You could easily argue that Canon’s strong position – or if it’s growing stronger – is the mirrorless market, it’s becoming the Microsoft of the camera world. Microsoft is everywhere in the world of personal computing with its software products for business, school and home, from productivity to communication and entertainment. In fact, the main operating system of most PCs runs Microsoft Windows (around 75%).
In the year Founded in 1975, Microsoft came out of the Wild West era of computing, when mainframes moved out of government departments and large corporations, introducing small, low-cost, home devices that could be built by enthusiasts. His focus was on the software that ran the programming code on these early machines, but his big break came in 1980 when IBM asked him to provide an operating system for its new personal computer. Because it didn’t make operating systems, it bought 86-DOS, renamed it MS-DOS, and sold the license to IBM, but retained the copyright.
Although IBM copyrights the BIOS — that tiny bit of code that interfaces between the hardware and the operating system on your PC — Microsoft owns it, but no restrictions apply to the operating system itself. After the BIOS was copied, Microsoft was free to sell MS-DOS to the world.
And he did.
After the initial public offering, the rising stock price on the back of continued success created three billionaires and 12,000 millionaires from its employees.
Microsoft and Canon: similarities
What makes Microsoft stand out in the computer world is its dominance in various fields. For example, its 75% share of the desktop PC market (although down from 95% in 2009). In fact, since the MS-DOS era and the rise of the IBM-compatible PC, Microsoft has had operating system figures at 90%.
It enjoys past dominance in Internet Explorer, Office, and Windows Server. Nor has it historically been a hardware company apart from the long-running Microsoft mouse — but it has done so with the Xbox, as well as its Surface devices and HoloLens. And let’s not forget the Nokia Recovery and Windows Mobile bug.
Microsoft is ubiquitous, especially as it reinvents itself with new subscription services (or software-as-a-service) and is very cloud-focused.
Of course, what defines Canon is the cameras, not the computer software. In the year Founded in 1933, the business is primarily focused around the visual and print divisions, although it was originally a camera manufacturer and introduced Japan’s first 35mm focal-plane lift camera, the Kwannon.
Canon is now a ¥3,513 billion (about $30 billion) revenue behemoth with nearly 200,000 employees worldwide. It expanded its business into related printing and optical industries, including medical imaging and industrial applications such as lithography. It is very unusual among camera manufacturers to design and manufacture its own sensors.
However, Canon’s collective successes in the camera and home printer markets make it stand out in the consumer sector. This is in no small measure due to the business-defining desire to constantly reinvent itself based on innovation and quality. He never once let his past successes stand in the way of his pursuit of future products. This is a difficult path to tread and many other companies have failed. They want to develop technologies quickly to sell to the global market, but not quickly enough, they have been usurped by other manufacturers.
Prior to the release of the EOS system, Canon released a steady stream of camera technology such as Serinar lenses, the Canonflex SLR, the F-1 SLR (with accompanying FD-mount) and the AE-1 (incorporating a microprocessor). (including EF-mount). Where Nikon steadfastly supports the F-mount, Canon pushes lens designs to new limits. It was this constant innovation that made Nikon the leading camera manufacturer in the 1990s.
While we may be interested in camera innovation, it’s now 19% of Canon’s net sales and printing is 55% of its business, far and away the most important aspect of its business. That said, Canon is still a force to be reckoned with and – depending on how you count the numbers – has about 40% of the camera market in both sales and revenue. This is a dynamic trend that is looking away from DSLRs and compact cameras towards more profitable mirrorless models.
A 40% market share is nowhere close to Microsoft’s 75% of the desktop market, but that doesn’t mean most computing happens on smartphones, making iOS and its various services globally important. And of course, smartphones contain most of the cameras sold today. In their respective markets, both Microsoft and Canon are dominant forces 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 drive success further up the marketing chain. For example, the release of EF-mount has made the products more popular and more consumer-oriented products that have built a reputation for workability. This increased the business dramatically when he was able to take advantage of the mass-market expansion. And when Nikon came out with its first fully integrated DSLR, it was Canon with the big potential to fill out the range, once again deceiving.
There are two main markets – consumer and business/professional – for both Canon and Microsoft with different motivations and needs, leading to different product development.
For the consumer market, Canon can be seen as a “safe bet” when buying a camera, as consumers are paying a premium for “something that works”. This mindset of the consumer group is epitomized by the new mirrorless models, which in a few years have grown to become virtual equals in sales with Sony.
Microsoft is familiar with technological innovation to maintain its market position and revenue stream. While Windows may be the dominant, but not the main source of revenue, this is now being driven by subscriptions.
On the “professional” end, Canon really goes after professional photographers and targets corporations and businesses for Microsoft. Enterprise sales will drive revenue and penetration into broader consumer markets, with Windows increasingly becoming a platform for delivering this service. Indeed, Microsoft has been riding on macOS, iOS, and Android to sell more licenses and use open source software (after Steve Ballmer’s famous “Linux is cancer”). quote). Microsoft is also a safe bet.
The dark side
Of course, Microsoft’s success hasn’t been entirely without problems, not least the Justice Department’s anti-competitive behavior charges related to monopolistic practices. What caught the Justice Department’s eye was the racism of Microsoft’s business dealings to control operating system licenses — and later other product categories. The Internet Explorer package broke the camel’s back and Microsoft was able to survive in 2004. The investigation highlights what Google’s competitors are familiar with, known as “embrace, extend and destroy” (EEE) when entering new product categories. . Many vendors and their products have fallen by the wayside—WordPerfect and SmartSuite—using tactics like these designed to compete on price, extend capabilities, and intentionally lock in users.
There’s nothing to suggest Canon has such a feature, although all camera manufacturers try to lock customers into proprietary lenses to increase lens sales, which is why third-party manufacturers like Sigma have reverse-engineered mounting specs. However, similar to open source, even this is changing with groups like the L-Mount Alliance.
The future of Microsoft?
So does Canon have the same future as Microsoft? Microsoft’s fortunes are tied to changing its business model and adapting to new consumer markets while maintaining dominance in traditional markets. This is true as Canon moves its broader business into the related printing and imaging industries, targeting large business-to-business transactions rather than direct-to-consumer markets.
However, the DNA is based on cameras and here it is moving quickly to build a world-class mirrorless system that will last a generation. And since profits are clearly flowing in this technology-enhanced environment, dividends are paying dividends. This strategy was emphasized when the Zhuhai factory shut down integrated camera production. The release of the first APS-C RF-mount camera raises questions about the future of the EOS-M line and DSLRs in general. Canon is adapting and adapting to the changing landscape.
So if Canon is the Microsoft of the camera world, who is Apple?