Nikon Says It's Leaving Film-Camera Business

By Mike Musgrove
Washington Post Staff Writer
Thursday, January 12, 2006

Nikon Corp., one of the flagship brands for amateur and professional photographers alike, said yesterday that it will stop making most of its film-camera products to concentrate on marketing digital cameras.

"Nikon Corporation has made the decision to focus management resources on digital cameras in place of film cameras. This decision will allow Nikon to continue to develop products that match the demands of an increasingly competitive market place," the Japan-based company said in a statement posted on a Web site for its British division. The statement said more than 95 percent of its British business is now in the digital market.

Nikon spokesmen in the United States at first declined to comment on the company's British statement, which was linked to by several technology-oriented Web sites. They later issued a similar version that said the film-camera line is being "reshaped" to allow "more of Nikon's planning, engineering and manufacturing resources to be focused on the digital products that now drive our thriving industry."

Nikon said it will immediately discontinue making all but two of its film cameras, all large-format Nikkor lenses and enlarging lenses, and several manual-focus Nikkor lenses. It expects to sell the last of those products this summer. Nikon will continue to manufacture and sell two film cameras, the professional-level F6 and the FM10 for the amateur market, and a few manual-focus lenses for those cameras.

The company's U.S. Web site currently shows a lineup of nine single-lens-reflex film cameras, including the F6 and FM10.

"To use a car industry analogy, it would be the same as Ford saying it is no longer producing an internal-combustion engine. It's really that revolutionary," said Mark Greenberg, a professional photographer who has shot for National Geographic, Life and this week's People magazine. "Film is done. Digital rules the world now."

Analyst Christopher Chute of technology research firm IDC said that the Nikon announcement was the first he has heard of a major camera company moving so completely out of the film camera business but that he would not be surprised if other camera makers also do so.

"It's a big shift," Chute said. "When push comes to shove, it's not going to make any sense for some of these guys to focus on film cameras anymore."

A decade ago, digital cameras cost thousands of dollars, required technical proficiency to use and offered unclear images that took up large amounts of space on expensive memory cards. As prices for digital cameras and memory cards dropped year after year -- and started to beat the prices and picture quality offered by film cameras -- digital cameras rapidly took over the market.

Digital cameras began to outsell film cameras in the past two years, according to analysts. So ubiquitous are digital cameras now that IDC has predicted that 90 percent of the cell phones sold this year will have such cameras built in.

Chute said photography has lost its identity in the digital era and become a subset of the consumer electronics industry. Camera makers such as Eastman Kodak Co. have experimented with gadgets such as digital cameras that double as MP3 players. Electronic gadgets such as the iPod digital music player and the new Xbox 360 game console now come with features for viewing digital photo libraries.

For years, analysts predicted that the advent of digital imaging could mean the demise of Kodak, a U.S. company that helped invent photography, since consumers would no longer need film.

Kodak has worked hard to reinvent itself. After years of retooling -- and laying off thousands of workers in its film division -- Kodak is No. 1 in the U.S. digital-camera market, closely followed by Canon Inc. and Sony Corp. Kodak still sells reloadable film cameras outside the United States in emerging-market countries such as China, India and Brazil.

The first Nikon film camera appeared in 1948, though the company's history goes back nearly to the turn of the 19th century, when it made optical glass and microscopes. An early Nikon digital still camera, developed with Fuji Photo Film Co., appeared in 1995. Recent Nikon models helped pioneer the use of wireless technology in digital cameras to allow users to upload and print their photos.

Chute said Nikon's customers have tended to be affluent photography enthusiasts -- a class of user that has been almost entirely persuaded to switch to digital cameras in recent years.

Paul Worthington, an analyst at photography industry research firm Future Image Inc., said the Nikon announcement was "noteworthy but not surprising."

"I don't think film will stick around in any marketable way in the next few years," he said.

Worthington said that when digital photography emerged as a hot consumer category, most camera makers said film would survive in the long run, with different types of cameras meeting different needs. But that has changed recently, he said, as cameras improved and enthusiasts turned to digital cameras for all of their photography needs.

"I don't know of any company that makes film cameras saying, 'We're in this for the long run,' " Worthington said.

© 2006 The Washington Post Company