Emerging Chinese and South Korean Forces Making Great Strides! The Identity of the Disruptor of Canon's Highly Profitable Business Model

2019.10.18 06:00

Not only Canon, but interchangeable lens camera manufacturers have made a profit by making the mount, the part that connects the camera body to the lens, a standard that is incompatible with other manufacturers' products, thereby locking customers into their own products and creating a barrier to switching to other manufacturers' products.

In particular, lenses are said to be more profitable than camera bodies, and camera manufacturers have made high profits by offering a lineup of high-performance lenses.

I started using Canon's first full-fledged auto-focus SLR camera, the EOS650, in 1987. The first two lenses I had lined up were the EF35-70mmF3.5-4.5 standard zoom lens and the EF70-210mmF4 telephoto zoom lens.

Today, many compact digital cameras have a telephoto side that exceeds 200mm in 35mm full-size equivalent, but when I started using the "EOS650," there were no film-type compact cameras that could use such a telephoto lens, so I was very happy to be able to use a telephoto zoom lens in grade 5. I was really happy to be able to use a telephoto zoom lens at the age of 5.

In addition to standard lenses, Canon has "L (series) lenses," which are high-end lenses. They are marked by a red bowl. These lenses have been developed by Canon using the best technology of the time for professionals and high-amateurs, and have gained tremendous support from those who are picky about the descriptive performance of their lenses. Of course, this L-lens is priced considerably higher than standard lenses and has been a pillar of Canon's high profitability.

As I wrote in this article, the first L-lens I used was the EF28-80mmF2.8-4L USM, which I received when I was in the third grade of junior high school for winning a monitor giveaway from a camera magazine.

The USM (Ultrasonic Motor) was the world's first smooth and fast moving motor commercialized by Canon in 1987. It was clear that Canon had the foresight of its engineer Hajime Mitarai, who was still alive, and other companies would later replace their lens drive motors with USM motors much later. Today, USMs are used in inexpensive lenses, but in the early 1990s, USMs were used only in L lenses.

For Canon's SLR cameras, it has long been the norm to use Canon's genuine L lenses when seeking the best descriptive performance. However, there is now a major wave of change in this structure that has supported Canon's high profitability.

This is the rapid rise of third-party lenses, which are now being produced by companies specializing in lenses (or nearly so). When I first started using SLR cameras, I had a strong impression that third-party lenses were "cheap and bad. Certainly, they were cheaper than genuine lenses, but their performance was insufficient for those who demanded the best descriptive performance. Today, however, the situation is very different.

Koshina, an optical equipment manufacturer based in Nakano City, Nagano Prefecture, has formed a partnership with Carl Zeiss, a high-end German optical equipment manufacturer, to manufacture and sell interchangeable lenses for SLR cameras under the same brand. One example is the "Otus" lens. This lens can be used with Canon and Nikon SLR cameras (of course, it can also be used with mirrorless SLR cameras via a mount adapter). The price is higher than that of a genuine Canon L-lens with equivalent specifications, but the descriptive performance is far superior to the L-lens, making it the ultimate lens.

Although the company does not disclose detailed business conditions because it is not publicly traded, it produces small quantities of lenses for a segment of the market that demands the highest standard of lenses, without unnecessarily increasing the size of the company. It is not surprising that its operating profit margin is higher than that of a single-lens camera manufacturer like Canon (Canon's consolidated operating profit margin for FY12/08 was about 8.67%).

Another Kawasaki-based optical equipment manufacturer, Sigma, has also launched a series of high-performance lenses. In particular, the descriptive performance of the large-aperture "DG" series lens group with a maximum aperture of f/1.4 is tremendous, and many of them completely surpass Canon's genuine L lenses.

In addition, the "LAOWA" brand of lenses manufactured and marketed by Venus Optics, a newly emerging Chinese lens manufacturer, has launched a series of lenses with unique concepts that are not offered by hard-headed optical equipment manufacturers, and they have been well received. President Li Dayong says, "After graduating from Beijing University of Science and Technology, I worked for 20 years in optical design at a major Japanese optical manufacturer. I do not yet own a "LAOWA" lens, but I would like to buy and use one if I have the chance.

Also interesting are the lenses from another Chinese lens manufacturer (headquartered in Shenzhen), 7Artisans, which now mostly markets lenses for Leica rangefinder cameras, but has also released unique lenses for single-lens reflex cameras. Lenses from Shenyang-based optical equipment manufacturer Zhongichi Optical also have many interesting products.

The lenses of the Korean optical equipment manufacturer SAMYANG are also interesting and make us want to use them.

Thus, although not limited to Canon, the business model of Japanese camera makers to generate high profits from genuine high-priced lenses is beginning to crumble, and emerging powers in China and South Korea are making remarkable strides.

There are many uncertainties as to how the major Japanese camera manufacturers will secure profits in the future, so we will continue to monitor the camera market closely.

first appearance : AGORA