Disruptive Innovation in Photography

Photography is a creative activity many of us amateur photographers enjoy while we are away from “work”, or getting away from the “business world” while our creative side of brain at work. However, underneath the surface of the creative process is every bit as business as any other businesses if not more.?

Photography business, a $20 billion global market, has in fact been a very brutal business that is continuously being recreated by disruptive innovation. On the one hand, the industry has gone through the same steady and predictable growth like many other industries for many decades until early this century. We saw similar market shift like many other industries from the saturated mature markets to developing markets and became more dependent on the growing consumers in China. On the other hand, few industries has gone through the complete rebirth as the photography industry did by disruptive technologies.

The industry saw the brilliant innovations such as Polaroid and early adoption of digital technology, with the former failing to take over the world as was expected while the latter turned the industry upside down including the demise of Kodak which originally invented digital camera in 1975. Both cases have been studied extensively in many business school strategic management classes.

The industry today is again facing even bigger challenges with the emergence of mirrorless camera which is disrupting the ever shrinking SLR camera market while at the time phone cameras are improving leaps and bounds with each new generation. Although amateur photographers like myself who have invested in either Canon or Nikon have significant incentive to stay with the current SLR platform, it is a matter of when not if that mirrorless will become the standard platform in the near future for the amateur photographers.

Kodak’s core competence in film value chain did not translate into competence to compete in the digital era, mostly due to strategic decision the company made. Polaroid, on the other hand, was well ahead of its time in recognizing that people want instant photos, yet failed to transform the insights and early success into the digital world. Hindsight is twenty-twenty but what could they have done differently? More recently, introduction of digital phone camera first by Sharp or mirrorless camera by Eason did not afford the first mover advantages in either market. Based on Apple’s advertisement, would you say I-phone is a phone with camera or a camera with a phone? Is the rush to mirrorless cameras by all the traditional camera manufacturers trying to solve a problem of yesterday? In addition, the emergence of drone cameras which offer an alternative approach from the traditional long lens or wide angle lens, has created another threat to the expensive lens business for the traditional players.

The status of the industry can be summarized as the follows:

• The Good: Photography is getting more popular than ever before. The shipment of Smartphones with built in camera surpassed 1571 millions in 2020, which would be 12 times as higher as the peak of 121 millions in 2010 if I were trying to fit in the graph.
• The Bad: First movers by Sharp in digital camera phone or Eason for mirrorless camera did not capture the advantages.
• The Ugly: Total shipment of digital cameras was 8.89M for 2020, including 2.93M of mirrorless cameras. Shipment is down 92.5% from the peak shipment of 121M in 2010. About 0.57% of consumer cameras were sold as dedicated cameras including 0.2% of newest innovation - mirrorless cameras.

Cycle for disruptive innovation is getting shorter and often from outside of the core businesses. It is getting increasingly difficult to anticipate who would be the competitors in a dynamic world.?In addition to the fundamental changes to the goods and services including the underlying technologies, many strategic innovation are also driven by business model innovation that can completely transform the industry landscape just like Amazon did for bookstores or Netflix did for video rentals. I would like to end with a Chinese saying which is a good reflection of the industry: The mantis is trying to catch a cicada, not realizing that an oriole is lurking right behind (螳螂捕蝉，黄雀在后).

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