The Game of Chess !

Our lead article, comparing Smartphones with compact cameras, predictably led to a number of responses, ranging from the angry to the bizarre. One reader blamed all the Japanese camera manufacturers for the problems that they are facing from Smartphones. He claimed that in their anxiety to cut costs and increase profits, Japanese manufacturers gave technology relating to optics and exposure systems to companies in Taiwan, which in turn promptly became original equipment suppliers to the Smartphone companies. Interestingly, none of the top Smartphone companies – Samsung, Apple and Nokia – hail from Japan, and the Japanese have certainly been caught napping on this front.

We have been noticing for some years that an increasing number of compact cameras were being made either in Taiwan or China. Our readers will remember how Yashica’s best selling camera in India – the Electro 35 – was driven to the ground by surreptitious supplies from their Chinese partner. The smarter Japanese companies have opened their own subsidiaries so as to control all operations. However, most of the others rely on a number of Taiwanese original equipment manufacturers.

Just who are these Taiwanese companies? The first name that comes to mind is FOXCONN Electronics (which years ago bought over Premier Cameras). FOXCONN runs a number of factories and has been accused in the past of over-working its workers. FOXCONN is also the biggest supplier to Apple. Other Taiwanese companies include Ability Enterprises, Altek and Asia Opticals.

Interestingly, Nikon was the biggest client of the Taiwanese camera companies, and accounted for over 40% of Taiwanese camera shipments. Next in line was Fujifilm with over 16% (mainly from Altek). Sony was third with over 13%, followed by Olympus at 7% and Casio at 5%. Brand names like Canon and Panasonic did not appear prominently in this list.

The collapse in the sale of low-priced compact cameras has affected the Taiwanese companies significantly. According to research reports, the year-to-year drop is more than 40%. Shrewdly, these companies are now moving up the ladder and concentrating on 16 and 20MP models.

On a parallel level, a ‘ war’ seems to be in the offing between Samsung and the Taiwanese suppliers. It is believed that Samsung (as the world’s top Smartphone company) would like to control supply lines of Smartphone components, including chips. According to TheNewYorkTimes, this battle between Samsung and the Taiwanese companies has only just begun.

Meanwhile, Taiwan-based lens maker, Genius Electronic Optical, has announced the setting up of a new lens factory to cater to orders from Apple and others. Ouch!