Author: Rocky Swift
TOKYO (Reuters) – For years, Japan’s Fujifilm has been pivoting away from its legacy camera business to focus on healthcare. But thanks largely to the TikTok crowd, his retro-themed X100 digital cameras are now a roaring success, boosting his profits.
Fujifilm is struggling to meet demand for a $1,599 camera that social media fans in their 20s prize for its looks and high-end features.
The X100V was so popular that in the fiscal year ending in March, the imaging division, which includes cameras, was the biggest contributor to the company’s record-high profits, accounting for 37% of operating profit in fiscal 2023. versus 27% a year earlier.
After selling out last year, the company increased production in China to double the volume of the VI launch, which debuted in March, said Yujiro Igarashi, manager of Fujifilm’s professional imaging group. He declined to provide details about the increase in production or sales.
“We found that orders far exceeded our forecast,” Igarashi said. “In that sense, I was surprised that even though we doubled our preparation, it still failed.”
Founded 90 years ago, Fujifilm competed with film industry leader Kodak for decades before finally overtaking it in sales in 2001. But the triumph was short-lived as the film industry soon collapsed and digital cameras became a standard feature of mobile phones.
To survive, Fujifilm used its expertise in film chemicals to move into healthcare applications. Domestic competitors Canon and Olympus have also adopted this strategy. Fujifilm didn’t abandon its cameras, but the following year cut 5,000 jobs in its film division and moved most production to China.
During the COVID years, Fujifilm doubled down on its efforts to produce antiviral pills and vaccines, but now cameras have put the spotlight back on it.
The company forecast sales growth will slow to 2.2% in fiscal 2024 from 14.5%, while operating profit in the segment is expected to fall 1.9%, analyst estimates being conservative at best.
“We see downside risk in healthcare and business innovation, but strong upside for imaging,” Jefferies analyst Masahiro Nakanomio wrote in a June 6 report.
SAY CHEESE
The X100 was born in 2011 in an attempt to save Fujifilm’s professional camera division, but its appeal is rooted in nostalgia, camera enthusiasts say.
“The look of the device was quite revolutionary, and it’s ironic because it simply imitated a film camera,” said Mark Condon, founder of the camera website Shotkit.
According to Tokyo-based cultural writer David Marks, a key concept in retro technology is “friction,” where the user connects with a product through physical touch and interaction.
“Smartphones make it so easy to take photographs that photographs have become devalued,” said Marks, author of Status and Culture.
“Having physical cameras again, having to develop film, etc. again increases friction, which puts a sense of value back into casual photography.”
With travel resuming after the pandemic, demand for cameras has skyrocketed, with influencers on Instagram, TikTok and other social media platforms turning the X100 into a status symbol.
“It’s important to have a beautiful camera that inspires you to pick it up and shoot with it,” said Benjamin Lee, who uses @itchban on TikTok, where he has more than 600,000 followers. “The X100 series is essentially a fashion accessory that you wear, as well as a great camera.”
Availability remains an issue.
Used X100s are sold at auction for multiples of their list price, and there are online message boards for fans waiting to order.
Fujifilm chief executive Teiichi Goto hinted last month that he was happy to maintain limited supplies, pointing to cameras from German brand Leica as a model for maintaining premium prices.
“It would be very unfortunate to produce too much and cut prices,” Goto said at the company’s full-year earnings presentation on May 9.
But long waiting lists and high prices could drive buyers to rivals such as the Canon G7X and Ricoh’s GR series, influencer Lee said. This week, Ricoh also announced the release of its first film camera in about 20 years, the Pentax 17.
Imaging group manager Igarashi admitted that production volumes are an obstacle, but the X100’s design and complexity make it difficult to produce at scale.
“We’re trying really hard to increase the number of people, the number of production lines and so on, but it’s not happening as quickly as you think,” he said. (This story has been moved to remove an extra word in paragraph 1)