Strategy Session: Nikon—Redefining the Imaging Ecosystem

Strategy Session: Nikon—Redefining the Imaging Ecosystem

3017
1
SHARE
Strategy-Session-graphic-2017-New-Pix

Bo Kajiwara was recently appointed president of Nikon Inc., the subsidiary of Nikon Corporation for the Americas. Kajiwara transitioned from his role as the senior general manager, Sales and Marketing, for Nikon Europe.

During his 29-year tenure with Nikon, Kajiwara has overseen many major product and marketing efforts. These include the launches of industry-changing DSLR cameras, multiple NIKKOR lenses and compact camera options. In his new position as president and CEO of Nikon Inc., Kajiwara will oversee markets in the Americas, including the United States, Canada, Mexico and Central/Latin America, with a concentrated effort on marketing, product development and customer satisfaction.

Bo-Kajiwara
Bo Kajiwara

I met with Kajiwara in his Melville office to talk about his return to the U.S. and the challenges and opportunities that face him.

JG: First of all, how does it feel to be back in the U.S.?

BK: I’m excited. I had a great experience during my last 91/2-year stay, and I’m happy to be back with my team.

Do you feel there has been a big change since you left?

The market situation has changed a lot. The industry has been through some tough times but seems to be rebounding. Of course, the U.S. economy is very good, which clearly works in our favor. Also, my position has changed, so the responsibility level is very different. I have some good pressure on myself to lead the team, but the team is really supportive.

It certainly is a challenging time in the camera industry. Not necessarily in the imaging industry, as so many are taking pictures. What are the real challenges facing Nikon as you return to this market?

The industry has gone through challenges, and certainly smartphone popularity has influenced much of that. The market’s reduction rate has started to diminish, and that’s good news. The opportunity is that more and more people are taking pictures. The foundation of people taking pictures is greater than ever. There are a lot of passionate people who love picture taking, and we believe we can step many of them up to cameras.

I think it’s our obligation as one of the major manufacturers to create an environment to educate those people, not only when they purchase but post purchase as well. We must provide services and workshops, like Nikon School, where we can cultivate the imaging culture. Nikon-Logo-w-tag

There was an article in the New York Times recently that focused on some high schools teaching photography in darkrooms again. 

There is usually a big trend shift every 10 or 20 years: older things are considered cool again. The smartphone took over everything. It’s a convenient tool and it works, but one of our obligations is to talk to people, to convince them to try new things.  Taking pictures with cameras can enrich their lives. We have our strengths, but we know there is a new ecosystem. We’re working on fitting into that new ecosystem, so people will consider Nikon as they choose to improve their picture taking.

Is the smartphone an enemy or a friend?

It’s interesting, because at the beginning, it was an enemy. Now once you understand what you can do, it becomes your neighbor. Smartphones have changed everyone’s life for the better, and not just for imaging. The phone has become the central hub for an ecosystem that encompasses just about all of today’s connected products. When you get close to your neighbor, friendship begins. And once that happens, you learn how to cooperate. If you have this rich environment, photography and connectivity are a good combination. That’s why we see the importance of our cameras to be connected versus fighting against it. Smartphones are a platform for everyone’s activities, but 10 years from now, you never know.

Nikon-D850-w-24-70-and-grip
Nikon D850

More and more people are seeing value in the DSLR system. But we did not do crazy Black Friday deals like we have in the past. And we saw a strong trend toward our DSLR system during the holiday season. It gives us confidence that our message is being heard—especially in the high end, people are buying DSLR systems.

Is Nikon’s strategy to focus on the high end?

When we talk about the DSLR system, I think each level has its role. Of course, the high end is where we are now concentrating with the introduction of the D850, and the successful D750. These entries are very important to us, and we will do our utmost to have people understand the strengths and value of these cameras for passionate photographers.

But entry-level DSLRs, like the D3400, are very important cameras for encouraging people to step up. The pyramid of people stepping up is gone. The step up now is from the foundation of smartphones to new kinds of picture taking, where they can either take a small step to the entry level or a leap to a more serious DSLR.

So while our core audience is coming from the higher end, we will certainly invest and continue to market to entry-level and enthusiast photographers as well.

The mirrorless camera is obviously affecting the low-end DSLR market. I know there have been some announcements and discussion that Nikon would be part of that business.

The impact of mirrorless differs from region to region. It seems that mirrorless is now getting more exposure in the U.S. market. Nikon Corp. management announced we would be looking into the mirrorless system. It’s all about balance. We will do what is good for the consumer, the industry and for Nikon.

What’s interesting to us is that after the introduction of the D850, we have a lot of back orders due to exceptional demand. That is one good result or evidence that there are a lot of passionate photographers who want to concentrate on our DSLRs, and we have the advantages of our NIKKOR lens system. So yes, mirrorless is coming, but this has been a good experience for the industry. What we’ve learned is that if you provide the right solution to the market, like the D850, there will still be a lot of demand.

The KeyMission camera you introduced did not go as well as you would have liked. KeyMission wasn’t the greatest experience. How do you see the VR/AR/360º market affecting your business?

We believe the 360º-capable camera is an important environment. In the case of the KeyMission 360, the hardware was good but the software didn’t work as we expected. So we learned a lot. We believe that the 360º area is important to the imaging industry. And we’re looking at how we can participate in this arena in the future.

The retail landscape has changed, and like the business, it seems to have bottomed out. Best Buy is certainly becoming more aggressive in the imaging category, and of course Amazon is dominant as well. How do you see the retail landscape helping you and the imaging business?

I would say the variety of retail choices and styles are supporting the industry.  Everyone has their strengths and the opportunity to reach their end users. For example, specialty channel retailers are the experts in photography, so they have the advantage of education. The passionate photographer looking for guidance is driving the imaging category, not only today but in the future. Best Buy recognized this early on and is investing heavily in their concept stores to capture this customer.

In e-commerce, major photo retailers have spent the past few years investing online and are reaping the benefits of their efforts. It is vital for a retailer to know their strengths and communicate this to the consumer. There is an emerging balance in retail activities now: strong photo specialty, strong mass market and healthy e-commerce—and all with a definitive structure.

What can retailers do better to help their sales?

They should be the experts in areas where they are strong and they should strengthen additional areas by learning from other retailers. There is no clear answer where we say fix this, and it will be fine. But with the Internet becoming such a threat to the brick-and-mortar environment, retailers should offer what the Internet cannot. Everyone has their strengths and they should work toward being successful at them.

How is the Nikkor lens business doing?

This is certainly a growth area for us. Cameras like the D850 will positively affect our lens and accessory business. We stress that it is a system that will grow and benefit the retailers as well as our customers.

Nikon has always been a leader in the pro market, but others have tried to encroach on your hold there. How important is the pro business to Nikon?

The professional market for Nikon has been important from the beginning and still is. We have a great partnership with our pros and high-end amateurs. We receive a lot of good thoughts and opinions from them, and we try to always provide better solutions to satisfy their needs. They can certainly have demanding needs. They expect more, and that’s why we want to provide the best solutions. It has always been our brand strength, and we love the challenge.

Many of your major competitors are more diversified, whereas Nikon is primarily an imaging/camera company. That offers special challenges. You’re in a market where the compact camera business went away. What are the challenges for a company like yours that really depends on this industry and hobby to continue to grow?

This hobby or industry will not disappear, but it is up to us to cultivate and keep on increasing over the smartphone. I’m not worried about the imaging business. As far as Nikon goes, we are quite profitable in the imaging and semiconductor businesses. And we are now concentrating on the healthcare business, mainly medical, which is a future opportunity for us. It’s well balanced right now. As I said, industries go through good and bad times, but we are now in good shape. We’re investing more in healthcare, which is a positive sign.

So even though your camera volume is down, your profit is still strong?

Yes, very much so.

Why is the CES show important to you?

Nikon is an imaging brand, but in the IoT environment, we are certainly also a player in the consumer electronic ecosystem. We are a capture device but also a communications device. We can do a lot of things, and we have a lot to offer other high-tech companies—even industry giants like the Googles and Apples of the world. Moreover, we are the experts in imaging, but in this ecosystem we have a much broader role. That’s why we want to be there; we want to have people understand how we can contribute to their digital lives.

MRMC-Milo
MRMC’s Milo computerized motion control system

We are in a unique position to continue our long legacy of innovation. For example, at CES 2018 Nikon is demonstrating robotic technology from MRMC, a Nikon Group Company. Mark Roberts Motion Control (MRMC) creates robotic still and video capture solutions for a wide variety of applications. They range from the world’s largest motion control arm to e-commerce systems designed to capture the smallest details with incredible precision.

Moreover, we have a special guest speaker at our booth—retired astronaut Captain Scott Kelly. He is well known for his record-breaking time on the ISS, as well as the images he captured from space. Captain Kelly will talk about what it was like to live in space and document the stellar views of Earth and the cosmos using Nikon equipment. In addition, he will likely be participating in other booth activities.

Canon and Sony are two big brands that have been very aggressive in the DSLR and mirrorless categories. Is it more competitive than ever now?

The number of players has certainly changed from 20 years ago when there were more brands. I think healthy competition can cultivate the market, because it pushes each of us to come out with better solutions. Our final goal is for people to appreciate our brand. To do that, we have to be better than others. If you don’t have healthy competition, growth will stop. We’re pushing each other, which ultimately is better for the consumer and better for the industry and better for the imaging culture.

What’s your greatest challenge? What would you like to accomplish?

It’s more of an opportunity. The industry has gone through challenges, including earthquakes and tsunamis. But we’ve seen a lot of good trends, including growth in Nikon’s full-frame DSLR category. We’re striving to come out with good solutions to cultivate the imaging culture.

We have a lot of pride in the Nikon brand. We just celebrated our 100th anniversary; there are reasons why we’ve been around for 100 years. We’re looking forward to the next 100 years—how can we be strong enough to provide solutions and add value to people’s lives. I think our fans are proud to be with us. And in regard to new customers, it’s good for them to understand who we were.

We’ve always been consistent in providing quality products, and Nikon will never compromise on that. If we succeed in doing this, we’ll continue to grow for generations to come.

1 COMMENT

  1. Mr Bo Kajiwara your company is on the right track. I currently own the D810 a great camera. Nikon’s phase fresnel lenses are really peaking my interest in a longer reaching telephoto lens with a lighter load to carry for sports photography. I’m sure to purchase one of these in the near future along with a d500. Although my primary interest is in photography it is also important to have videography capibilities as well. Please keep improving the video functionalities as well.

LEAVE A REPLY