It is time to give kudos to a company that was not too long ago floundering at the bottom of the financial heap and appeared to be close to completely collapsing: Nikon.
Two and a half years after the company moved its manufacturing out of Japan, closed two lens factories, and cut 20% of its international workforce in order to combat seriously poor financial performance, Nikon has clawed its way out of that hole by making good decision after good decision.
The Start of Nikon’s Fall
After watching this company closely for more than a decade, I can easily call out the point where Nikon’s fortunes took a turn for the worse. The year was 2016, and Nikon was proudly showcasing a new series of products at the Photo Plus tradeshow in New York: KeyMission.
This set of three action cameras — one of which was a 360-degree camera — were a major departure for the company and saw it jump into an already crowded and extremely competitive space.
These cameras were not good. They not only did not compete well with industry leaders like GoPro, but the 360-degree action camera in particular would often not function at all. Months and months of software updates did nothing to fix the issue, and the cameras languished on store shelves.
To say these cameras failed isn’t strong enough language: KeyMission was a colossal flop. Not even three years after they were announced, Nikon officially discontinued them, but not before investing considerable assets into software and hardware development that cost the company dearly.
Look at Nikon’s financials starting in 2017, the first full year after it dedicated efforts to KeyMission (courtesy of Toyo Keizai). The blue line shows operating income while the yellow shows sales numbers. While operating income held steady, it would eventually collapse in line with sales numbers, leading to a woeful financial state.
Looking back on this collapse, Nikon blamed its slow transition to mirrorless cameras from its bread-and-butter that were DSLRs. While true, the combined hit of its slowing DSLR sales with it massive internal investment into the loss that was KeyMission was too much for the company to bear.
By January of 2021, Nikon was set to post its worst-ever loss as a business: $720 million.
Some companies never recover from these kinds of financial situations and I’ll be honest, I did not think Nikon would shirk the trend. I was wrong.
First, Nikon buckled down and took mirrorless seriously, launching the Z9 just nine months after hitting rock bottom. Somehow, Nikon’s first serious swing at mirrorless for high-end professionals blew the doors off the competition, besting both Canon and Sony. Now in 2023, it could be easily argued that Nikon’s Z9 still has the technological advantage over both. Canon, for one, has yet to really answer the Z9 as it hasn’t been able to produce a camera that mixes resolution and shooting speed even now in 2023.
Second, the company doubled down on its technology and its loyal users. Just six months after putting the Z9 into the market (and while completely overwhelmed with orders to the degree waiting lists were up to a year long), it released a major firmware update that was so big it could have been a brand new camera — and it was free.
Third, Nikon made strategic partnerships with brands that could use its expertise by leveraging its expertise. For example, it created a wholly-owned subsidiary called Nikon Creates Corporation that will offer the ability to plan, shoot, and produce volumetric, virtual reality, and 3D content as a licensed partner of Microsoft’s Mixed Reality Capture Studios.
Fourth, Nikon started shaving away the parts of its business that weren’t core to its future success. It partnered with Nissin and Profoto to produce strobes for its cameras — if those two make lights better and more profitably, Nikon would just let them just have it. That sentiment was backed up just this past month with its decision to halt production of a Speedlite while also ceasing new orders for another; it indicates that the company has no issue pulling back on this part of the business.
Nikon put its foot down and ripped off the band-aid when it comes to DSLRs, too. It is ready to abandon them entirely by 2025.
At every possible turn since its awful decision to enter the action camera market, Nikon has done the right thing. Its executives learned a hard, hard lesson, but it is paying off. Nikon is very likely never going to dominate sales charts like Canon or Sony because they are much larger, diverse corporations. But what Nikon will do is thrive as a business wholly focused on imaging. The company knows what it is now, and has turned into a lean and focused business.
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Image credits: Header photo by Jan Kopřiva. Other photos by Nikon.