Konica Corporation Business Information, Profile, and History

Company Perspectives:

From its origins as a photographic materials supplier more than 120 years ago, Konica Corporation has grown into a leading company in the global photographic and information imaging industries that is recognized for the excellence and innovativeness of its products.

While emphasizing a "customer first" policy, Konica aims to synthesize advanced technologies to develop environment-friendly products that respond accurately to diverse customer needs. The Company manufactures a wide range of products, including photographic film and paper, photo-related industrial equipment, business machines, cameras, optical products, digital still cameras, and magnetic products.

Konica has adopted the phrase "Touching Your Heart" to reflect its vision of creating inspiring products and services that contribute to the enrichment of people's lives.

History of Konica Corporation

Konica Corporation produces a wide range of products, mainly within the imaging sphere. Konica manufactures and markets photosensitive products, including color and black-and-white film and paper, and photofinishing equipment and chemicals; cameras and optical products, including compact 35mm and digital still cameras, and plastic lenses; business equipment, including copiers, fax machines, and printers; medical products, including medical imaging film and automatic processors, laser imagers, and imaging cameras; graphic arts and industrial products, including platemaking film, typesetting paper, presensitized plates, color-proofing systems, and image processing systems; and magnetic products, including videotapes and floppy disks. About 45 percent of the company's revenues are generated domestically, with North America accounting for about 25 percent, Europe 17 percent, and Asia and other regions 13 percent. Although it is not the leader in any one industry, Konica remains highly competitive in several.

Late 19th-Century Beginnings

The company was founded in 1873, during the first decade of Japan's industrial revolution, by Rokusaburo Sugiura, who suggested that his employer, the Konishiya apothecary in Kojimachi, Tokyo, begin to sell the new cameras and photographic materials that were being imported from Europe and the United States. The apothecary owners consented and gave Sugiura permission to use the Konishiya name. This was seven years before Kodak was founded.

In 1876 Sugiura changed his name to Rokuemon Sugiura VI to continue the succession of his father's name, moved the business to Nihonbashi, Tokyo, and renamed it Konishi Honten. In about 1880, Rokuosha, a subsidiary company, became a subcontractor for Konishi, producing cameras for commercial applications. By 1882 Konishi had established three factories for manufacturing lithographic materials and equipment, and matte paper for picture mounting and had begun to produce box cameras. By 1890, Konishi expanded camera production from an on-order basis to planned production, and four years later, was producing a variety of studio, field, and folding cameras.

In 1902 a Rokuosha factory was established to manufacture photographic paper and dry plates in what is now Shinjuku, Tokyo. A year later, the company began to market the box-shaped Cherry hand camera, the country's first name-brand camera. Also in 1903, Konishi introduced the Sakura--or cherry blossom, the Japanese national flower--brand name on Japan's first domestically produced photographic paper.

During the next five years, the Sakura brand name was to be found on many new Konishi cameras, including the Sakura Honor Portable, a box camera, and the Reflex Prano, the first Japanese large format single lens reflex (SLR) camera. In 1909 Konishi introduced three new camera models: Pearl, Lily, and Idea, all known for their quality construction.

World War I, which began in 1914, stimulated the Japanese economy and forced many industries to become less dependent on foreign goods. The importation from Germany, for example, of barium compound-coated paper and paper base was barred during the war, and Konishi's Rokuosha developed a method of producing photographic base paper in cooperation with Mitsubishi Paper Company. At the close of the war in 1919, Japan's total industrial production had almost quadrupled that of the 1914 level, and in the same period, the size of the industrial workforce had more than doubled.

A 1916 Konishi catalog reported that the company was exporting the Lily Number 2 camera to Great Britain. This was considered a matter of considerable pride because Great Britain was regarded as the birthplace of photography. During the next ten years, the company developed a variety of new camera models, photographic papers, and processes.

Konishi Honten was renamed Konishiroku in 1921 and reorganized as a limited partnership. On September 1, 1923, the company's headquarters was completely destroyed in the Great Kanto Earthquake. The structure was rebuilt very quickly, and Konishiroku was back in business by the next month.

In 1925 Konishiroku received orders for gun cameras from the Japanese Imperial Navy Command. Rokuosha developed the first domestically produced photographic lens for the navy's gun cameras that year. Known as the Hexar F/4.5--Hexar was taken from the lineage of Rokuemon Sugiura: roku means six, or hexa--it was a copy of a lens produced by Thornton, a British company. Although Japanese cameras had included imported photographic lenses up to this time, the Japanese Navy was determined to achieve self-sufficiency in defense matters and had urged the production of such a lens.

In the same year, the company introduced the Pearlette, the first of a well-received line of cameras that would be produced for many years. It was the first metal-bodied camera produced by Konishiroku and was considered innovative, even though it was modeled after Kodak's vest-pocket camera. To publicize the camera and promote photography, Konishiroku formed the Pearlette League, a club for those whose first camera was a Pearlette. The club offered publications, contests, and a variety of other activities.

During the next ten years, Konishiroku introduced a variety of new products. In 1929 it began to market Sakura brand film, one of the first films produced in Japan. The company introduced its first movie projector in 1931 and its first movie camera in 1935.

Military Production: 1930s--44

In 1936 the company was registered as a publicly owned corporation with the name Konishiroku Honten Company. In 1938, as the likelihood of war increased, the Japanese government placed restrictions on cameras produced for consumers, and Konishiroku directed its major efforts to military products. It developed two types of ultra-compact aerial cameras for the Japanese Army in 1939 and 1940. In 1940, five years after Kodak introduced its Kodachrome color film, Konishiroku unveiled its Sakura natural color, Japan's first color film.

Rokuemon Sugiura VIII, grandson of the company's founder, became president of Konishiroku in 1941. Two years later, the company changed its name to Konishiroku Photo Industry Company, and established a research center. In 1944, under an industrial readjustment order, Konishiroku amalgamated with Showa Photo Industry.

In 1945 the company's Yodobashi factory, warehouse, and research center were damaged by U.S. air raids. At the end of the war, in September, all factories that had been taken over for military production reverted back to the manufacture of consumer goods. Despite a severe shortage of parts, Konishiroku resumed production of several cameras.

Postwar Innovation and Growth

Before the war, Konishiroku had developed and built a prototype of the Rubikon, a general use camera using 35-millimeter film. The camera had not yet been put into production. When war broke out and the company's plants were directed entirely to the manufacture of cameras and optical instruments for military applications, the Rubikon was converted into a camera for taking X-ray pictures and was used for medical applications. After the war, Konishiroku returned the Rubikon to its original design but decided to change its name, as the old name was too much like the Rubicon, the river Caesar crossed on his march to seize Rome. As the name was considered unsuitable in a time so recently removed from war, the name of the camera was changed to Konica--from "Konishiroku" and "camera." Thus was the company's first 35-millimeter camera introduced in 1947.

In 1947 Konishiroku was listed as one of Japan's five leading photographic-lens makers and one of three camera-shutter producers. Konishiroku produced approximately half of all Japanese cameras. Materials such as goat skin for camera bellows, sheet steel for shutters, and piano cord for shutter control were all in short supply, but camera companies were finding substitutes for these materials.

In 1948 The Dream, the first Japanese color motion picture, won an award from the Japanese Motion Picture Technology Institute. The film had used Sakura color film. The following year, Japan experienced a deep economic depression. Many small- and medium-sized businesses failed and unemployment was high. Only the Korean War, beginning in June 1950, rescued the economy, with large special procurement orders that stimulated many industries, including those making cameras and optical instruments.

For Konishiroku, the 1950s were a time of growth and continued product refinement. In an effort to increase its U.S. exports, the company established Koniphoto Corporation in Philadelphia, Pennsylvania, in 1956, to market its cameras and photographic materials. That same year, the company won the Deming Prize for Industrial Efficiency for the excellence of its quality-control activities in upgrading productivity. W.E. Deming, a U.S. specialist in statistical quality control, had spurred the development of quality control in Japan in a series of visits to Japan that began in the early 1950s.

In 1962 the company moved Koniphoto from Philadelphia to New York City and opened the Konica European Center in Hamburg as a marketing outpost. The following year, it closed its Yodobashi factory and built a large, state-of-the-art factory in Hachioji, a Tokyo suburb. The first Japanese company to produce X-ray film, Konishiroku had begun its manufacture in 1933 under the Sakura name and produced its first X-ray processor in 1963. The following year, it unveiled Sakura color negative film, the industry's fastest color negative film. In December 1965, after overcoming a variety of technical challenges, Konishiroku introduced the Konica Autoreflex, the industry's first automatic-exposure 35-millimeter SLR.

In 1967 Konishiroku suffered heavy losses caused by the production of defective color film and its inability to increase its market share. Up to this time, members of the company's top management had been selected from the controlling family; but in 1968, a new management team was put in place to turn the company around, and Ryousuke Nishimura became the new president. The new team was successful in slowly diversifying the company into fields that made use of technologies related to cameras and optical instruments and in making the company's products more competitive. Planning for new products became market-oriented, with management collecting appropriate market information before undertaking development of a new product. The new management team also improved employee training and personnel selection, as well as employee-evaluation methods.

Rapid Expansion: 1970s

The 1970s were a period of rapid expansion for Konishiroku. In 1971 the company introduced the U-Bix 480, its first photostatic plain paper copier. By 1978 plain paper copiers would account for 23 percent of the company's total sales. Many of Japan's camera companies had begun to produce small copiers. Their expertise in optics and their existing distribution networks aided this diversification.

Konishiroku celebrated its 100th anniversary in 1973 and began to use the Konica name on more of the products it sold in the European and North American markets. In the same year, the company established a subsidiary called Konishiroku Photo Industry (Europe) in Hamburg to market photographic products. The year 1973 also saw the installation of a new company president, Hiroshi Tomioka.

In 1975, a year of growth and change for Konishiroku, the company introduced the Konica C35 EF, the first of a new generation of compact cameras with a built-in electronic flash. U-Bix copiers were well received, with sales reaching the 50,000-unit mark by 1975. That same year, the company exported its first photographic-paper-making plant to the Soviet Union.

Konishiroku introduced the Konica C35 AF, a camera featuring an automatic focusing system, in 1977. Although more than a dozen camera manufacturers had signed agreements with Honeywell to use its automatic-focus technology, Konica's autofocus camera was the first to reach the market. Coupled with the introduction two years earlier of the Konica C35 EF with its built-in flash, Konica was regaining its reputation as an innovator.

In 1978 Konishiroku moved its headquarters to Tokyo's Shinjuku ward and opened a branch office in Great Britain to market cameras and photographic materials. That same year, the company was one of four Tokyo-based companies accused by Minnesota Mining and Manufacturing Company of dumping color photographic paper in the United States at prices considerably below what they charged in their home markets. In June 1979, toward the end of his tenure as president, Hiroshi Tomioka told Focus Japan that because his company "had bought very little equipment during its business slump in the late 1960s, it now has little to lose from carrying out a radical scrap-and-build operation to utilize advanced technologies."

In 1979 Konishiroku established a photo-products marketing subsidiary, Konica Corporation (USA), the first foreign operation to sport the popular Konica name. The company also introduced the Konica FS-1, the camera industry's first motorized, auto-loading, and auto-winding compact SLR camera. Nobuhiko Kawanto became the company's new president that year.

In 1979 Konishiroku established a photo-products marketing subsidiary, Konica Corporation (USA), the first foreign operation to sport the popular Konica name. The company also introduced the Konica FS-1, the camera industry's first motorized, auto-loading, and auto-winding compact SLR camera. Nobuhiko Kawanto became the company's new president that year.

Konishiroku's most notable activity in 1979 was the purchase of its first shares in the U.S.-based Fotomat chain of photofinishing stores, which had experienced a drop in profits the previous year. In an attempt to gain an established channel to the U.S. markets for film and photographic-paper, Konishiroku purchased eight percent of Fotomat. In return, the photofinisher agreed to sell Konishiroku film under the Fotomat name and to purchase its photographic printing paper from the Japanese company. The company increased its stake in Fotomat to 20 percent in 1982, to about 62 percent in 1985, and completed its acquisition in 1986. Fotomat had begun to lose money by 1982, suffering from shortsighted business decisions, overexpansion, and increased competition from mass merchandisers who set up their own photo laboratories and from minilabs, which provide customers with prints in an hour. By 1988, Fotomat had dwindled from a peak of 3,850 kiosks and stores to 1,700 outlets and was reorganized. It also somewhat belatedly recognized the importance of minilabs and began converting many of its kiosks and stores to while-you-wait developing centers.

The price of silver, an essential ingredient in films, skyrocketed in 1980, and Konica, like other film producers worldwide, was forced to repeatedly raise its film prices. Early that year, both Konica and its principle domestic competitor, Fuji Photo Film Company, were investigated by Japan's Fair Trade Commission for conspiring to fix X-ray film prices. That same year, Konishiroku announced it would go into the audio- and video-magnetic-tape business with Ampex Corporation.

In the early 1980s, Konica obtained exclusive rights to sell Polaroid products in the Japanese market. It also established subsidiaries in both Australia and Canada to market cameras, photographic materials, and magnetic products.

Megumi Ide was named company president in 1983, the same year that Konishiroku introduced the Konica AF3 camera, with the company's own infrared autofocus system replacing the Honeywell autofocus system. The company introduced its first video camera that year, the Konica Color CV, which was touted as the world's smallest and lightest video camera for home use.

Business Machines Division Expansion: 1980s

Konica's business machines division picked up steam in the 1980s. The company acquired a 30 percent interest in Royal Business Machines in 1984 and agreed to sell its plain-paper copiers under Royal's name. The following year, it agreed to start supplying Olivetti with copiers that would be marketed throughout Europe under the Olivetti name. In effect, Konica would end up competing with itself in the European copier market. The company also agreed to export a copier plant to China that year.

The year 1986 saw much activity for Konishiroku. It purchased the balance of Royal Business Machines' stock, and it changed that company's name to Konica Business Machines U.S.A., Inc. It entered into an agreement with IBM to sell that company's high-speed copiers under the Konica name worldwide. Konishiroku introduced a dramatic improvement over conventional floppy discs, the super-high-density 5.25-inch floppy disc and drive system with a ten-megabyte memory capacity, which it had developed and would produce and market in cooperation with Omron Tateisi Electronics Company and Citizen Watch Company. It introduced the Konica Color 7 copier, a reasonably priced, full-color copier that produced copies said to be difficult to distinguish from color photographs.

The company also established two new business division production plants: one in Lüneberg, West Germany, in 1987, for manufacturing plain paper copiers and the other in Maryland, in 1990, for manufacturing copier supplies. Between 1984 and 1989, the company acquired business machine sales agencies in several new locations, including the United States, Australia, Italy, and Belgium.

Japan's leadership in facsimile terminals can be attributed to its strength in copier technology. Konica entered this market a bit late, offering its first facsimile terminals in 1988. It is interesting to note how the Japanese government aided the early demand for facsimile machines. Japan was one of the first countries to allow facsimile machines to be connected to regular phone lines, and the Japanese Ministry of Justice approved facsimile copiers as legal documents when the machine's technology was still in its nascent stage.

Konishiroku introduced a high-quality aspherical plastic pick-up lens for use in compact disc players in 1984, the same year it established Konica Technology, in Sunnyvale, California, a research, development, and marketing subsidiary for high-tech products. It also introduced its first minilab system that year, the Nice Print System-1, the world's first washless print-processing minilab. The revolutionary system required no water hookup and needed only to be plugged in to an electrical outlet to operate. Competitors soon rushed to market similar systems. By reducing space and overhead requirements, these systems led to a dramatic increase in the number of minilabs.

In the 1980s Konishiroku's problems with Fotomat, its inability to capitalize on its washless minilab system, and an increasingly competitive copier market all contributed to Konishiroku's financial difficulties. Between 1982 and 1985, Konishiroku's sales rose 24 percent but its net income for the same period fell by 17 percent. To aggravate the situation, beginning in 1986 the rising yen began to play havoc with Konica's profits. Fluctuating exchange rates narrowed the profit margin of the company's exports.

In 1985 Konica began construction of the Kobe plant, a totally automatic production facility for the design and production of computer peripheral equipment and printers. Konica began to market its first laser printers in 1990.

Change to Konica: 1987

In the fall of 1987, Konishiroku changed its name to Konica Corporation. Although the company had been unifying its product and brand names in European and North American markets since 1973, many people, even in Japan, did not know that Konishiroku produced U-Bix copiers and Sakura film. By unifying its corporate and product names, the company raised its corporate profile worldwide. It also increased its advertising budget, and sponsored athletic teams, such as the U.S. rhythmic gymnastics team, and began to fly a blimp bearing the Konica name in Japan, as did competitors Fuji and Kodak. The company also funded the Konica Gallery, a Japanese gallery in the British Museum that opened in 1990. As Konica claimed just 20 percent of the Japanese film market, such efforts were needed at home as well as internationally.

Konica introduced two important new products in 1987: its first still video system, which recorded images on a magnetic disc for immediate viewing on a television set, and the world's fastest color negative film, the Konica SR-V3200, which doubled the light sensitivity of any film on the market of that time. That same year, the company announced it would become the first Japanese producer of photosensitive materials to set up a manufacturing plant in the United States. In 1989 Konica Manufacturing U.S.A. opened in Whitsett, North Carolina; it produced color photographic paper.

In 1987 Konica's medical products division began to sell a desktop system for analyzing blood, at the rate of 80 patients an hour; an X-ray developing system that cut developing time to 45 seconds, half the time taken by other techniques; and the Konica Direct Digitizer, which enabled the digitization of radiographic images.

Konica was one of seven Japanese companies accused of dumping by the European Community Commission in 1988. The companies were accused of making photocopiers in Europe using mainly Japanese parts in an attempt to avoid an antidumping duty. Konica responded that 40 percent of its copier parts were manufactured locally.

Konica introduced two new cameras in 1989. The Kanpai--Japanese for "toast' or "cheers'--with a voice-activated shutter, was intended for use at parties and other social events and received a favorable market reception. The Konica A4, the world's smallest and lightest fully automatic compact camera, won the European Compact Camera of the Year Award for 1989-90. That year, Konica also introduced the SR-G series of film, a new series of color negative films offering a high level of image quality and speed.

1990s and Beyond

The early 1990s saw the emergence of the single-use, or "disposable' camera. First marketed by Fuji in 1986, Konica began selling its first single-use camera the following year. By 1990 Konica was able to sell seven million of the increasingly popular products, far behind the 30 million sold by Fuji but more than enough for a solid second place. The company introduced several new models of single-use cameras in the 1990s, including the Torikkiri Mini (1992); the Torikkiri Motto Mini Flash Sepia (1997), which produced sepia-toned monochrome prints; and the Konica Issimo (1998), which featured a pop-up flash and the Advanced Photo System (APS). APS had been developed in the mid-1990s by a Kodak-led consortium that included Fuji but not Konica; it offered the ability to select from three photo sizes (4 by 6 inch, 4 by 7 inch, and a panoramic 4 by 10 inch) as photos were taken, and for non-single-use cameras, easy film loading. Single-use cameras came under criticism from environmentalists concerned about the wastefulness inherent in their design. But the photo companies, including Konica, quickly introduced product modifications to facilitate the recycling of various parts of the assembly, and instituted recycling programs at their company-owned photoprocessing laboratories.

Continuing its history of innovation, Konica in 1994 unveiled the ECOJET Nice Print System, the first minilab system to use tablet-form photofinishing chemicals. The system eliminated the need for liquid chemicals, which were expensive and difficult to transport, required a complicated mixing process, and had to be carefully handled by minilab operators. It also reduced both the chemical replenishment rate and the level of effluents. As digital technologies continued to replace analog ones in the 1990s, Konica began marketing in 1998 of the Konica Digital Minilab QD-21 System, an ultracompact, fully digital minilab.

In 1995 Konica introduced the Konica KL-2010, a full-color laser printer. Also that year came the debut of the Konica 7050 digital workgroup document system, which doubled as a 50-copies-per-minute digital laser copier and a 50-pages-per-minute laser printer--the latter when connected to a computer or network. By the late 1990s, through the success of this and other new products, Konica had become the U.S. market leader in high-speed digital copiers. In late 1999 the company stopped producing analog copy machines altogether in order to focus on developing and manufacturing digital models.

Back on the camera front, Konica was increasingly active in the APS scene. In 1996 the company introduced the Konica Super Big Mini MB-S100 camera. The following year Konica brought to market the Konica Revio, which featured a power zoom lens and was at the time of its release the world's smallest and lightest APS camera. Also in 1997 Konica entered the burgeoning market for digital still cameras through the release of the Q-M100. The camera used a memory card able to store from ten to 50 images, depending on the resolution, and was capable of capturing extremely high quality images.

Konica was profitable for most of the 1990s, until posting a loss of ¥3.17 billion (US$25.5 million) for the 1999 fiscal year, which the company attributed to weak domestic and Asian markets. Late in that fiscal year, Konica announced that it would consolidate its U.S. photo printing operations, closing four of its seven film development facilities. This move followed an October 1998 consolidation, whereby 21 photo development subsidiaries in Japan were unified. Konica also announced in February 1999 that it would reduce group employment by eight percent over a two-year period. These developments were evidence of a company committed to protecting its position within highly competitive industries.

Principal Subsidiaries: Konica Marketing Corporation; Konica Medical Inc.; Kyoritsu Medical Co., Ltd.; Konica Business Machines Japan Co., Ltd.; Yamanashi Konica Co., Ltd.; Kofu Konica Co., Ltd.; Konica Denshi Co., Ltd.; Konica Supplies Manufacturing Co., Ltd.; Shinwa Digital Industry Co., Ltd.; Konica System Equipment Co., Ltd.; Konica Gelatin Corporation; Konica Packaging Corporation; Konica Chemical Corporation; Konica Color Photo Equipment Co., Ltd.; Konica Meditech Service Corporation; Nihon ID System Co., Ltd.; Konica Service Co., Ltd.; Konica Engineering Co., Ltd.; Konica Repro Co., Ltd.; Konica Logistics Co., Ltd.; Konica Sogo Service Co., Ltd.; Konica Information Systems Co., Ltd.; Konica Technosearch Corporation; Konica Color Network Co., Ltd.; Konica Color Imaging Corporation; Asia Color Co., Ltd.; Showa Tennenshoku Co., Ltd.; Konica Color Kansai Co., Ltd.; Union Color Co., Ltd. NORTH AMERICA: Konica Headquarters North America, Inc. (U.S.A.); Konica Photo Imaging, Inc.; Konica Medical Corporation (U.S.A.); Konica Manufacturing U.S.A., Inc.; Konica Graphic Imaging International, Inc.; Konica Business Technologies, Inc. (U.S.A.); Konica Supplies Manufacturing U.S.A., Inc.; Konica Technology, Inc.; Konica Capital Corporation I (U.S.A.); Konica Finance U.S.A. Corporation; Konica Canada, Inc. EUROPE: Konica Europe GmbH (Germany); Konica Business Machines Deutschland GmbH (Germany); Konica Graphic Imaging Europe GmbH (Germany); Konica France S.A.; Konica Bureautique S.A. (France); Konica UK Ltd.; Konica Business Machines (U.K.) Ltd.; Konica Nederland B.V. (Netherlands); Konica Austria GmbH; Konica Business Machines Italia S.p.A. (Italy); Konica Business Machines Belgium S.A.N.V.; Konica Czech s.r.o. (Czech Republic). ASIA/OCEANIA: Konica Asia Headquarters Pte. Ltd. (Singapore); Konica Singapore Pte. Ltd.; Konica Hong Kong Ltd.; Konica Manufacturing (H.K.) Ltd. (Hong Kong); Konica (Thailand) Co., Ltd.; Konica Photochem (Thailand) Co., Ltd.; Konica (Dailan) Co., Ltd. (China); Konica Australia Pty. Ltd.