products
  • Merge with the optical device business, enhancing synergies from development and production through to sales"

... and further down:

"Although the market for compact digital cameras is shrinking, demand for high-quality photographs is growing. Our X-Series of high-end digital cameras that concentrates on image quality, operational sense and texture is particularly beloved of photography aficionados.
As we expect the market for digital cameras with interchangeable lenses to grow, we plan to increase our lineup of interchangeable lenses for the X-Series from the current 6 to 10 by January 2014.
Furthermore, in June 2013 we integrated the optical device business, which provides a variety of lenses, with the electronic imaging business, which handles digital cameras. The resulting structure should be capable of quickly developing high-quality products that deliver high image quality, responding to the demands of customers who value authenticity."

So this in fact doesn't sound as bleak as some figures would suggest. In fact there seems to be a move towards higher quality rather than mass products.

If that's the route they want to go, I am all for it!

Deed

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