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Camera Companies Need to Be Willing to Cannibalize Themselves

Kodak’s fall from grace is an interesting case study that modern day companies can learn from. Even though the world’s first digital camera was invented by one of its engineers, the company was unwilling to cannibalize its film business that, at the time, was making money hand over fist. By the time digital cameras started catching on, Kodak had missed the boat.

On the contrary, Apple is a company that finds itself in a similar position of strength, but one that appears to be keen on not making the same mistake as Kodak. Even while its iPods were selling like hotcakes, the company was willing to cannibalize its sales by releasing the iPhone.

Apple then went on to launch the iPad, which has cannibalized Mac sales but has transformed the landscape of the industry.

Back on the camera industry side of things, Sony has also been causing quite a stir as of late in the photo world by releasing innovative technologies (e.g. pellicle mirror) and jumping into new markets early (e.g. mirrorless). Canon and Nikon, on the other hand, have been playing relatively safe. For example, even though Nikon jumped into the mirrorless camera game, the small sensors in the V1 and J1 indicate that the company isn’t willing to let its mirrorless cameras lure potential DSLR customers.

This has allowed Sony to eat into Canon and Nikon’s camera sale market shares. As a result, Sony’s CEO Howard Stringer was recently named “Person of the Year” by the PhotoImaging Manufacturers and Distributors Association.

Learning from these examples, it appears that the recipe for long-term success is to aggressively scout out new technologies, accurately gauge what consumers desire, and be willing to cannibalize yourself in meeting that demand. Failing to do so may put you at risk for “pulling a Kodak moment.”


Update: Here’s a terrific quote by Steve Jobs found in Walter Isaacson’s recent biography: “If you don’t cannibalize yourself, someone else will.”


Image credit: Cannibal? by chris runoff


 
  • http://twitter.com/Devereauxprints Ed Devereaux

    Poor leadership feels comfortable with the status quo. Real leaders take calculated risks. Canon is on the right track by the release of the C300. They are eating into their 7D and T3i market with this release but with the use of the EF lenses strengthen that portion of the business. 

  • Anonymous

    Don’t worry when Sony feels they not making enough from it’s camera business, they screw it up. They always have when it comes to consumer electronics, digital rights CD’s, mini disc, their online service for Playstation.  

  • Jason Tan

    Isn’t the Pellicle Mirror an innovation by Canon during the late ’80s or early ’90s? The Canon EOS RT?

  • Rakaryan

    btw..Pellicle Mirror is innovation by Canon..

  • Anonymous

    Are you kidding? C300 is expected to come with a pricetag near $20k. What exactly is this canibalizing? The only risk they’re taking is being easily taken out by Red.

  • http://www.facebook.com/profile.php?id=100000008515565 Johann Garces

    Yeah,  The only obvious advantages I see right now are portability and amazing low light.

  • Mark French

    That’s pretty much the Sigmoid growth curve. I’ve been taught about that in business classes, leadership classes and other miscellaneous training courses. For some reason not a lot of companies understand it in a practical sense. 
    The Nikon V1 was a huge disappointment because they essentially took a point and shoot sensor and threw several lenses at it. They had an opportunity to enter the market strong with the amazing sensors they have in the D3100 and the D5100 which would have blown all the m4/3 cameras out of the water overnight. It was really sad to me. I’d also love to see something that can rival Leica’s M8 or M9 cameras with a full frame sensor but with the brilliant Nikon technology. 
    Currently I’m doing more video work and see large increases in that respect. The C300 has reinforced Canon’s dedication to the DSMC aspect of things. I am waiting to see what Nikon does with the D800 to know whether I’ve got to switch to Canon. So far Nikon has turned up its nose at decent video codecs and frame rates. I hope the C300 is a wakeup call to Nikon. 

  • Mark French

    I just want to see Nikon commit to video in a definite way. 1080p, cranking up to 60fps, 35-50mbps QT codec, 10bit uncompressed HD-SDI and some cinema primes. If they can do then they’d be set to retain their market and perhaps take a lead. 

    If the D800 has a 36mpx sensor and they gang the pixels to reach 1920×1080 without moire and aliasing then I’ll be sold and stay. Otherwise I’ll be forced to switch. Your move Nikon. 

  • Travis

    It’s well worth noting that when any company gets too large and too “by the book,” ie they have a policy manual for EVERYTHING they become incapable of changing and adapting…. 

  • Anne

    I remember we bought one of the first (or the first?) widely available digital camera, produced by Kodak in the mid-late 90′s. It came at a whopping 1 megapixel (if that), and an ungodly $1000 price tag. It didn’t have video capabilities, but I remember being fascinated by the fact that you could record/associate sounds with images.

    I also remember the second digital camera we bought from Kodak–horrible, even for a point-and-shoot at that time. That’s when I lost respect for Kodak as a digital film company, and moved on.

    They made some beautiful film, but that is sadly a dying industry. Younger photographers probably know Kodak for mediocre point-and-shoots, nothing more.

  • Anne

    brainfart. digital camera, not film.

  • Steven Bradford

    The analogy falls apart in several ways. Kodak has never been a camera (hardware) company. They are not Eastman Camera company. They sold cameras in order to sell FILM, which is where the money was. 

    Apple had always been a hardware company that sold software at times to help out the hardware business.

    For this Analogy to work, Apple would have introduced an iPhone that eliminated the need for 99% of the purchase from the iTunes store. Instead they introduced with the iPhone a whole new category of purchases through Apple- The App Store. So as much a brand extension as a cannibalization.

    Digital photography didn’t introduce a profitable consumable item to use with the cameras, it eliminated that profit center. And to a lot of people’s surprise, it really decimated people’s desire for physical prints, the other profit center.

    I think what apple did, was completely change their core business, from depending on PC sales, to greatly increasing their income through tiny software sales (songs and apps). The similarity to $3 to $6 rolls of film and (and then another few dollars for prints) is interesting. But not at all obvious as the path to pursue in 2001. 

    Because Kodak did Cannibalize their market. They were first in the digital camera market. The problem is, digital doesn’t generate the kind of income selling film did. And ink jet supplies is not only much more competitive, people don’t seem to have as much of a need for it as we thought they would ten years ago. 

    Now could Kodak have done a better job of introducing and especially marketing their products. Absolutely. But it’s not because they weren’t in the game. And it’s hard to see what they should have done instead to replace film sales. Invented the ipod? REally?