It is to cut off the digital camera production line, not to move the line
Wen | Liu Shuqi
Edited | Sherry
Another veteran camera company factory was announced in China.
On January 12, Canon Zhuhai Co., Ltd. (hereinafter referred to as "Canon Zhuhai") announced that due to the sharp shrinking of the global camera market and the impact of the epidemic, the company's operations are facing unprecedented difficulties. The headquarters is adjusting the overall operating structure of the group and has decided to terminate the company's production.
Canon Zhuhai said that it will negotiate with the union and employee representatives to terminate the preferential treatment plan for the termination of the labor contract, strive to provide compensation plans and humane care that exceed the statutory standards, and will officially announce the plan on the day of the consultation. In addition, Canon Zhuhai will set up a special organization to solve the problem of job placement of employees, provide quality jobs in the same region, and organize preparations for the honor graduation ceremony.
Founded in 1990, Canon Zhuhai is responsible for the production of cameras in China, including lenses, digital cameras and digital video cameras. According to the company's annual report released last year, Canon has five manufacturing companies in China, located in Dalian, Suzhou, Zhongshan, Zhuhai and Taiwan. In Chinese mainland, Zhuhai is the only factory that produces cameras, while other factories mainly produce printers, copiers, composite machines, etc.
Caijing reporter learned from a Canon Zhuhai supplier that Canon Zhuhai announced the closure, which not only means that Canon's camera production line will be withdrawn from Chinese mainland, but also means that Canon's digital camera production will shrink significantly. She said Canon has no plans to shift the production line of low-end digital cameras to Southeast Asia, "it is to cut the line, not to move the line." The Caijing reporter called Canon Zhuhai, but no one responded.
The closure of Canon's Zhuhai plant is a microcosm of the end of the digital camera era. According to techno Systems Research, a third-party research institute, the global supply of digital cameras in 2020 was only 8.85 million units, a 40% decrease from the previous year. Another digital camera giant announced in 2017 that it was shutting down its camera production subsidiary, Nikon Optical Instruments, based in Wuxi, Jiangsu Province, whose main product at the time was digital cameras.
Canon, as the hegemon of the digital camera industry, occupies nearly half of the market share. But the overlord is also leaving at this time.
The above-mentioned supplier told the "Finance" reporter that as early as 2016, Canon Zhuhai has obviously shown a downward trend. Her most intuitive feeling as a supplier is that the order amount at the peak was more than 1 million yuan, and then gradually dropped to 300,000 yuan, and finally only about 100,000 yuan was left. The iteration of innovation on the production line has also been very slow, in the past it was basically two generations of products a year, and then evolved into a generation a year and a generation of two years.
Canon Zhuhai tried to apply to the Japanese headquarters to open a more technical micro-single and SLR production line, but was rejected, and the main source of such products is still in Japan. Canon Zhuhai eventually only undertook a small number of micro-single camera lenses, but it was difficult to turn the tide.
After 2019, canon Zhuhai's then-factory director had strictly grasped procurement and controlled costs, but the suppliers who had previously regarded Canon as fragrant and delicious were no longer willing to pay for it, and the powerful factories transferred to other businesses, and the surrounding small factories chose to shut down.
Due to the business downturn, many employees of Canon Zhuhai have left in 2020, and the incumbent employees have also stopped working after New Year's Day in 2022 and are expected to be dismissed before the Spring Festival.
Thirty years east of the river, thirty years west of the river. In the first 20 years of Canon's entry into China, it was still a foreign-funded company. The supplier recalled that in order to compete for a Canon order, the supplier needed to do everything in its power. Around Canon's Zhuhai factory, Japanese language classes were once popular because learning Japanese well was an advantage for promotion and salary increases within the company.
However, the vigorous development of the smartphone industry after 2016 has severely frustrated the digital camera industry represented by Canon. According to the financial report, Canon's net sales have declined for three consecutive years, from 4 trillion yen in 2017 to 3.2 trillion yen in 2020, and operating profit has also experienced two consecutive years of decline, from 342.5 billion yen in 2018 to 110.5 billion yen in 2020.
This point in time coincides with the spurt of growth of China's smartphone industry. In 2016, Huawei, ZTE, Lenovo, Coolpad, OPPO, vivo, Xiaomi, LeTV and many other mobile phone manufacturers are in full swing, the mobile phone imaging system is rapidly iterating, and the image needs of ordinary users can be met by a lightweight, low-cost mobile phone.
In recent years, mobile phone manufacturers have become more and more encroaching on the living space of camera manufacturers, and some mobile phone manufacturers have even proposed to challenge the photographic effect of professional SLR cameras. Limited by the size of the mobile phone sensor, the image effect of the mobile phone was once difficult to match the SLR. Jiang Bo, senior director of OPPO chip products, said in an interview with Caijing that this requires mobile phones to have higher computing image capabilities and use AI algorithms to surpass the image quality of SLR devices.
Behind this is the dispute between optical imaging and computational imaging. The above-mentioned suppliers believe that although traditional camera companies can transform computing images, as a large enterprise with a long history, it is not easy to change the track.
Nowadays, the image function has become the main arena of competition for mobile phone manufacturers, OPPO, vivo, xiaomi have proposed to develop their own image chips, with AI algorithms to challenge the optical imaging effect of SLR.
A head mobile phone camera business person commented to the "Finance" reporter that under the impact of smart phones, the survival soil of camera manufacturers will be more and more limited, and after the decline of digital cameras, mirrorless cameras (that is, micro single cameras) and some SLR are the last positions of camera manufacturers.
Canon Chairman and CEO Fujio Mitsuru said in an interview with Japanese media in 2021 that Canon will end the development and production of flagship digital SLR cameras, and will only produce mirrorless cameras and low-end SLR cameras in the future. According to the "Finance" reporter, the EF lens mainly used for SLR cameras has been discontinued in a large area, and the RF lens suitable for mirrorless cameras will become the main development direction of Canon.
At the same time as the camera business declined, Canon is also actively diversifying its business, and has achieved certain results now. By the end of 2020, the printer business contributed 1.8 trillion yen in revenue to Canon, accounting for 57%, while the imaging business accounted for only 17%, in addition, the medical business and industrial and other businesses also accounted for 14% and 15% of revenue, respectively.
The author is a reporter for Caijing
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