According to the Oxford dictionary, to “innovate” is to “make changes in something established, especially by introducing new methods, ideas, or products”. A clear as day definition, though easier said than done.
Innovation in the consumer electronics space (or rather, in any space where economics is involved) has always been a challenge. Ideally, the change brought about from creating something new, or improving upon a new process, has to bring about increased value for both the end user and the producer: the former enjoys the product and service, and derives a higher quality of life; the latter gains brand recognition, and through sales, reaps good profits, and so forth.
Naturally, when you’re not the market leader, the propensity of wanting to differentiate your products from your competitors is greater. After all, you've to upset the status quo in order to gain new ground. On the other hand, if you’re the king of the hill, your primary objective is to maintain the status quo to protect the cash cows. The pressure to innovate or embrace new trends is much lower. That’s why market leaders often wait till they feel there’s sufficient demand before introducing a new feature. (Either that, or they’re forced into action when they see that their cash cows are in danger.) The events that followed are fairly predictable: the big player mimics the feature that the small player has popularized, and uses its cost leadership to its advantage; the small player finds its growth halted; and finally, status quo ante.
The golden rule for any small company who is adopting a differentiation strategy is to make sure that what it’s newly devised serves specific needs of its target customers, and is unique enough that market leaders with deep pockets can’t easily copy. This rule can also be applied if you’re a big company competing in a market already dominated by other players. It’s time to forget how big you’re in the other markets, and think of yourself as a small player. Then, innovate like there's no tomorrow.
Let’s take Canon as an example. On a worldwide basis, it has garnered 45% unit share for digital SLRs, 19% for compacts, and 76% for broadcast lenses – figures that propelled them to the top of the podium in their respective markets in 2010. Glaringly missing from this list however is the HD camcorder crown. At 18%, Canon is currently lying in third position. Thus, I’d argue that despite the size of Canon and its successes in the above-mentioned markets, it’s a small player in the HD camcorder segment. The executives at Canon seem to recognize that for their Legria (Vixia in the NTSC markets) camcorders to make significant inroads, a different approach is needed.
You can see the tip of this differentiation iceberg in Canon’s 2011 camcorder lineup: the Legria HF G10, HF M41 and HF M400 are bucking the trend of competing using megapixel count. The HD CMOS PRO sensor that’s within these new camcorders has a resolution of only 2.07 megapixels. At first glance, this seems like a crazy move that’d put them at a great disadvantage, especially in a sea of eight- and twelve-megapixel shooters.
But from a technical standpoint, it’s not hard to understand the logic behind this move. The term “Full HD” implies a resolution of 1920 pixels wide by 1080 high. Multiply both and you’d realize that it comes up to 2,073,600 pixels (i.e., 2.07 megapixels). By not throwing in extra pixels that serve no additional benefit to video quality, Canon’s proposition is that the HD CMOS PRO sensor with its bigger pixel size (2.75 um versus 1.7 um for a typical 8-megapixel sensor) offers significant light gathering and dynamic range improvements, which in turn, translate to better noise control and motion image quality.
All these sound good, but the fight is not won on technical specifications alone. How many times have we witnessed great products falter due to poor communication of product benefits to potential customers? Try reciting the paragraph above to the average consumer, and you’d have lost them at the word “sensor”. Maybe that’s one reason why the HD CMOS PRO is used in their upper-entry and midrange camcorders: the target segment is arguably less price-sensitive and more tech-savvy to comprehend the specific needs that the new sensor addresses.
In fact, one can draw parallels of what Canon is doing with its Legria camcorders with what Sony’s done with its Alpha line of DSLRs. While Sony's Handycam is the undisputed leader in the camcorder market, the company is a nobody in the DSLR market, until they took over the camera business from Konica Minolta and released its first DSLR – the A100 – in June 2006. In a short span of four years, it’s achieved a worldwide market share in excess of 10%, making it the third largest DSLR maker behind Canon and Nikon. And differentiation is the strategy that Sony has used right from the start. SteadyShot (an in-camera optical image stabilization technique), Quick AF Live View (to address the slow autofocusing problem of newfangled live view-capable DSLRs), and AF-capable, Carl Zeiss-branded lenses are common headliners in their consumer-facing collaterals.
All that being said, a 10-ish percent market share and a number three position is probably not good enough for the company that’s also brought us Blu-ray. So in a recent presentation, Sony has gone on the record to say that their future Alpha DSLRs will use the translucent mirror technology that debuted in the A33 and A55. It’s undoubtedly a brave move, but I’m sure a lot of self-examination must have taken place before the head honchos of Sony rubber-stamped this shift in strategy. I could only speculate that Sony must have figured that instead of playing catch-up to Canon and Nikon’s mechatronics superiority, they’d be better off innovating in areas that they’re clearly good at, such as industrial design, miniaturization, and electronics.
Healthy competition is always good; and for us consumers, let’s just sit back and wait for these companies to delight us with their products.
1. That crown belongs to Sony. [<-]
2. Certainly, Canon's camcorder division has to do things differently from its DSLR and compact camera divisions. Have you noticed that Canon wasn't the first to introduce a live view DSLR, nor the first to come up with a DSLR movie mode? [<-]
3. The sole reason for choosing a camcorder with a sensor that's more than two megapixels is so that you could take high-megapixel stills. The Canon Legria HF S30 has a 8.59-megapixel sensor. [<-]
4. Let’s not forget the fact that Canon designs and manufactures its own CMOS sensors. This gives them a huge competitive advantage. [<-]
5. It's no coincidence that these are technologies that can't be easily copied. And the use of patents and IPs provides additional barriers. [<-]
6. The success of the NEX series is a prime example. And name me any Alpha interchangeable lens camera that can do 10 frames per second burst shooting and full-time AF during movie capture before they switched to the translucent mirror technology? Wait, there isn't one. [<-]
Ng Chong Seng / Associate Editor
Ex-writer turned marketer turned writer again, Chong Seng is fascinated by all things tech. He loves lambs, and avoids semicolons.
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