Nikon is Leaving the Chinese Market

Japanese camera producer Nikon Corp. has decided to shut down one of its plants in China. According to the companys announcement， the Wuxi plant has stopped operation mainly due to the rise of smart phones.

Global shipments of digital cameras plunged 31.7% to 24.2 million in 2016. Nikon alone reported that its sales of imaging products fell 26.4% to 383.8 billion yen （$3.4 billion） during fiscal 2017.

Japanese camera producer Nikon Corp. has decided to shut down one of its plants in China as the global camera market has been impacted by the improving capabilities and popularity of smart phones.

Shutter its Wuxi Camera Plant

Due to the drastic reduction in digital camera sales resulting from consumers changing habits， leading Japanese digital camera maker Nikon announced the closure of its plant in Wuxi， Jiangsu province.

Nikon announced that it would end the operations of Nikon Imaging（China） Co. Ltd. （NIC） in Wuxi， East Chinas Jiangsu province， which has 2，285 employees.

Nikon Imaging （China） Co Ltd， which was established in Wuxi in 2002， was responsible for the manufacturing of digital cameras and lens units for digital cameras. The Japanese camera maker has two other digital camera production bases in Japan and Thailand.

“Due to the rise of smart phones， the compact digital camera market has been shrinking rapidly， leading to a significant decrease in the operating rate at NIC and creating a difficult business environment，” Nikon said in a statement.

Total shipments of digital cameras worldwide slid 31.7% to 24.2 million last year， according to the Camera & Imaging Products Association. Nikon alone reported that its sales from imaging products declined 26.4% to 383.8 billion yen （$3.4 billion） during fiscal 2017.

“The compact camera market has been shrinking rapidly， leading to a significant decrease in the operating rate at NIC and creating a difficult business environment，” said the announcement.

The move is part of Nikons restructuring plan， announced in November 2016， which entails a greater focus on high value-added products.

The shutdown of the Wuxi plant is based on Nikons global restructuring plan announced last November. Upon this， Nikon will focus more on high val-ue-added products such as optical glass and medical optical instruments.

Nikons sales subsidiary in Shanghai continues in full operation. Meanwhile， Chinas position as one of its most important markets in the world will remain unchanged， according to the announcement.endprint

A total of 2，268 employees working at NIC will be affected by the shutdown， according to Luan Xiaofei， media specialist at Nikon China. Since Nikon has been undergoing a company-wide manufacturing restructuring， there will be no possible internal transfers and all the related employees will be laid off.

Nikons problems are mainly due to the decline of compact digital cameras. According to the Camera & Imaging Products Association in Japan， more than 100 million compact digital cameras were shipped every year glob- ally during the peak time from 2008 to 2011. However， the shipments have now fallen to around one-tenth of that figure.

As a result， Nikon laid off 1，000 employees in Japan late last year， which was around 10 percent of the companys total headcount in the nation. Canon reported a 10.5 percent decline in its turnover for the 2016 fiscal year. Fellow Japanese camera maker Ricoh said in April that it might close its consumer digital camera business.

A Nikon China representative said that its five other plants， which make medical and industrial devices， will remain in production.

Its Shanghai-based imaging product sales unit， Nikon Imaging （China）， will continue full operations as “Chinas position as one of the most important markets in the world will remain un- changed，” the company said in the statement.

Sales of all Nikon products in China totaled 149 billion yuan in fiscal 2017， up by 7.7%， making it the companys second largest market after the U.S. During that period， China was the only overseas market to experience sales growth.

The Nikon representative said that it has started to dissolve employment contracts， and its arrangements with its workforce have been approved by the local government. The company for now has no plans to transfer the employees to its subsidiaries.

Change with the Times or Perish

Optics and imaging giant Nikon recently announced that it would close its subsidiary Nikon Imaging China Co as part of its restructuring， which began in November last year to cope with the shrinking demand for compact digital cameras.

“In recent years， however， due to the rise of smart phones， the compact digital camera market has been shrinking rapidly， leading to a significant decrease in the operating rate at the NIC and creating a difficult business environment，” Nikon said in a statement.endprint

Nikon digital cameras were once favored by professional photographers and laymen alike. A Nikon camera used to be regarded as a symbol of the users social and financial status， and it was the top choice of some professional photographers. It is sad therefore to see Nikon struggling to survive due to a sharp decline in its market share within a few years.

Some attribute Nikons predicament to smart phones， and Nikon itself thinks so. The popularity of smart phones is indeed one of the major causes of the dilemma facing digital camera-makers today， similar to what traditional camera-makers did when digital cameras became popular. But judging from the actual conditions， the popularity of smart phones is not the main reason for the sharp decline in the sales of digital cameras and their shrinking market share. Instead， the main reason is the structural reform in global manufacturing.

The global financial crisis exposed not only the bubbles in global financing and other areas， but also issues such as excessively fast development of the virtual sector， squeezing of manufacturing， deteriorating global supply-demand relationship， and low-quality and inefficient supply.

Challenged by Smart Phones

The emergence of intelligent products and their increasing popularity have really caused unprecedented problems for some traditional sectors. For example， mobile phones have been around for more than two decades， but cameras were still a necessity for people interested in photography until a few years ago because cell phones in the past didnt have inbuilt cameras. Smart phones， however， can perform the “exclusive functions” of cameras and have become extremely popular. Thats why， except for professional or avid photographers， people prefer to use a smart phone to take photographs.

Compared only in terms of intelligent functions， digital cameras are not inferior to smart phones. In fact， a digital cameras functions as far as photography is concerned are far superior to those of smart phones. However， a digital camera has no other functions besides taking photos， whereas smart phones are used to make phone calls， send text messages， surf the internet and participate in social media platforms such as WeChat. As such， ordinary consumers find a smart phone more convenient and cost-effective than a digital camera.

Other products， too， could meet the fate of digital cameras if they are not developed to suit the requirements of consumers， and some existing vocations would become history if people engaged in them do not acquire new skills and add value to their profession in this fast developing “age of intelligent products”.

The “intelligent era” will have a huge impact on other sectors， too. Industries and products developed on the strength of “traditional” technologies have proven most vulnerable to intelligent technologies. A new industry， especially if its products and their functions are popular， has always put huge pressure and created big challenges for existing industries， and industries that fail to transform and upgrade， be it for a lack of foresight or proper planning， will eventually be eliminated from the market.endprint