Why Canon is the Microsoft of the Camera World

With Canon’s strong presence – or should it increase its stranglehold – in the mirrorless market, you can easily argue it’s becoming the Microsoft of the camera world. Microsoft is ubiquitous in the world of personal computing with its ubiquitous software products in business, school and home, from productivity to communications and entertainment. In fact, the underlying operating system of most PCs runs Microsoft Windows (around 75%).

Founded in 1975, Microsoft emerged from the computer age of the Wild West as mainframe computers left government departments and large corporations, with the introduction of small, low-cost home devices programmable by enthusiasts. The focus was on software capable of running programming code on these early machines, but its big breakthrough came in 1980, when IBM asked it to provide an operating system for its new personal computer. He didn’t make operating systems, so he bought one called 86-DOS, renaming it MS-DOS and selling a license to IBM, but retaining ownership.

While IBM had protected the BIOS – that little piece of code on your PC that interfaces between the hardware and the operating system – no such restrictions applied to the operating system itself, because Microsoft owned it. Once the BIOS was reverse-engineered, Microsoft was free to sell MS-DOS to the world.

And he did.

After its IPO, a rise in share price through continued successes created three billionaires and approximately 12,000 millionaires among its employees.

Microsoft and Canon: similarities

What sets Microsoft apart in the IT world is its absolute dominance in many industries. For example, its 75% market share in desktop computers (although it fell from 95% in 2009). In fact, since the days of MS-DOS and the rise of IBM-compatible PCs, Microsoft has had OS numbers in the high 90s.

It also enjoyed past dominance with Internet Explorer, Office, and Windows Server. It hasn’t historically been a hardware company either – with the exception of Microsoft’s long-manufactured mouse – but has branched out with Xbox, as well as its Surface and HoloLens devices. And let’s not forget the acquisition of Nokia and the error of Windows Mobile.

Microsoft is ubiquitous, especially since it reinvented itself in the new era of subscription services (or Software-as-a-Service) and is very cloud-focused.

Of course, it’s not the computer software that defines Canon, but the cameras. Founded in 1933, the company primarily focuses on its optical and printing divisions, although it was originally a camera manufacturer and introduced the Kwanon, the first 35mm focal plane shutter camera. from Japan.

Canon is now a 3.513 billion yen (about $30 billion) revenue giant with about 200,000 employees worldwide. It has expanded into the printing and related optical industries, including medical imaging and industrial applications such as lithography. It’s also more unusual among camera makers in that it designs and manufactures its own sensors.

However, it’s Canon’s joint successes in the home camera and printer markets that really set it apart in the consumer sector. This is largely due to its desire to constantly reinvent itself on the basis of innovation and quality. He’s never been one to let his past successes get in the way of how he pursues future products. It is a difficult path to walk and one on which many other companies have failed. You want to develop technologies fast enough to sell them on the global market, but not fast enough for them to be usurped by other manufacturers.

Canon introduced a steady stream of camera technologies such as its Serenar lenses, the Canonflex SLR, the F-1 SLR (with its accompanying FD mount) and the AE-1 (incorporating a microprocessor), before exit from the EOS system. (including EF mount). While Nikon was a strong supporter of the F mount, Canon pushed lens designs to new limits. It was this relentless innovation that ultimately led him to overtake Nikon as the premier camera maker in the 1990s.

While we might be interested in camera innovation, it now accounts for just 19% of Canon’s net sales and printing is by far the most important aspect of its business at 55%. That said, Canon is still a force to be reckoned with and, depending on how you count the numbers, has around 40% of the camera market in terms of sales and revenue. It’s a changing dynamic that sees it refocusing away from DSLRs and built-in cameras towards more cost-effective mirrorless models.

A 40% market share is by no means equivalent to Microsoft’s 75% desktop market share, but it doesn’t reflect the fact that most computing is done on smartphones, which makes iOS and its various globally significant derivatives. And of course, smartphones also make up the vast majority of cameras sold today. In their specific markets, Microsoft and Canon are a dominant force and no one can deny that their market share is based, at least in part, on producing quality products that people want.

Canon has successfully used technology to attract key markets to leverage success further down the market chain. For example, the release of the EF mount made its products more favorable to working professionals which built popular success and trickled down to more consumer-oriented products. This happened at a time of mass market expansion which she was able to take advantage of, dramatically increasing her business. And while Nikon released the first fully integrated DSLR, it was Canon that managed to capitalize on filling out its lineup, again with spin-offs.

There are two main markets – consumer and business/professional – for Canon and Microsoft which have different motivations and needs, leading to different product development.

For the consumer market, Canon could be seen as a “safe bet” when buying a camera, with consumers paying a premium for something that “just works”. This consumer group thinking has been embodied with its new mirrorless models which have gone from almost no sales to virtual equivalence with Sony within a few years.

Microsoft is all too familiar with technological innovation to maintain its market position and revenue streams. While Windows may be dominant, it is no longer the primary source of revenue, but is now powered by its subscription services.

On the “professional” side, Canon is of course going after professional photographers and for Microsoft, it is targeting companies and enterprises. Enterprise sales drive revenue and penetration into broader consumer markets, with Windows increasingly becoming a single platform to deliver this service. In fact, Microsoft is venturing more and more into macOS, iOS and Android in order to sell more licenses and, in a change of heart, is embracing the use of open source software (according to the infamous Steve Ballmer” Linux is a cancer” Quote). Microsoft, likewise, is a safe bet.

The dark side

Of course, Microsoft’s success hasn’t been entirely without incident, including the Justice Department’s anticompetitive conduct lawsuit related to monopolistic practices. It was the rapacity of Microsoft’s business dealings to maintain control of operating system licenses – and later other product categories – that caught the attention of the Department of Justice. The Internet Explorer consolidation was the straw that broke the camel’s back and Microsoft moved in in 2004. The investigation highlighted what was known internally as “embracing, extending and extinguish” (EEE) when entering new product categories, something familiar to Google’s competitors. . Many vendors and their products have been discontinued – WordPerfect and SmartSuite – because of the use of such tactics designed to compete on price, expand capabilities, and then deliberately lock users in.

Canon lenses from 2021

There is no suggestion that Canon behaves like this, although all camera manufacturers have tried to lock their consumers into proprietary lens mounts in order to increase lens sales, which is why third-party manufacturers such as Sigma have reverse mount specs. However, in a similar way to open source, even that is changing with groups like L-Mount Alliance.

A Microsoft future?

So does Canon have a future similar to Microsoft’s? Microsoft’s fortunes have been tied to changing its business model and adapting to new consumer markets, while maintaining dominance in its traditional markets. Such is the case with Canon, which is shifting its broader business into related printing and imaging industries, targeting larger business-to-business transactions rather than direct-to-consumer markets.

However, its DNA is founded on cameras and here it is moving fast to build a world-class mirrorless system that will last a generation. And it is a success, which should bear fruit because benefits clearly flow from this technologically advanced field. This strategy is accentuated as it closes the production of integrated cameras thanks to the closure of its factory in Zhuhai; the release of its first APS-C RF mount camera raises questions about the future of its EOS-M range and its DSLRs more generally. Canon adapts and takes advantage of a changing landscape.

So if Canon is the Microsoft of the camera world, then who is Apple’s equivalent?

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