It’s an odd accident that the corporate that rivaled Kodak in movie manufacturing however at present makes little or no of its cash from the digital camera enterprise ought to now be the most important digital camera producer on the planet.
Nevertheless, earlier than marveling on the technical deserves of the X and GFX Programs, ponder that it’s truly Fuji’s Instax movie cameras which might be the supply of its success having bought over 50 million items to this point. How did Fuji get so far?
Whereas Fuji may be seen because the doyen of digital camera aficionados, lovingly crafting its X and GFX Programs into the well-rounded strains we now see and catering for the photographer “in-the-know”, its heritage stretches a lot farther again. It truly began manufacturing cameras in 1948 and has produced medium format, 35mm, compact, and sub-miniature fashions all through its historical past.
Nevertheless, its core enterprise had all the time been movie which dates again to 1934; Fujifilm turned the most important movie producer in Japan earlier than squaring as much as Kodak because it fought for international market share. This led it right into a pure enterprise with Xerox on photocopying options, with the diversification making digital imaging and magnetic supplies an space of analysis and improvement focus together with a sideways step into medical imaging.
It’s subsequently not shocking that Fuji produced the primary end-to-end digital digital camera within the type of the Fujix DS-1P. This technological leap ahead oddly led to the demise of Fuji’s SLRs and, whereas it manufactured compacts in huge portions, it wasn’t in a position to transition to the DSLR. It as an alternative relied on its partnership with Nikon and used its digital camera our bodies. Consequently, Fuji by no means produced an in-house DSLR, and as an alternative moved straight to mirrorless with the X-series.
What this all hides (and is proven beneath) is that the movie enterprise reached its zenith in 2001, held sway till 2003, then fell off a cliff in order that by 2009 it had misplaced 90% of its market. For Kodak and Fuji, whose companies had been largely depending on this income, it was a systemic shock.
The architect of Fuji’s turnaround was Chairman and CEO Shigetaka Komori who carried out VISION 75, which restructured the corporate and targeted funding on potential development areas the place they’d experience. The well being sector was an obvious target that used its experience in imaging and industrial chemistry to focus on medical imaging and prescribed drugs.
The change was dramatic: Imaging Options accounted for 54% of income in 2001. That has dropped to a mere 13% as of 2021, whereas Healthcare now makes up 48%. The distinction is starker whenever you have a look at working earnings; 9.5% and 65% respectively. The cash is in healthcare.
The Digital Pivot
Fuji’s strategy to digital cameras makes extra sense towards this backdrop. The clear focus by way of to the early 2000s was on movie and whereas it had the digital applied sciences in-house, the true cash was being made promoting compact and bridge cameras. VISION 75 basically killed off movie manufacturing as a significant enterprise phase, together with the S Professional vary of Nikon bodied DSLRs, though it left the money cow that was compact cameras.
The query that vexed the corporate with a proud digital camera heritage was the way it ought to develop an interchangeable lens digital camera. The pregnant pause that VISION 75 created noticed Olympus and Panasonic market the mirrorless digital camera in 2009; two brief years later the world was launched to Fuji’s imaginative and prescient for a retro-style digital future: the X100.
This was well-received, with reward for the mix of retro seems to be, picture high quality, and measurement (a results of the small APS-C sensor). It’s arduous to know whether or not Fuji was testing the waters, whether or not an interchangeable lens digital camera was deliberate, or whether or not APS-C was a agency design alternative; both means, the discharge of the X-Pro1 in 2012 (and X-Trans sensor) modified the digital camera world. Fuji was again.
5 years later it once more stunned pundits with the discharge of the second-ever medium format mirrorless digital camera — the GFX-50S — with a comparatively modest sub-$10,000 worth. Fuji’s pitch is that full-frame is the worst of each worlds; if you need nice picture high quality in a svelte digital camera, go for the APS-C X-Collection. If you’re critical about picture high quality, the medium format GFX is the reply.
Vital numbers of photographers clearly agree with Fuji as, by 2019 it was ranked third in mirrorless sales, transport some 500,000 items. Clearly, it received’t be troubling the likes of Sony or Canon anytime quickly, however it’s out-selling each Olympus and Nikon.
The Movie Elephant
All of this hides the slightly giant movie elephant within the room and there are two key numbers to focus on right here. Firstly is that of the 13% of turnover from Imaging, 9% comes from movie (principally Instax, immediate photograph programs, and minilabs) with solely 4% coming from digital. Secondly, in pre-COVID 2019, Fuji bought 10 million Instax cameras. Sure, you learn that proper, Fuji bought extra immediate movie cameras in 2019 than the whole digital digital camera trade (excluding smartphones).
It’s price remembering that Instax’s success hasn’t been immediate: the Mini 10 arrived in 1998 and in 2002 Fuji bought a million cameras. By 2004, this imploded to simply 100,000 items because the digital pivot took maintain, nevertheless, Fuji’s revival noticed these numbers develop to five million items in 2016 and 10 million items in 2019. It is a “pile it excessive, promote it low cost” mentality (the cameras promote for round $100), however the revenue is made on the back-end movie gross sales.
The Way forward for Digital
Unusually then, the success of the Imaging Division is essentially due to movie. In truth, Fuji’s digital cameras may very well be making a internet loss with movie gross sales cross-subsidizing their improvement and manufacturing. Extra pertinently, Fuji has offered Nikon with a sage lesson in easy methods to do enterprise.
Its earnings collapsed with movie and the answer was to restructure and diversify into associated markets that had been each shopper and business-facing. That is the painful process that Nikon is now undertaking; Nikon ought to have recognized this single level of failure earlier and pivoted underneath much less worrying situations, a state of affairs that each Canon and Sony have prevented.
What’s necessary to recollect is that digital camera historical past is exclusive and it doesn’t repeat itself. Because the beginning of the Lumix G1 in 2009, the digital camera trade has taken 10 years to gestate into the mirrorless market we now see the place there’s a single route of journey. This chance received’t come up once more and early innovators have misplaced the initiative, ceding vital floor to Sony. Canon has bounded into the melee with full pressure, Nikon stumbling in behind, having misplaced momentum.
On this new world, Fuji has been plowing a gradual furrow, providing a singular imaginative and prescient for the long run that’s totally different from everybody else. And that imaginative and prescient gives a quick monitor to movie, alongside a alternative between APS-C and medium format.
Picture credit: Header picture by Ryan Mense for PetaPixel.