Lens into the future
Following the launch of the highly-anticipated Leica M10 in Wetzlar, Germany, Elite exclusively chats with their CEO, Oliver Kaltner, about camera trends and how to thrive in an increasingly digital world
What are some trends in the camera industry now?
If we are looking into the next three to five years, what we see is that entry models are fading out. We see that the compact systems are fading out. That means we see a tremendous change in the industry anyhow. As a small, premium, niche manufacturer like Leica, we need to have a clear answer and vision right now, because when we are going to work on our product, it is something that will have impact on the next five years. We know that the system camera market is increasing; we know that the other segments are declining and that means we are going into the core centre of our portfolio in system cameras.
How do you intend to maintain Leica’s prestige and history against its commercial side?
I strongly believe that across the industries, as a manufacturer, you have to make a very conscious decision nowadays in commercial business. You’re either entry or premium. Anything in between is going to get killed and you see that in fashion, in mobile industries, in the camera industry. Fortunately, very smart people have put Leica into the premium niche for the past 103 years and thankfully, I don’t have to go after market share. 11% of our total net sales is spent on research and development while people usually go into an investment of 5-6%.
As a CEO, what are some of the things you say no to?
Anything that has no specific USP for Leica. When I’m sitting down with my product manager people, I tend to say no eight times simply to limit it. Leica’s DNA is optical engineering, so we always need to have products that are really state-of-the-art when it comes to the optical engineering part. We’d rather say no to some business opportunities but yes to the relevance of Leica products. I don’t care about market share and volume at all. We’re not in the price-erosion or three-month cycle business. What I do care about is that whatever product we are going to launch today must have a relevance point in the next 20-30 years. Most of the products that we’re still launching, you will see in the second-hand market, and you might see in auctions in 20 years. It’s a completely different perspective we’re talking about here on developing and launching products.
Where is your smartphone photography heading, with regards to your Huawei collaboration?
It was kind of an answer for us to really go into that type of customer segment, which is very attractive. For the first time in the history of human beings, people raised up with photography are not being trained in photography. It’s intuitive, excess photography via smartphones and smartphones lead the industry in a certain way. The tech collaboration is really paying off for both parties — only after six months, we both decided to invest in an innovation lab. This is amazing and I can tell you we didn’t really have so much time to come up with a fantastic camera model in the P9, but look at the reaction to the P9 worldwide. Now you see the reaction on the Mate 9. It’s becoming the best product this year and that is for two reasons. One is we both share the philosophy of photography and because we do, from there we take it to a product. What I like about Huawei is that their engineering capability is really high but they’re not thinking from hardware, they’re thinking from usability and network capabilities. Then they turn it into a hardware solution. This is exactly where I’m coming from as well — you should have a very strong point of view of photography first before you start engineering. I’m convinced that they will become the next number one in the market.
Which product line will you focus on in the next 10 years and what do you think is the rising star?
If I would put a personal bet on the most important future lines that we currently have in our portfolio, it’s the Leica TL. It’s an upcoming shining star because we’re developing it further and further to that camera that will be turned into a mobile device. A camera should become a mobile device. If you ask consumers their top three mobile devices, it’s smartphones, ultrabooks and tablets. I would like the answer instead to be smartphones, tablets, cameras. If we are making a business decision on our product lines, it’s never for three years — it’s always for a decade at least.
What shifts should consumers expect to see from the photography industry in the near future?
Do you remember that song from the 70s, Video
Killed The Radio Star? Now people say video will kill still, but that’s not true. Users are not interested in single solutions or experiences. They would like to have the freedom and variety of any type of experience. It’s fantastic what we see from our young photographers — how they mix video and stills. It’s our job from a pure technology perspective to make products that give you the full freedom at any second or environment for you to decide how you combine stills with video and audio. You decide, we only have to give you the right instrument for that.
With your previous experience in tech firms like Microsoft and Sony, what are some factors that are necessary to ensure innovation?
The real innovation is at the start-up and smaller company level. They avoid becoming corporate and building up hierarchies. Small companies are really open to collaborations with other companies because they believe in the open share model. This is where the real innovation is and this is also where the best talent goes. I’m always worried whether we are attractive enough as a company to attract young talent. We have some of the best optical engineering guys in the world and also, if you aren’t making any mistakes, you aren’t making anything new. That’s why we’re building up a satellite structure for the first time in a 103 years — we can’t expect the talent to come to Wetzlar and we now have an in-house design team located in Munich. If you aren’t sharing, you aren’t participating in the intelligence of other people. If you don’t have access to the intelligence of other people, you limit yourself. That means we need to open it up.
USER S ARE NO T INTE REST ED IN SINGLE SOLU TION S OR EXPE RIEN CES