How long should a market leader let a potentially disruptive innovation go before reacting? Amateur photog Aaron in for Adam today, contemplating the fate of camera titans Nikon and Canon.
I got my first Canon camera, a no-frills film model known as the AT-1, as a gift for my bar mitzvah many years ago, but the company’s major market has always been professional photographers who spend thousands of dollars on the hefty bodies and gigantic lenses that bring in the big bucks. Nikon was the Pepsi to Canon’s Coke, or maybe the other way around, but the two companies had a lock on the high-end market of single-lens reflex, or SLR, cameras for decades.
In Harvard professor Clayton Christensen’s well-trodden disruption theory, as a market leader continues to improve its product, it goes beyond meeting the needs of what some customers actually want. New entrants with a new technology arrive, usually at a lower price and with fewer capabilities, aiming to meet the need of those overlooked customers. The incumbents, satisfied that their advantage in quality is what matters most “tend not to respond vigorously,” Christensen wrote in a 2015 article explaining and defending his theory (which has come in for some legitimate criticism over the years).
Even when the camera market went digital, the advantages of owning a Canon or Nikon remained, as new digital SLR models were compatible with lenses from the prior analog film models. At the same time, the rise of smartphones has nearly destroyed the market for pocket-size consumers cameras. So starting almost exactly 10 years ago, some competitors decided to try a new tactic to compete.
Instead of selling their own SLRs, which use a mirror and prism mechanism to allow a scene to be viewed by the photographer and recorded on film, Panasonic, Olympus, and others started selling smaller cameras that relied just on digital sensors. Without the mirror and prism contraption, these “mirrorless” cameras could be much smaller and lighter than traditional SLRs. They still came with interchangeable lenses, but the picture quality couldn’t match the SLRs. Prices were much lower, however. Soon, Sony, Samsung and Fujifilm were making even better mirrorless cameras.
Canon and Nikon largely ignored the trend. They were still making hay with their gigantic SLR models, adding ever more sensitive sensors to capture even more pixels. But as sales of mirrorless cameras increased, first Nikon and eventually Canon introduced their own models, to mainly mediocre reviews. The market leaders appeared not to want to tempt any of their pro audience away from buying higher-priced SLRs.
Just as Christensen’s predicted, the cheaper technology improved and lately Sony, Fuji, and Olympus have been tempting a growing number of “real” photographers to defect. In Japan last year, sales of SLR models dropped 10% and mirrorless sales increased 29%. Now Canon and Nikon are waking up to the threat and planning serious, professional-grade mirrorless models. A top Canon exec told the Nikkei Asian Review a few weeks ago that the company must “actively roll out products for a growth market even if there is some cannibalization.” The new models should arrive in the second half of this year, but the question now is whether they waited too long.