Industry News: Nikon to end camera production in Japan

David - Sydney

EOS R
CR Pro
Dec 7, 2014
988
829
www.flickr.com
I think you are confused about Germany.
You are probably correct as I'm not a historian but a few things did occur:
The Morgenthau Plan towards pastoralisation with the destruction of 1500 heavy manufacturing plants, car production down to 10% of pre-war capacity and a lack of access to quality raw materials eg steel. The Soviets were reported to be even more heavy handed for dismantling manufacturing in east germany.
Massive theft of German intellectual property and no reason to develop IP in Germany as it could not be patentable for a long time
Operation paperclip to move the best German scientists to the US
Initial hyperinflation reducing the labour costs relative to the west but this turned around with stability in the '50s with the D mark
The Berlin wall stopped east Germans moving to the west and cheaper labour came from southern Europe.
The Soviet state planned manufacturing outputs were based on quotas and not really known for quality.

One major difference in moving manufacturing from Japan to other countries is the lack of keiretsu (interlinked local subsidiaries) and just-in-time manufacturing from short distance sub contractors/suppliers.

As an aside, mainland China had (for a long time) a controlled cost labour force and used a variety of methods to transfer technology from foreign companies in exchange for minority stakes. I worked in Shanghai in the mid-90s in the telco manufacturing industry and it was an eye-opening experience.
 
Last edited:
  • Like
  • Wow
Reactions: LDS and FramerMCB

dolina

millennial
Dec 27, 2011
2,244
317
31
34109
www.facebook.com
Spoiler alert: The Canon R5 sensor is in no way inferior to Sony sensors.

And Nikon use Sony sensors...
How many months has the R5 sensor been out?

How many years has Sony's mirrorless image sensors been the tech leader?

Nikon uses in-house image sensors and Sony sensors when economically applicable.
 
Last edited:

dolina

millennial
Dec 27, 2011
2,244
317
31
34109
www.facebook.com
That is such a distorted view of the market.

Yes it has been in decline for a decade, but it underwent unprecedented growth before that. In reality the market is returning to historical norms.

Canon have diversified very successfully. Sony sensor division was spun off years ago and has nothing to do with their camera division.

Corporations moving production to leverage cheaper facilities and labor is a time tested tradition, nothing particular startling or surprising in the announcement at all. Nikon are only talking about consolidating production in Thailand where the bulk of their manufacture ring was already done anyway.
The bulk of the market was for consumer cameras. Smartphones ate into it that's why almost all of today's point and shoots are positioned for the premium market with large sensors or specialized with super zooms or under water.

Smartphone cameras has gotten so good that they are bought every 2-3 years that it made most consumers not consider buying a new dedicated camera anymore.

To the point that I saw one CIPA (or other market) research pointing to male retirees as a major purchaser of camera gear right after professional photograpehrs.
 
Last edited:

dolina

millennial
Dec 27, 2011
2,244
317
31
34109
www.facebook.com
Senors in digital cameras are commodity silicon products and are in no way "superior tech." But since you mentioned Apple, their new M1 SOC is very much superior tech, and innovation like that is why they take the lion's share of the margins on their products. Sony's just another contract supplier.
For a period of time Sony image sensors for smartphones were the preferred image sensors for flagship smartphones like the iPhone.

That is how Sony was able to raise R&D money to improve their larger image sensor cameras.

Selling hundreds of millions of smartphoens also was a way for Apple to scratch up R&D money to improve their IPhone chips and ultimately allows for M1 chips for the Mac.

Nikon's management did not look for new applications of their image sensor tech and appear to solely focused on an already shrinking digital camera market.

2020 will be a record worst year for the global digital still camera market. Would not be surprised when 2021 comes about that smaller brands will either file for bankruptcy or be bought out by Canon or Sony.

With less volume of dedicated cameras sold expect a rise in selling price of bodies, lenses and accessories for mirrorless systems
 

unfocused

EOS-1D X Mark III
Jul 20, 2010
6,412
4,033
68
Springfield, IL
www.mgordoncommunications.com
I'm sure this is a cost-saving measure. They will probably save quite a bit on labor costs.

They aren't closing the Japanese factory and already produce some of their biggest hits our of the Thailand one. Also this isn't like they are outsourcing; they own the factory in Thailand. It likely has better connections for parts too as they'll be hundred factories around it. Rather than needing to wait a month for screws to come into Japan from China.

I never said they are outsourcing. I said it would save them money on labor costs.

From the article:
Until now, body manufacturing has been carried out at "Sendai Nikon" in Miyagi Prefecture and "Nikon Thailand (NTC)" in Thailand, but in order to reduce costs, it will be concentrated at the Thai factory...

...The Sendai production plant (Sendai Nikon) will transfer the camera production that has continued for about 40 years to the Thai plant, but will continue to produce the high-performance and high-precision parts required for video products.

This is a chart of minimum wages around the world. It looks like hourly minimum wage in Japan is between $7-9, while in Thailand it is about $10 per day. I'm sure skilled workers get more, but if the daily wage in Thailand is about equal to the hourly wage in Japan, that's a significant savings.
 
  • Like
Reactions: FramerMCB

HMC11

Travel
CR Pro
Sep 5, 2020
63
59
It's always a sad affair for the local population that is affected when manufacturing gets moved overseas as there would be a loss of jobs for those in the sectors concerned. Even if 'replacement' manufacturing can somehow emerge (which is not necessarily the case), it would be a different group of workers who benefit. It's true that such offshoring makes financial sense for the company involves, but it follows an economic model that lawfully requires corporations to make money for shareholders. Whatever practices that can gain a financial advantage legally, even if ethically questionable, would be pursued eventually by someone willing to strive towards greater profits regardless of social costs.

This move by Nikon could potentially mean more competitive pricing, so it would be 'great' for photographers etc. However, as with most competition, it would likely end with with only a few players left through mergers and/or buyouts. When that happens, the monopolistic power of the remaining players would mean much higher prices for consumers. We'd better enjoy it while it lasts.
 

dolina

millennial
Dec 27, 2011
2,244
317
31
34109
www.facebook.com
This move by Nikon could potentially mean more competitive pricing, so it would be 'great' for photographers etc. However, as with most competition, it would likely end with with only a few players left through mergers and/or buyouts. When that happens, the monopolistic power of the remaining players would mean much higher prices for consumers. We'd better enjoy it while it lasts.
Number of globally shipped cameras, lenses and accessories have been in decline YoY.

Even when no monopolies/duopolies are put into play it means prices of gear will go up as economies of scale is shrinking.

I could see a future where in only Canon and Sony being the only player by mid 20s.
 

tmroper

EOS 90D
Sep 22, 2016
177
66
For a period of time Sony image sensors for smartphones were the preferred image sensors for flagship smartphones like the iPhone.

That is how Sony was able to raise R&D money to improve their larger image sensor cameras.

Sony is a huge conglomerate with money coming in from all kinds of different sources. At the dawn of their Alpha mirrorless camera era, they made most of their money from insurance. That's where they got the R&D money to venture into making sensors and cameras to use them. But they've also been making mirrorless digital cameras for decades now, in the form of camcorders, ENG cameras, etc. So they got about 30 years' head start on Nikon for that technology. Their business model is very different from Nikon's--always has been, always will be.
 
  • Like
Reactions: scyrene

Mt Spokane Photography

I post too Much on Here!!
CR Pro
Mar 25, 2011
16,714
1,686
One of the likely big reasons for leaving Japan is the inability to hire workers. Its a huge problem for Japanese businesses. They must import contract labor from other Asian countries. Moving production to Thailand solves that. The workers are in high demand and will find jobs, but if they have to move to a new job, that's a tragedy.

Worker shortage in Japan to hit 6.4m by 2030, survey finds - Nikkei Asia
 

David - Sydney

EOS R
CR Pro
Dec 7, 2014
988
829
www.flickr.com
It's always a sad affair for the local population that is affected when manufacturing gets moved overseas as there would be a loss of jobs for those in the sectors concerned. Even if 'replacement' manufacturing can somehow emerge (which is not necessarily the case), it would be a different group of workers who benefit. It's true that such offshoring makes financial sense for the company involves, but it follows an economic model that lawfully requires corporations to make money for shareholders. Whatever practices that can gain a financial advantage legally, even if ethically questionable, would be pursued eventually by someone willing to strive towards greater profits regardless of social costs.

This move by Nikon could potentially mean more competitive pricing, so it would be 'great' for photographers etc. However, as with most competition, it would likely end with with only a few players left through mergers and/or buyouts. When that happens, the monopolistic power of the remaining players would mean much higher prices for consumers. We'd better enjoy it while it lasts.
The law of comparative advantage is still valid today assuming free trade. Setting aside tariffs/importation duties and subsidies for local production, competition will always mean chasing lower costs if quality can be maintained or at an acceptable level. The latter is always the key issue!
https://en.wikipedia.org/wiki/Comparative_advantage
The Australian government propped up the local car manufacturing plants to the tune of billions of dollars to eventually still close due to scale being too small. Many skilled workers lost their jobs but the "investment" in tax payer funds to subsidise these jobs was untenable. Migrating skill sets to alternative employment is challenging for sure.
AI will be the next big disruption in the labour market globally with people unaware that their jobs could be done by algorithms. Humans are not good at understanding exponential trends.
 

David - Sydney

EOS R
CR Pro
Dec 7, 2014
988
829
www.flickr.com
2020 will be a record worst year for the global digital still camera market. Would not be surprised when 2021 comes about that smaller brands will either file for bankruptcy or be bought out by Canon or Sony.
Bankruptcy I can understand.
Not sure why Canon or Sony would buy them though. Are there product niches that Canon or Sony don't currently cover that would be attractive? Manufacturing capacity wouldn't be an issue in a declining market
Medium format maybe? I don't know how fast that market is declining - if at all.
 

privatebydesign

I post too Much on Here!!
CR Pro
Jan 29, 2011
10,517
5,771
Bankruptcy I can understand.
Not sure why Canon or Sony would buy them though. Are there product niches that Canon or Sony don't currently cover that would be attractive? Manufacturing capacity wouldn't be an issue in a declining market
Medium format maybe? I don't know how fast that market is declining - if at all.
The only reason Sony or Canon would buy one of the smaller camera manufacturers is patents.
 

Codebunny

Elil
Sep 5, 2018
995
1,044
Scotland
Bankruptcy I can understand.
Not sure why Canon or Sony would buy them though. Are there product niches that Canon or Sony don't currently cover that would be attractive? Manufacturing capacity wouldn't be an issue in a declining market
Medium format maybe? I don't know how fast that market is declining - if at all.

If Sony bought Nikon it would be to turn them into a in-house lens brand. Nikon could abandon bodies and just sell lenses. Though it wouldn't change their fortunes as Sony would be a very distant second to Canon.
 

GMCPhotographics

EOS 5D Mark IV
CR Pro
Aug 22, 2010
1,700
423
50
Uk
www.GMCPhotographics.co.uk
How many months has the R5 sensor been out?

How many years has Sony's mirrorless image sensors been the tech leader?

Nikon uses in-house image sensors and Sony sensors when economically applicable.
How are you defining tech leader? Ohh....you mean dominance by iso invariance / DR...that old chestnut that helped Nikon and Sony sell way more DSLR's / Sensor than Canon.....NOT!
Back in the early days of Nikon DSLR's, they invested all their R&D in CCD based sensors. That was a huge mistake, Can had a the clear advantage for a long time with their CMOS based sensors. It's only in recent years that Sony's R&D have provided one clear advantage of their sensors over Canon...and that's the Iso Invariance / DR specification. On all other metrics they are either worse or equal.
Canon have put more 5DIII sensors into the hands of professional photographers than all the other DSLR's put together. That's a massive metric. The 5DIII is the most successful and popular professional camera (not just digital) in history of cameras by quite some margin.
 

docsmith

EOS R
CR Pro
Sep 17, 2010
1,075
534
So, what fluttered through my mind was if Canon would need to follow suit in order to remain cost competitive. But even looking up a few numbers I am reminded what vastly different companies these are:
  • Nikon: ~700 Billion yen in revenue (FY2019); ~26k employees (2016 number from wikipedia)
  • Canon: ~3.6 Trillion yen in revenue (2019); ~300k employees as estimated in 2017
I hope the restructuring works out for Nikon. I'd like to see them stick around.
 

ohm

AF Stickler
Apr 8, 2019
18
14
Japan
YouTube.com
It makes a lot of sense to produce outside of Japan and Nikon have with Z been moving to a almost just in time production. And the Nikon build quality has been really high with the Made in Thailand editions, all the Z glass is really top form.

Apart from rising profits, why does it make sense to lower the quality of work Japanese can do in their home country, lower the oversight in manufacturing, lower the potential of Japan as a camera making country, lower consumer trust in Japan, and more? I get that Nikon are suffering, but this thing, where you just send all work abroad, hurts everyone at home and is a massive reason all first world countries are becoming the same service desk counter for the world.
 

ohm

AF Stickler
Apr 8, 2019
18
14
Japan
YouTube.com
They aren't closing the Japanese factory and already produce some of their biggest hits our of the Thailand one. Also this isn't like they are outsourcing; they own the factory in Thailand. It likely has better connections for parts too as they'll be hundred factories around it. Rather than needing to wait a month for screws to come into Japan from China.

Imagine being so dependent on a foreign country that without them you don't have screws or medicine. This is ridiculous.
 
  • Like
Reactions: dwarven