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How Canon is fighting the smartphone

Saturday, 23 February 2013 - 9:00am IST | Place: Mumbai | Agency: dna

The smartphone boom, complete with HD front-end and back-end cameras, is giving a tough time to traditional digital imaging players like Nikon and Canon.

The smartphone boom, complete with HD front-end and back-end cameras, is giving a tough time to traditional digital imaging players like Nikon and Canon.

Alok Bharadwaj, executive vice-president of Canon India – the number two player in the Indian digital imaging market, shared some insights about how the company is battling the challenge, which earlier caused downfall of camera giant Kodak.

“In fiscal 2012, the photography business was valued at Rs 3,500 crore. Out of revenues of Rs 1,200 crore, 45% came from SLRs – a business which continues to grow by 30% year on year and 25% came from compact cameras – which has seen flat growth in fiscal 2012. No doubt, our compact cameras business is undergoing cannibalisation from smartphones,” said Bharadwaj.

So how to avert the Kodak moment?
Bharadwaj said, “Canon is launching more wi-fi enabled compact cameras – which have larger bandwidth than 3G-enabled smartphones. Besides, cameras still have better picture quality in terms of depth and size due to a better processor and optical zoom. Thus, while smartphones will continue to be multi-functional, we will continue to pack our cameras with more innovative features – like cameras for cinematographers.”

Also, Canon is planning to launch medical imaging solutions for ophthalmology and digital radiography in India by 2014, and has set up 100 experience stores – called ‘Canon Image Square’ in 50 towns, with plans to start 50 more this year.

Meantime, its printing business is also undergoing transformation as rising costs and premium quality requirements has given rise to managed print services.

Canon has 75 large clients, including Maruti, MindTree, JP Morgan, MetLife and Dr Reddy’s, which typically spend Rs4-70 lakh per month for the managed print solutions (payment on an outcome-based model), as compared to `2 crore for around 100-plus box printers.

This amounts to savings of 20-30% for the companies. Canon expects to close deals with 25 additional large clients by the year-end.

Bharadwaj said, “While the box printing industry has been struggling with single-digit growth, transforming our business model from merely selling printers to offering end-to-end managed print services to organisations has helped us grow 22% since the past three years.”

In 2013, Canon believes its office imaging solutions business will reach Rs500 crore.

Canon now sends consultants to study an organisation’s existing machines and help it upgrade to multi-function devices. It has hired 300 engineers and 100 sales people in the top eight cities to manage this solution with plans to expand the offering to 10 cities by end-2013.

It is also rolling out these services through 120 dealers in 80 towns with aim to get at least 25 SME clients in the first year.

Canon has also introduced a security feature in such printers, which requires a biometric code to be punched in, each time a print command is given. It is looking to get into digital book publishing, and is hoping to get its first large order this year, with revenues from commercial printing expected to touch Rs100 crore this year.

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