Brand Licensing and the Nikon Phone


By this point, the crippling blow dealt to compact cameras by the rise of smartphones is old news, but camera manufacturers are now mounting counterattacks. They’ve certainly suffered for long enough. Sales for compact cameras fell by 30% in 2011 alone, and kept on falling. They’re at 102 million units for this year, compared to 144 million units just three years ago.

Very soon, we’ll be seeing some of the first substantial responses to this falling demand by camera manufacturers. A lot of recent buzz has focused on the Sony “Lens Cameras,” a combined zoom lens and sensor meant to be plugged into a smartphone.

While it will likely improve on your existing phone camera, it won’t be that revolutionary. After all, consumers are ditching their compact cameras specifically because their phones are already good enough for day-to-day snapshots. Plus, while it is pretty neat to share shots taken on your lens camera directly through smartphone apps, that’s already pretty easy to do with WiFi-capable cameras like the Canon N.

The Nexus 4, precursor to the upcoming Nexus 5

Nikon, however, might respond to the situation in a different way: by cashing in on its brand. Last March, rumors started to surface that the upcoming Google-made Nexus 5 smartphone would feature a Nikon branded camera. These are still only rumors, but many sources are convinced of their validity nonetheless.

Keep in mind, a lot of people also thought that the recently released Lumia 1020 would feature a Canon branded camera, but it did not.

So let’s call this a hypothetical question: would it be a good idea for Nikon to work with a phone manufacturer to produce a phone with a Nikon branded camera?

There would be some definite benefits. Licensing a brand basically amounts to renting out one’s reputation. Nikon is known for its fantastic cameras, and consumers would likely assume that a phone emblazoned with the Nikon name would take some great pictures. This could in turn boost sales, and Nikon would then share in the profits.

Plus, there’s virtually no R&D costs, and Nikon probably won’t be the party dealing with manufacturing. Consider the recent partnership between Hasselblad and Sony to produce a line of luxury consumer cameras: Hasselblad didn’t need to worry about building a new camera system from the ground up — the company simply applied its brand name and some luxury touches to a line of already-built cameras.

But there are potential hazards as well. Licensing out your brand only works as long as people associate your name with an excellent product. If this hypothetical phone camera didn’t meet expectations, Nikon would risk cheapening its brand, which could create a ripple effect that would negatively impact the business in other sectors.

And because the phone would necessarily be the product of a partnership, Nikon would have a tougher time maintaining quality control.

On top of that, Nikon won’t be able to replace its lost compact camera sales by slapping its name on a bunch of phones. For starters, the move would only rake in a small portion of the profits given the relatively small role that camera quality plays in the smartphone package.

Plus, even if the Nikon phone revolutionized the mobile photography world with an 80 megapixel camera and negligible noise at ISO 128,000, they’d just be convincing more and more people to make the shift from compacts to smartphones, exacerbating the initial problem.

Bottom line: brand licensing may serve as a loss-minimization strategy for camera companies, but it isn’t a substitute for innovating in existing markets and exploring new markets.

Nikon understands this well, and its FM10 film SLR exemplifies this understanding. This simple, fully manual camera is built by Cosina and based on the Cosina CT-1 chassis, but it bears the Nikon name and is sold by Nikon. In this age of digital dominance, it is one of only two film cameras still sold by Nikon (the other being the Nikon F6).

It’s a place holder, a minimal offering with low manufacturing costs meant to satisfy those few people still looking to use a classic SLR. It’s not meant to make up for the decimated film camera market. In a similar way, a branded phone could keep the Nikon name relevant for snapshooters without requiring significant investment on the company’s part.

So if Google’s Nexus 5 features Nikon branding — or Pentax or Canon or Olympus for that matter — the company would do well to put whatever royalty payments it receives into R&D, because it’ll take something more substantial than a smartphone with a Nikon-branded camera to halt sliding profits.

Image credits: Photographs by and Joe Ravi

  • Renato Murakami

    Unless Nikon actually contributes something in the R&D department, sounds like a kind of stupid move for Nikon. I mean, it might fool some people, but most will just know that there’s nothing Nikon there, just the name.
    Now, if Nikon took a step further to partner with a smartphone brand and cram some of it’s tech in a smartphone, then it gets interesting.
    Yes, they’d be also going against their own line of point ‘n shoot cameras and whatnot, but I don’t think the tendency will be change simply by them refusing to work with smartphones. Samsung and Sony kinda realized that already.
    At this point though, both Canon and Nikon are risking the monolithic big corporation kinda problem… they were already kinda late to the mirrorless trend, and still didn’t delived cameras in that area that are up to par with the more sucessful brands like Sony and Olympus (yes, they are still very good and nice, but failed to get a following like NEX or PEN line).
    With smartphone companies like Nokia and Samsung already making their steps into the higher than average camera quality/functions for smartphones, I fear that they are already loosing the chance to attach their names in that area.

  • analogworm

    Actually I really like what Nokia is doing by trying to create the best camera on a phone.. Simply branding a phone Nikon won’t cut it, but if they would make an exclusive with another manufacturer and really bump up camera quality and usability that would be good.
    Compacts are a sinking ship anyhow, way too many types of compacts are on the market. I reckon that should be narrowed down to a few very good ones for a select group of enthusiasts.

  • The Oracle

    Nokia has a complete line of phones with Carl Zeiss optics. Does this sell more phones than it otherwise would? Not really. Much like the way the HTC phones that feature Beats Audio has not impacted the market in any significant way. No one believes that Nikon has somehow created some incredible optics that are just sitting on the shelf waiting to be debuted in a phone. Nokia’s 41mp phone was a breakthrough, but was that because of the Zeiss lens or the software? Does it matter, really? A camera centric phone would find a market, but Nikon’s ability to write software and be innovative outside of hardware and optics is dubious at best, just look at the 8-bit menus on any current camera they sell. Certainly they will not suddenly become a cell phone manufacturing company, so branding of some internal components will be the limit of their ability to participate in the market that is killing their primary market. I would suggest video is more open to opportunity, but the marketing “geniuses” inside of Nikon show they have no real desire to attack this market and willingly cede it Canon. Yes, Canon has a large video presence, but so does Panasonic. Maybe Panasonic and Nikon would make a good team. Nikon has stumbled in the mirrorless market where Panasonic has a strong presence, Panasonic does not have products in the Pro DSLR market or lenses, but they do have market share in the video cameras market that competes against Canon. Merger is likely in Nikons future if they are to remain competitive. These hard facts will alter Nikon as we know it, and that may or may not be a good thing for enthusiasts. Leica seems to be doing just fine without a presence in the $200 camera market, and maybe that will be the future of Nikon, more Pro Level lenses and DSLR’s, where they can compete in a field they are competitive in.

  • Syuaip

    14 bit RAW please…

  • faloc


  • dustin dowell

    I thought Nikon already released a 41mp windows phone…