Change or perish

OPTICS and imaging giant Nikon recently announced that it would close its subsidiary Nikon Imaging China Co as part of its restructuring, which began in November last year to cope with the shrinking demand for compact digital cameras.

“In recent years, however, due to the rise of smartphones, the compact digital camera market has been shrinking rapidly, leading to a significant decrease in the operating rate at the NIC and creating a difficult business environment,” Nikon said.

Established in Wuxi, Jiangsu province, in July 2002, the Nikon subsidiary has been making compact digital cameras, lenses and other components. Since China is a large market for cameras, NIC’s sales subsidiary in Shanghai will continue its operations – so will Nikon’s manufacturing and sales subsidiaries in China.

Nikon digital cameras were once favoured by professional photographers and laypersons alike. A Nikon camera used to be regarded as a symbol of the user’s social and financial status, and it was the top choice of some professional photographers. It is sad therefore to see Nikon struggling to survive due to a sharp decline in its market share within a few years.

Some attribute Nikon’s predicament to smartphones, and Nikon itself thinks so. The popularity of smartphones is indeed one of the major causes of the dilemma facing digital camera makers today, similar to what traditional camera makers did when digital cameras became popular. But judging from the actual conditions, the popularity of smartphones is not the main reason for the sharp decline in the sales of digital cameras and their shrinking market share. Instead, the main reason is the structural reform in global manufacturing.

The global financial crisis exposed not only the bubbles in global financing and other areas, but also issues such as excessively fast development of the virtual sector, squeezing of manufacturing, deteriorating global supply-demand relationship, and low-quality and inefficient supply.