Canon Zhuhai thousand people factory ended, camera lost to mobile phone?

On January 12, an announcement of Canon Zhuhai Co., Ltd. (hereinafter referred to as Canon Zhuhai) caused an uproar. Due to the sharp contraction of the global camera market and the covid-19 pneumonia epidemic, this large factory with thousands of people announced its decision to terminate production.

On January 14, the reporter of daily economic news visited Canon Zhuhai factory and learned that the factory is on holiday. Although the employees have known that the factory will be closed, most of the employees are still waiting for the implementation of the severance compensation scheme. At the same time, the reporter also received a detailed response from Canon (China) on this matter. Canon (China) related sources told reporters that Zhuhai factory mainly produces small digital cameras. After closing some production lines this time, Zhuhai factory still has a few parts production lines in operation. The above-mentioned person also told reporters that Canon will still focus on SLR and micro single in the Chinese market in the future.

The reporter read Canon’s financial reports in recent 10 years and learned that in 2011, the office business with printer as the core has been the business pillar of the company. By 2020, Canon will reclassify its business. The printing business accounts for 57.1% of Canon’s total annual turnover, the imaging business accounts for only 17.1%, and the medical business income accounts for 13.8%.

manufacturer’s response: keep a few parts production lines

On January 14, a new cold air roared from north to south, and the weather in Zhuhai became gloomy. The canon factory located in Jinding Jinhuan East Road, Tangjiawan Town, Zhuhai, Guangdong Province is also lonely.

Although it was the noon off-duty period, the factory gate was also cold and quiet, and there was no excitement in the past. Looking in from the factory gate, employees can only be seen occasionally. In 2013, Canon moved its Zhuhai plant from Beiling to Jinding and spent 1.5 billion yuan to build a new plant covering an area of 200000 square meters here. At that time, the annual production capacity of digital cameras here reached 20 million. It was an important production base of Canon in China, with nearly 10000 employees.

On January 12 this year, the employees of Zhuhai Canon received a heavy notice: this large factory with a history of more than 30 years in Zhuhai will be closed. The reasons given by the company are: in recent years, the global camera market has shrunk sharply, and covid-19 pneumonia virus has been rampant for a long time. The company’s operation is unprecedented difficult, and the dilemma has not been reversed.

On January 14, the reporter of “daily economic news” met Canon employees who came out of the factory at the gate of the factory. He told reporters, “there is no one working inside. The rest are settling the wages of employees.” Subsequently, the reporter also tried to enter the plant to understand the situation, but was not allowed.

The reporter learned that as early as a week ago, the employees of Canon Zhuhai were informed of a holiday and the factory shut down. However, many employees did not go home for the new year, but chose to stay in the employee dormitory and wait for the company’s compensation scheme to be implemented. Most employees have no complaints about Zhuhai canon, but say that Canon has always been very good to employees. When asked about the shutdown of the factory, many employees could not hide their loss, but they were unwilling to disclose too much information to reporters.

In sharp contrast to the quiet factory, the staff dormitory area one road away is much more lively. After the news that Canon Zhuhai was going to close its factory, it attracted many “outsiders” to send recruitment leaflets. A canon employee told reporters that the factory shutdown is not without signs. After the outbreak of the epidemic, the output of Zhuhai Canon factory slowly decreased.

Public information shows that Canon Zhuhai Co., Ltd. was established in 1990 and began to produce cameras that year, gradually becoming an important production base of Canon’s global digital cameras. According to the annual environmental report disclosed over the years on Zhuhai Canon’s official website, by the end of 2012, Zhuhai Canon had more than 8000 employees. By the end of 2020, Canon Zhuhai had 1317 employees, with a total investment of US $220 million. In 2020, 12.29 million lenses, 1.029 million digital cameras and 94000 digital cameras will be actually produced. It can be seen that while the number of employees continues to decline, the number of lenses, digital cameras and digital cameras produced by Canon Zhuhai every year also decreases year after year.

A relevant person from Canon (China) responded to the reporter of the daily economic news that Canon really wants to consider closing some product lines of the Zhuhai factory. Zhuhai factory mainly produces small digital cameras and supplies them all over the world. After the shutdown, Zhuhai factory will still retain a small part of the parts production line. With the development of smart phones, the market scale of small digital cameras has been different from before. The impact of the epidemic and the shortage of chips also make the operation of Zhuhai factory unsustainable. With consumption upgrading and industrial upgrading, Canon needs to make adjustments according to market changes.

With regard to the compensation scheme for employees of Zhuhai factory, the above-mentioned person told reporters, “we will certainly determine the final scheme according to China’s labor law, taking into account the contribution of employees to the company and the needs of each employee.”

market reality: small digital camera market shrinking

Behind the closure of Zhuhai Canon factory is the shrinkage of the global digital camera market, especially the small digital camera market. The reporter of the daily economic news learned that the small digital camera, that is, the card machine we often call, is small in shape, has a relatively light body and ultra-thin and fashionable characteristics.

Some data point out that the card digital cameras produced by Zhuhai Canon factory once accounted for half of Canon’s global sales of card digital cameras.

“International digital camera giants mainly produce medium and low-end card machines in China.” Que Daohua, a professional photographer and senior media person, told the daily economic news, “the middle and low end used to be a huge market, because everyone had a photography dream. At that time, they also wanted to bring a camera when traveling, which led to the popularity of card machines. But mobile phones are so advanced, who still uses card machines?”

The reporter of the daily economic news noticed that mobile photography has gradually become the main competition field for mobile phone manufacturers to compete for users in recent years, which has brought substantial progress to mobile photography technology. With the advent of 5g era, mobile phone photography has reached a high level. From the “pixel only theory” of functional machines in the past to “computational photography” in the era of smart machines, 8K / 4K video recording, multi camera full on, dark light noise reduction and other advanced technologies emerge one after another. Oppo, vivo and Xiaomi also proposed to develop their own image chips. All these have had a great impact on the digital camera market of traditional optical imaging.

“Many professional photographers have taken pictures with mobile phones for a long time. In the early years, we liked to sweep the streets, walk around and take pictures, and we would also bring smaller machines, so I used several canon and Sony card machines at that time. Until the iPhone 4S appeared, there was no need to use a card machine. A mobile phone and a charging bank could do it.” Que Daohua said.

Que Daohua believes that if smart phones priced at more than two or three thousand yuan are taken well, the imaging effect is no different from that of low-end digital cameras, and the portability and intelligence are much higher than the latter.

Under the impact of smart phones, the shipment of digital cameras fell sharply. According to the statistics of CIPA (Japan camera imaging machine industry association), the global shipment of digital cameras in 2020 was only 8.886 million units, lower than the shipment of 10.342 million units in 2000.

This phenomenon is also reflected in the financial report of camera giant canon. Since 2017, the turnover of the company’s image system products has declined year by year. From 2017 to 2019, the turnover of image system products with cameras, lenses and image equipment as the core was 1099.13 billion yen, 970.44 billion yen and 807.41 billion yen respectively (about 61.11 billion yuan, 53.96 billion yuan and 44.89 billion yuan respectively). By 2020, the revenue of the company’s imaging business fell to 541.31 billion yen (about 30.1 billion yuan).

enterprise choice: SLR camera or micro single

Today, under the impact of smart phones, mobile phones can meet the primary photography needs. For more professional scenes, digital cameras still have a certain user base, but the technology is undergoing revolutionary changes. Behind this is also a war without gunsmoke. Canon also paid a certain price for not following up in time.

“There is no reflector in the micro single camera, and the whole camera can be made very small. Sony pioneered the micro single, and began to occupy the canon market. On the one hand, the price is relatively cheap, on the other hand, the pixels are very large, which soon exceeded Canon’s parameters and has a more competitive advantage in all aspects.” Xu Weiming, a veteran photographer, told reporters, “at the same time, physically speaking, after removing the reflector, the flange distance of the camera (referring to the distance between the bayonet and the focal plane) becomes shorter, so the lens and bayonet size can be made larger. A larger bayonet size means that it has a greater amount of light input, which is conducive to the optimization of imaging quality.”

Compared with Sony, Canon’s response to the micro single camera market seems to be a few shots slower. Canon’s first micro single camera EOS r was not officially released until September 2018. Although this is the pioneering work of Canon’s full-length and specialized micro, it is five years later than Sony. What has Canon been doing in the past five years?

Xu Weiming said: “at that time, canon was already very strong in the SLR camera market and had the largest user group in the world. Basically, many photographers used the SLR camera with Canon EF bayonet. Due to the supporting body, lens and accessories, users switched from SLR to micro single (RF bayonet) , the cost of reconfiguring lens and other equipment is relatively high, which prevents users from changing camera type and brand. I think Canon may have seen such user psychology at that time, so it was a little confident. “

In fact, the market potential constantly stimulated by the micro single market has begun to seize SLR users, so that Canon can realize the word “true fragrance”. According to CIPA data statistics, the global digital camera market sales volume from January to October 2021 was 6.9588 million units, which was basically the same as the total sales volume of 6.9096 million units from January to October 2020. Among them, the sales volume of SLR cameras was 1.8425 million, while the sales volume of micro single cameras was 2.6289 million, 42.68% higher than that of SLR cameras.

Today, Canon also continues to launch new products in the micro single market, which means “competing with Sony”, and has gradually reduced its energy for the SLR business. In December 2021, in an interview with Yomiuri Shimbun, the chairman of the board of directors and CEO of Canon Co., Ltd., Fujifu Yushou said that the development and production of Canon’s flagship SLR camera may be completed “within a few years”. If this plan is implemented, the eos-1d x Mark III will become Canon’s last flagship SLR camera. However, he also stressed that only flagship SLR cameras are affected. At present, there is no plan to terminate the development and production of entry-level and mid-range SLR cameras, because there is still stable demand in the market.

On January 14, Fujio Mitarai, President of Canon, also confirmed that Canon would continue to produce and sell SLR digital cameras, but would not develop a new flagship of SLR. The shutdown date of the current SLR flagship eos-1d x Mark III has not been determined, depending on market demand.

Junxing Ishii, executive vice president of Canon China, once pointed out in his new year’s speech in 2022: for Canon, SLR and micro single are equally important in the Chinese market. The road of “adhering to both SLR and micro SLR” will not be shaken.

Canon (China) related people said that now, Canon’s camera research and development has invested a lot of efforts in the micro single field and made great efforts to expand the RF system, not only the camera body, but also the lens group. However, there are both SLR and micro single users in the Chinese market. Therefore, both SLR and micro single are very important for Canon, and we will pay equal attention to the sales of these two products. In the future, Canon will continue to listen to the voice of Chinese users and contribute to the popularization of image culture.

However, it is undeniable that the glorious days of SLR cameras may be gone forever.

Although it started with a camera and experienced ups and downs in the camera market, Canon is not only a company that only produces cameras. According to the financial report, Canon’s image business sales in 2020 were 541.31 billion yen (about 30.1 billion yuan), accounting for 17.1%, while the largest proportion was the printing business, accounting for 57.1%.

In fact, Canon can be regarded as the founder of the era of ordinary paper copying. In 1967, Canon group put forward the slogan of “right hand camera, left hand business machine” to promote diversification on the occasion of its establishment for 30 years. In 1968, Canon launched the original electronic photography method “Canon NP system” to develop the ordinary paper copier market. Canon launched Japan’s first plain paper copier “np-1100” in 1970 and the world’s first bubble inkjet printer “BJ-80” in 1985.

Current situation of the company: office printers carry the banner of revenue

In the two decades from 1970 to 1990, Canon’s new copiers and printers appeared frequently. It was also during this period that Canon established its giant position in the global printer market. According to the Q3 report of global printer market in 2021 released by IDC, the top three brands of Q3 global shipments are HP, Epson and canon, of which Canon’s shipments are about 3.39 million, accounting for 16.2%. HP and Epson accounted for 40.9% and 20% respectively.

The reporter of daily economic news read Canon’s financial report for nearly 10 years and learned that as early as 2011, Canon’s revenue from “office products” with printers as the core accounted for 53.9% of the company’s total revenue. It took up the banner of the company’s main revenue source early, and the revenue proportion of “image system products” decreased to 36.9%.

Nine years later, in 2019, the revenue of “image system products” has been “reduced” by nearly 40% compared with 2011, leaving 807.414 billion yen (about 44.89 billion yuan), and the proportion of turnover has further decreased to about 22.5%. In 2020, the printing business accounted for 57.1% of the company’s total annual turnover, and the imaging business accounted for only 17.1%.

Time evolution, industry ups and downs. Ten years later, Canon’s printing business and imaging business are not in the same order of magnitude.

However, it should be noted that Canon’s office product volume has not made much breakthrough in the past 10 years. In 2011, Canon’s revenue of “office supplies” was 1917.94 billion yen (about 106.64 billion yuan). By 2015, the revenue of “office supplies” reached a peak of 218.82 billion yen (about 117.36 billion yuan), and then turned down. In 2019 before the outbreak of the epidemic, Canon’s revenue from “office supplies” was 175.21 billion yen (about 97.42 billion yuan). In 2020, the company’s printing business turnover was 1804.43 billion yen (about 100.33 billion yuan).

On the other hand, Canon’s total turnover was 3557.43 billion yen (about 1977.9 billion yuan) in 2011 and 3593.3 billion yen (about 1997.9 billion yuan) in 2019. Affected by the epidemic in 2020, the total turnover decreased to 3160.24 billion yen (about 175.71 billion yuan). The “consumption” of imaging business is made up by the “growth” of industrial equipment and other medical business.

In Canon’s globalization strategy, China is one of the most important battlefields. Xiushu Ozawa, chairman and CEO of Canon (China), once made it clear in Canon (China) 2020 ~ 2021 corporate social responsibility report that Canon is taking office, printing, security and medical care as a new engine for business development in the face of the Chinese market.

development direction: medical imaging has become the focus

It is understood that in fiscal year 2021, Canon (China) will be independent from the original Canon Asia Group and report directly to the headquarters. At the beginning of November last year, during the fourth China International Fair, Hideki Ozawa was interviewed by reporters. He stressed, “Without the support of China’s growth, it may be difficult for an enterprise to have a future. Because of this, China’s business is the top priority for Canon. We will strengthen our efforts to adapt to China’s changes, take the initiative to cater to such changes, and increase our investment in China in all aspects, including investment.”

According to the financial report, Canon has four business segments: the “printing business” with commercial printing as the core, the “imaging business” with cameras as the main, the “medical business” with X-ray and ultrasonic diagnostic equipment as the main, and the “industry and other businesses” represented by semiconductor lithography machines.

In recent years, medical imaging has become the focus of canon. At the 4th China International Import Expo held in November last year, Canon launched the theme of “laughing for great health”, focusing on medical related imaging equipment. In an exclusive interview with surging news, Xiushu Ozawa said that Canon hopes to take advantage of the rare opportunity of this exhibition to comprehensively display Canon’s strength and achievements in the field of medical equipment.

In fact, Canon has “fate” with medical devices since its birth, which has something to do with its founder yushouxiyi being a doctor. In 1940, Canon developed Japan’s first X-ray indirect photography device. In 1998, Canon sold the world’s first X-ray digital imaging device (DR) “cxdi-11”.

Perhaps it is because the main energy in the early stage was in the field of cameras and office printers, and the income of medical imaging system has not accounted for a large proportion in canon. In Canon’s annual reports over the years, the turnover of “medical system” has been listed separately since 2017. In 2017, Canon’s medical system revenue accounted for 10.7% of the company’s total revenue.

In 2016, Canon announced that it would acquire Toshiba’s medical equipment department for a total price of 665.5 billion yen (about US $5.9 billion). This huge acquisition is regarded by the outside world as an important springboard for Canon’s business transformation. After completing the merger and acquisition of Toshiba Medical, Canon has more confidence to add weight to the global medical and health market.

In 2020, Canon group will promote the reorganization of medical business worldwide to further strengthen and expand medical business and improve synergy. Canon’s ophthalmic equipment business in China was reorganized from Canon (China) Co., Ltd. to Canon medical system (China) Co., Ltd. in May 2020.

In an interview with surging news, Xiushu Ozawa also mentioned that in recent years, under the guidance of national policies such as “healthy China 2030”, China has put the development of health industry in the first strategic position of priority development, which has brought huge market growth opportunities to the medical device market. “This major opportunity is very important for Canon’s medical business. Canon is also making due contributions to the development of China’s big health industry by providing more excellent technologies, products and services.”

“The office sector is Canon’s largest business sector, and medical imaging is a better growing sector among Canon’s four sectors, which is indeed one of the company’s business development priorities in the future.” On the afternoon of January 14, a relevant person from Canon (China) said in an interview with the daily economic news.

The reporter learned that from 2017 to 2019, the turnover of Canon medical system was 436.19 billion yen, 437.58 billion yen and 438.53 billion yen respectively (about 24.25 billion yuan, 24.33 billion yuan and 24.38 billion yuan respectively), and the income increased year by year. However, in 2020, Canon’s “medical business” revenue was 436.07 billion yen (about 24.25 billion yuan), a year-on-year decline. In 2020, the proportion of medical business income will rise to 13.8%.

A doctor in the equipment department of public hospitals in China’s third tier cities told reporters, “Whether it’s large radiation or ultrasound (diagnostic equipment) , Canon can not reach the first echelon. Ge and Philips are the main radiation equipment, and Ge and Mindray are the main ultrasonic equipment. Most of CT and MR equipment are Siemens, Philips and Ge. Most of the peers in the equipment department do not know much about canon, because the market share of Siemens, Philips and GM is too high. However, Toshiba also has a considerable share in medical equipment. “

- Advertisment -