It’s an odd twist of fate that a company that rivals Kodak in the film industry but currently makes so little of its money from the camera business should now be the world’s largest camera manufacturer.
However, before you marvel at the technical advantages of X and GFX systems, consider Fuji’s Instax film cameras as the source of their success having sold over 50 million units to date. How did Fuji get to this point?
While Fuji may be seen as a dean of the camera aficionado, lovingly making the X and GFX systems in the well-rounded lines we see now and serving the “informed” photographer, its heritage extends much further than that. It actually began manufacturing cameras in 1948 and has produced mid-size, 35mm, compact, and semi-miniature models throughout its history.
However, her primary activity has always been film dating back to 1934; Fujifilm became the largest film manufacturer in Japan before moving to Kodak, where it was battling for global market share. This led to her entering into a natural venture with Xerox on imaging solutions, with a diversification that made electronic imaging and magnetic materials an area of focus for research and development along with a side step into medical imaging.
So it’s no surprise that Fuji produced the first all-in-one digital camera in the form of the Fujix DS-1P. This oddly enough technological leap forward led to the demise of Fuji’s SLR cameras, and while they were mass-produced compacts, they weren’t able to make the transition to a DSLR. Instead, it relied on its partnership with Nikon and used its own camera bodies. As a result, Fuji never produced an in-line DSLR, and instead went straight to the mirrorless camera with the X Series.
What all of this hides (shown below) is that the film industry peaked in 2001, continued to dominate until 2003, then fell off a cliff, and by 2009 had lost 90% of its market. For Kodak and Fuji, whose businesses were largely dependent on these revenues, it was a systemic shock.
The architect of Fuji’s transformation was Chairman and CEO Shigetaka Komori who implemented VISION 75, which restructured the company and focused investment on potential growth areas where they had experience. The health sector was a clear target who used his expertise in imaging and industrial chemistry to target medical imaging and pharmaceuticals.
The change was dramatic: Imaging Solutions accounted for 54% of revenue in 2001. This has fallen to only 13% as of 2021, while healthcare now makes up 48%. The difference is more obvious when you look at operating income; 9.5% and 65%, respectively. Money in health care.
Fuji’s approach to digital cameras makes more sense against this background. The obvious focus until the early 2000s was on film, and while it contained the digital technologies within the company, the real money was being made selling compact and bridge cameras. The VISION 75 essentially eliminated film production as a major business segment, along with Nikon’s S Pro lineup of DSLRs, although it left the cash cow that was compact cameras.
The question that has plagued the company with its proud camera heritage is how it should develop an interchangeable-lens camera. The pause caused by the VISION 75 saw Olympus and Panasonic commercialize the mirrorless camera in 2009; Two short years later, the world learned about Fuji’s vision of a digital future in vintage style: the X100.
This was well received, with praise for the combination of retro looks, image quality and size (a result of the tiny APS-C sensor). It’s hard to tell if Fuji is testing the waters, if an interchangeable-lens camera is planned, or if the APS-C is a solid design choice; Either way, the release of the X-Pro1 in 2012 (and the X-Trans sensor) changed the camera world. Fuji is back.
Five years later, it surprised critics again with the release of a second mid-sized mirrorless camera – the GFX-50S – at a relatively modest price of less than $10,000. Fuji pitch is that the full frame is worst Both worlds If you want great image quality in a nimble camera, go with the APS-C X-Series. If you are serious about image quality, the medium format GFX is the answer.
Large numbers of photographers clearly agree with Fuji, which by 2019 ranked third in mirrorless sales, shipping around 500,000 units. It obviously won’t be a concern for companies like Sony or Canon anytime soon, but Olympus and Nikon are both selling out.
All this hides a rather large movie elephant in the room and there are two main figures to highlight here. First, out of 13% of sales volume from photography, 9% comes from film (mainly Instax, instant photo systems, and small labs) with only 4% coming from digital. Second, in the pre-COVID 2019 era, Fuji sold 10 million Instax cameras. Yes, you read that right, Fuji sold more instant film cameras in 2019 than the entire digital camera industry (excluding smartphones).
It should be noted that the success of the Instax was not immediate: the Mini 10 arrived in 1998 and in 2002 Fuji sold one million cameras. By 2004, this had exploded to just 100,000 units as the digital hub took hold, however, the Fuji revival saw those numbers increase to 5 million units in 2016 and 10 million units in 2019. This is a “stack high, sell it cheap” mentality (sold cameras around $100), but the profit is made from sales of background films.
Oddly enough, then, the success of the photography department is largely due to the film. In fact, Fuji digital cameras may be incurring a net loss as film sales support their development and production. More appropriately, Fuji provided Nikon with a wise lesson on how to do business.
Its income collapsed due to films and the solution was to restructure and diversify into relevant consumer and business facing markets. This is the painful process that Nikon is now doing; Nikon would have identified this single point of failure earlier and pivoted under less stressful conditions, a situation that both Canon and Sony avoided.
The important thing to remember is that camera history is unique and does not repeat itself. Since the birth of the Lumix G1 in 2009, it has taken the camera industry 10 years to enter the mirrorless market we see now as a one-way travel. This opportunity will never arise again and the early innovators have lost the initiative, ceding important ground to Sony. Canon got into the melee with full force, and Nikon stumbled behind, having lost momentum.
In this new world, Fuji has been plowing a constant furrow, offering a unique vision of the future unlike anyone else’s. This provides a fast track view of the film, along with a choice between APS-C and medium format.
Image credits: Title photo by Ryan Mense for PetaPixel.