Written by Rocky Swift
TOKYO (Reuters) – For many years, Japan’s Fujifilm has moved away from the legacy camera business to focus on health care. But thanks in large part to TikTok’s audience, its retro-themed X100 digital cameras are now a massive hit, boosting its bottom line.
Fujifilm is having a hard time meeting demand for the $1,599 camera, which is favored by 20-somethings on social media for its advanced looks and functionality.
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 — the unit accounted for 37% of operating profit in fiscal 2023, up from 27% the year before.
After selling out last year, the company ramped up production in China to double the launch volume of the VI camera, which debuted in March, said Yujiro Igarashi, director of Fujifilm’s professional imaging group. Igarashi declined to provide details about increased production or unit sales.
“We found that the orders far exceeded our expectations,” Igarashi said. “In that sense, I was surprised that even though we doubled our preparations, it wasn’t enough.”
Founded 90 years ago by Fujifilm, it rivaled film industry leader Kodak for decades before finally besting it in sales in 2001. But the triumph was short-lived, as the film industry soon collapsed and digital cameras became a standard feature on cell phones.
To survive, Fujifilm leveraged its expertise in film chemicals to pivot into health care applications, a strategy also adopted by domestic rivals Canon and Olympus. Fujifilm didn’t give up its cameras, but it cut 5,000 jobs in its film division and moved most production to China the following year.
During the coronavirus years, Fujifilm has doubled down on its antiviral pills and vaccine efforts, but now cameras have put it back in the spotlight.
The company expects imaging sales growth to slow to 2.2% in fiscal 2024 from 14.5%, while operating profit in the segment is expected to decline 1.9%, estimates that analysts say are conservative at best.
“We see downside risk to healthcare and business innovation guidance, but significant upside to imaging,” Jefferies analyst Masahiro Nakanomio wrote in a June 6 report.
Say cheese
The X100 was created in 2011 in an attempt to save Fujifilm’s professional camera division, but its appeal is rooted in nostalgia, camera enthusiasts say.
“It looked pretty revolutionary, which is ironic because it’s just a simulation of a film camera,” said Mark Condon, founder of camera gear site Shotkit.
One of the key concepts in legacy technology is “friction,” where the user joins the product through physical touch and interaction, according to Tokyo-based culture writer W. David Marks.
“Smartphones make taking pictures so easy that they have become devalued,” said Marks, author of “Status and Culture.”
“By using physical cameras again, having to develop film and so on, it adds friction again, which adds a sense of value to casual photo shoots.”
As travel resumed after the pandemic, demand for cameras soared, and influencers on Instagram, TikTok and other social media sites turned the X100 into a social status symbol.
“It’s important to have a good-looking camera that inspires you to want to take it out and shoot with it,” said Benjamin Lee, who goes by @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 being a great camera.”
Availability is still an issue.
Used X100s are selling for multiples of their listed price on auction sites, and there are online message boards for fans waiting to place orders.
Fujifilm CEO Teiichi Goto hinted last month that he was happy to keep supply limited, pointing to German Leica brand cameras as a model for maintaining premium value.
“It would be very unfortunate if we made too much and lowered the price,” Goto said in the company’s year-end earnings presentation on May 9.
But long waiting lists and steep prices may drive customers to competitors, such as Canon’s G7X series and Ricoh’s GR series, the influencer told me. This week Ricoh also announced the launch of its first cinema camera in nearly 20 years, the Pentax 17.
Imaging Group Director Igarashi admitted that production volume is an obstacle, but the design and complexity of the X100 makes it difficult to manufacture on a large scale.
“We are trying hard to increase the number of people, the number of production lines, etc., but it is not taking off as quickly as we think,” he said. (This story has been rewritten to delete a strange word in paragraph 1)
