Nikon Corporation Business Information, Profile, and History

History of Nikon Corporation

Nikon Corporation is the grandaddy of Japan's Big Five photographic firms. Its cameras have been the standard for professional photographers and advanced amateurs since the 1950s. When those markets became saturated in the 1980s, the company expanded its product line to remain competitive. A member of the Mitsubishi keiretsu, or business group, Nikon manufactures photography equipment and electronic imaging equipment, semiconductor-manufacturing equipment, surveying and measuring instruments, microscopes, binoculars, telescopes, and ophthalmic and medical products.

In 1917 three of Japan's foremost makers of optical equipment merged, in order to offer a full line of optical products. The German optical-glass industry was by far the most advanced at the time. The company was called Nippon Kogaku (Japan Optics) and began producing optical glass in 1918. The new company had negotiated for technical assistance with the German engineering firm Carl Zeiss, but the negotiations fell through . Nippon Kogaku then, in 1919, employed eight leading, independent German engineers.

World War I had little effect on the new company, but postwar government policies that promoted the importation of foreign technology to develop domestic industry helped Nippon Kogaku. In the 1920s the company used German technical advice to develop a line of ultra-small prism binoculars and the precise JOICO microscope. By 1932 Nippon Kogaku designed its own camera lenses, the Nikkon brand. Nippon Kogaku was listed on the Tokyo Stock Exchange in 1939.

Nippon Kogaku expanded during the 1920s and 1930s. Military leaders saw expansion as the best way to attack the domestic problems of overpopulation and shortages of raw materials. The country looked to Southeast Asia as its natural extension, and in September 1940 Japan joined Germany and Italy in the Tripartite Pact to secure its interests in this area. As the threat of a major war increased, Japanese government planners chose to concentrate on improving precision optics for navigation and bombing equipment rather than radar and sonar, chosen by the U.S. government. The decision meant new business for Nippon Kogaku and its competitor Minolta, both of which were primarily optical-equipment producers at the time. It also increased German technical aid to Japanese firms that were involved in the war effort, and Nikon gained expertise through Japan's German ally.

After World War II, Nippon Kogaku continued to prosper, shifting from optics with military applications to optics with consumer applications. The company produced microscopes, binoculars, eyeglasses, and surveying instruments--for which there was great demand as Japan rebuilt its shattered infrastructure.

The company also entered the area for which it would become best known, introducing its first camera in 1946. Other Japanese firms already had begun selling cameras. Minolta had produced cameras since it was founded in 1928; and Canon produced Japan's first 35-millimeter camera in 1934. However, the standard remained the German Leica 35-millimeter camera, accepted by professional photographers as the top of the line since its introduction in 1925.

The war temporarily took German cameras out of the market place. Although Nippon Kogaku had the advantage of German lens technology and the support of U.S. occupation forces that wanted to rebuild Japanese industry as soon as possible, the company did not immediately take advantage of the lack of competition in international markets. Company management insisted on producing cameras for the Japanese market.

It was not long before Japanese cameras became better known internationally. U.S. occupation forces found Japanese 35-millimeter cameras in post exchanges and took them back to the United States. The simple sand-cast bodies, uncomplicated iris shutters, and high-quality lenses soon earned Japanese cameras an excellent reputation, despite the poor reputation other Japanese-made goods suffered.

Nippon Kogaku's Nikon-brand cameras earned special attention for their high quality. Demand increased further when U.S. combat photographers covering the Korean War favored Nikon lenses, and photojournalists began asking Nippon Kogaku to make special lenses to fit their Leicas. The company's reputation spread by word of mouth among professional photographers. By the mid- 1960s photographers for Life, National Geographic, and Stern--Germany's largest-selling picture magazine--used Nikon 35-millimeter cameras. The Nikon had been accepted as the professional standard, and advanced amateurs followed the example, helping Nikon cameras to make inroads into that market as well.

One reason for Nippon Kogaku's success was its development of a completely new type of camera, the single-lens reflex (SLR) camera. The SLR lets a photographer see exactly what the camera will record, using an angled mirror to reflect images from the camera lens to a viewing screen. The rangefinder camera produced by Leitz, maker of the Leica, used two lenses, one for the film and a separate one for the viewer. That method worked until interchangeable lenses were developed in the 1950s. If a photographer used a wide-angle or telephoto lens, the Leica's viewer lens still showed a standard image. There could be a considerable difference between what the eye saw and what the film recorded.

Nippon Kogaku brought the Nikon F SLR to market in 1959 and improved it when other Japanese companies offered competing models. Leitz did not introduce its SLR until 1964. Leitz's SLR was judged by the professional community to be an amateur model, not advanced enough for professional use. By then, the Nikon camera had become the high-end 35-millimeter standard. Even so, it was cheaper than the competing Leicaflex; in 1965, the Nikon F with a coupled light meter and standard f2 lens sold for $413, while a similarly equipped Leicaflex sold for $549.

Another reason for Nippon Kogaku's success in the international market was its ties to the Mitsubishi keiretsu, its transfer agent. After World War II, the United States had broken up the zaibatsu, powerful Japanese business conglomerates, such as Mitsubishi; but the trading companies, banks, and industrial concerns that had composed the zaibatsu continued to cooperate. For Nippon Kogaku, its ties to Mitsubishi meant ready credit and exporting advantages.

Nippon Kogaku also marketed its photographic equipment by promoting what it called "photography culture," sponsoring photo contests and photo exhibits and establishing clubs that gave amateurs photographic advice.

Nikon cameras were best-sellers, and Nippon Kogaku was profitable by the mid- 1960s. When other major Japanese camera companies, such as Canon and Minolta, entered the office-equipment field by introducing copiers, calculators, and related equipment, Nippon Kogaku continued to emphasize cameras. The company introduced new SLR cameras and an eight-millimeter movie camera during the 1960s and 1970s, as well as a new all-weather camera. The U.S. National Aeronautics and Space Administration chose Nikon SLR cameras for use in the space shuttle program.

Changing economic conditions in the 1980s forced Nippon Kogaku to reevaluate its reliance on cameras. By 1982, 80% of Japanese households owned at least one 35-millimeter camera with all the attachments. Markets in Europe and the United States also were saturated. At the same time, new production techniques--such as use of computers to design lenses--and new materials--such as lightweight, tough plastics for camera bodies--took some of the skill and much of the profit out of making cameras. Since Nippon Kogaku, unlike other Japanese camera makers, was not heavily involved in office equipment or the new video technology, two-thirds of its revenues still came from the mature camera market in 1982.

At the same time, other Japanese companies mounted a new threat to the 35-millimeter camera market. In 1976 Canon introduced a new camera, the impact of which rivaled the introduction of the SLR camera in the 1950s. Canon's AE-I used a semiconductor chip to change automatically some of the settings the photographer would change on traditional 35-millimeter SLRs. Casual photographers often were intimidated by the need to set shutter speed, lens aperture, and focus, so when Canon pushed the AE-l's ease of use in an advertising campaign its sales took off. Encouraged by that success, Canon next brought non-SLR 35-millimeter cameras back into the picture with its simple Snappy. That camera was a threat to the "snapshooter" market firmly held by U.S. camera makers Kodak and Polaroid, not Nippon Kogaku's high end of the market. Nippon Kogaku introduced the FG 35-millimeter SLR, a programmed, automatic model, in mid- 1982 and promoted it with a major ad campaign aimed at men who tended to buy SLRs. Nevertheless, Canon was slipping ahead of Nippon Kogaku in overall camera sales. Nippon Kogaku still held its reputation for building better cameras, but its conservative business approach was causing it to lose ground, just as Leitz's had caused it to lose out to Nippon Kogaku 30 years earlier. To survive, Nippon Kogaku not only had to continue camera development but also to diversify.

In the camera field, the company moved into the simpler end of the market with its successful One-Touch camera in 1983. The next year the Nikon FA received the Camera Grand Prix, a Japanese award. The company followed the One-Touch with the Nikon F-501, a new autofocus SLR camera, which received the 1986 European Camera of the Year Award. In 1989 another new autofocus SLR, the Nikon F-801, received both the Camera Grand Prix in Japan and the European Camera of the Year Award. By the beginning of the 1990s, Nikon Corporation--the name Nippon Kogaku had adopted officially in 1988--could claim to have a complete lineup of cameras ranging from the professional top-of-the-line models to compact autofocus models for less serious photographers.

Nippon Kogaku had also diversified into areas in which it already had a foothold, including ophthalmic technology. It produced sunglasses, plastic eyeglass lenses, and eyeglass frames, and in 1979, marketed its automatic eye refractive index measuring machine. In 1980, the company moved in a new direction, developing a dental root implant using bioactive glass, which bonds with living bone tissue.

In 1972, Nippon Kogaku entered an important new area, marketing its laser interferometric X-Y measuring system, a measuring instrument for integrated circuits. In the 1980s, the company put more effort into developing semiconductor-production machinery, and Nikon has become a world leader in that area. Nippon Kogaku continued to develop microscopes, telescopes, and binoculars as well as more advanced equipment for surveying and measuring instruments.

It also made its first forays into new types of electronic imaging equipment: a color film scanner, used for computer input of photos and a color printer for computer graphic production. The Still Video Camera System needs no film at all--it records images electronically on floppy discs, allowing images to be reproduced immediately or transmitted over telephone lines. Nikon lenses are being used in new high-definition television.

Nippon Kogaku's 1988 name change to Nikon recognized that optical equipment was no longer the company's focus in the electronics-oriented environment. The company known for its advanced optical glass has parlayed its reputation as a leading camera maker into success in other fields. While its conservatism has sometimes meant that Nikon Corporation has been slow in responding to new competitors, it has also meant maintaining a reputation for high quality.

Principal Subsidiaries: Tochigi Nikon K.K.; Mito Nikon K.K.; Sendai Nikon K.K.; Nikon Photo Products Inc.; Nikon Tec Corporation; Nikon Inc. (U.S.A.); Nikon Precision Inc. (U.S.A.); Nikon Europe B.V. (Netherlands); Nikon AG (Switzerland); Nikon GmbH (Germany); Nikon Precision Europe GmbH (Germany); Nikon U.K. Limited; Nikon France S.A.