Canon, Uninnovative, Struggling For Years

Author: John Honovich, Published on Feb 11, 2015

Canon has gone from nothing to arguably the most powerful video surveillance manufacturer in 8 months.

All they had to do was spend $3+ billion USD to get there.

***** ** ***** ****** ****? *** *** **** ***** ** their ******** **** **********?

*** ****** ** ****** ***. ** **** ****, ** ******* Canon's **** - **** ********** *** *** ******** **** ****.

*** **** * ***** **** ********* ********* ****** *** ******** electronics, ** ******* *** ***** ******* *******. ***** *** *** been **** ** *********** ** ****.

******, **** *** **** * *****, ******* *** **** **** have **** **** ** ****:

*** *******, **** ** $** ******* *** ******* ** *** down ** *** $** ******* *** *****.

*****'* **** ******** ***** *** ****** ******** (~**% ** *******) and ******* ******* (~**%).

** *******, ***** *** **** **** ** **** *** *** past * *****:

** * ****** ** ****, ***** ****** ******* ******* ** their '******** *** ****** *****', ***** *** ********* **** **** over *** **** * *****. *******, ***** ** ********* ******* ***********,

"** *** ******* *******, ** ******** *** ******* ****-** ** launching *** ******** **** *** ******** *** * ******* ** indoor ************ ** *** *** ** **** *** ******** ***** results **** ************* ************ *** ****** ** *** ******."

**** ** ****** *** ** ********* *** **** ***, **** importantly, *** **** ****, **** ******* ********* ******.

*******

************, *** * ********** *******, ***** *** ******* ***** ** the ***** ******* *** ***** **** ***********, ******* ******** ********** competitors **** ******* *** ***** ******* ****** *** **** **** period.

** *** ****** ****, ***** ********** ****:

"****** *** ***************-**** ******* ******* ********* ** **** ***** ********** due ** *** ******** ********. ** *** ******* ******* *******, demand ********* ** ****** ** **** ********* ********* *** ******** markets."

***** *** ****** ****** ** ******** ** **** **** *** obvious *** ********** ***** **** **** *********** ******* ** ******** devices / ********** / *******. ** **** ***** *** **** with ****, *** **** ***** ****** ** ** ** ***** the ********** ** ************ *** *****?

Innovate **** **** *** *********?

***** ** ***** ***** ******, ** ** **** ** ********** why ***** **** ***** ********** ***. *** ******* ******* ** be ********** ****-****** *** ****** ** **** ******* *** *******.

*** ***, **** **** ****** **** * ****** (** ************) whose ****** **** ** ************* ********* *** *** ** ***** attack ** ***-**** ******* ************* **** **** ***** ** ****** against.

**'* ********** ** ******* **** ***** *** *** **** *** Milestone***************** *********** **** *** *** *** **********.

*** *** *********** ** ** ***** *** *** ******** **** a '***** ********', ** ******** *****-******* *** *** *********** *****. But **** ***** ****** **** **** * *** **** ** trying ** *** *** *** *******? *** **** ******** ********* such * ********* *** ******* **********?

** ***, *** ********** **** *** **** ** *** *** two *************, ***** ** ** ********** ************ ***** ** **, but ***** ** **** **** *** **** ******* ** ***** for *** **** * *****.

Comments (10)

"Demand for interchangeable-lens digital cameras continued to face harsh conditions due to the economic slowdown. As for digital compact cameras, demand continued to shrink in both developed countries and emerging markets."

Canon was simply unable to innovate to deal with the obvious and inevitable shift away from traditional cameras to Internet devices / smartphone / cameras. If they could not deal with that, how does Canon expect to do so given the challenges IP surveillance now faces?

Dealing with it would be one thing but they don't even seem to acknowledge the change in technology away from compact cameras and DSLR cameras to mobile device cameras as you mentioned. Sure there will most likely be a small market for those devices but the overwhelming majority of people will use their mobile device over a standard digital camera.

Will this be a pattern with their share of the surveillance industry? How will they adapt to the continuous changes?

The Japanese was the king during the analog age, but currently, they have lost in the digital evolution. IP cameras are based on SOC (system on chips), which requires the rapid development of both hardware and software. It is high tech labor intensive, and Japanese doesn’t have the labor resources to compete.

What else would Canon need to do to become nigh unbeatable, besides execute this properly? These seem like big moves now that the picture is coming into focus. Would adding analytics and a more fleshed out access control product make them a real direct threat to Avigilon? Would having access to lower end product (Axis is not cheap) do it? Burglar alarm (yawn)?

Clearly they are willing to drop the cash, may as well go for everything now before someone else reacts quicker.

Austin,

Analytics and access control would make sense if they are building a solution, though it remains to be seen if and when Canon is going to sell even Axis and Milestone as a solution.

To get the Avigilon benefits, there needs to be a tight coordination / integration of sales and marketing as well, which won't happen if both Axis and Milestone remain independent.

I do think a super Avigilon solution would be a strong play for Canon, if they are willing to put it together.

Consumer compact cameras business is declining like crazy for the last 2 years down to 50% from where it was in 2012. Smart phone is one reason for the loss. You cannot expect imaging companies to produce phones or tablets to cover up the loss. It is not their business. Companies like Canon and Nikon have been hit hard. When you examine the graphs above, Canon has coped with it pretty well. Now they are trying to recover by moving their focus to different product groups they have.

I wonder how the uptick in dSLR has offset the loss in point and shoot. Anywhere close to a wash, or more like saving the Titanic with a leaky bucket?

John,

I think you are right on the mark here. "Super Avigilon" will not be easy to pull off. Canon is in need of a strong U.S. CEO who has experience in the industry and has led a Japanese company. That person would need to assimilate Milestone and AXIS and that includes cutting redundant management. Very few candidiates like this but they are out there. Independant companies running simultaneously in this case is a doomed strategy.

John,

I don’t think you’re seeing the potential here. Let’s consider what might be (hypothetically) possible.. First off, Ray Mauritsson no longer needs to report to those shareholders (or worse, those pesky customers). Now he can report to somebody in Japan! He’ll have lots of additional meetings and presentations to give, all the while being under the gun to deliver sales and revenue. If Ray doesn’t work out, then maybe it’d be good to replace him with somebody a little more engrossed in Canon’s culture. Speaking of Canon’s culture, of course it’s so much larger, mature, and sophisticated than the Axis way of doing business no doubt Axis can benefit from their supply chain practices, project management, and product management processes. The middle management at Axis has so much to gain from those 3AM conference calls and will probably need to put together another slide deck for that meeting.. Of course, if there are hiccups it might be due to Axis not really understanding how Canon works, and more meetings, maybe even moving some people around might be in order. Speaking of moving people around, there’s probably a lot of redundancy in the services provided by IT, HR, finance, marketing, product support, and oh yeah, supply chain & manufacturing. If Axis can save money by using Canon’s services, it will go straight to the bottom line! So those can probably be consolidated—smooth as silk. And given the cost of real estate these days I’m sure some physical facilities should be consolidated too—moving is a highly productive activity. When the dust settles the opportunities for sales synergy are endless. For example when a Canon dealer is closing on a RadPRO D2-50RF Dynamic Digital RF Radiography and Fluoroscopy machine he can sell some IP cameras too! Because of course there’s no reason they can’t go to market the same way (since they both use electricity), and if you squint a little the customers look a lot alike (mostly humanoid). I’m happy for Axis AND Canon in this deal.

Invention is different than innovation. Innovation is when there is actually a major market impact, which their financial results and overall production position shows that there has been little of.

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