Canon, long dominant in its core sectors — such as printers and cameras — is putting its Toshiba Medical acquisition center stage, while looking to new sectors and global regions to spur dramatic growth.
For example, its fastest growing market, China, “is playing an increasingly vital role in our global market," Hideki Ozawa, president and CEO of Canon China, told China Daily
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"The revenue from the Asian market has accounted for nearly 20 percent of our global revenue and the camera sales in this region contributed more than 30 percent of our camera sales globally."
Looking for new businesses to move into is one reason that Canon was so aggressive in its $6 billion acquisition of Toshiba Medical Systems in 2016, he advised, noting that the sector is also “high margin.”
One reason behind the search for new markets: the impact of smartphones on camera sales, which have declined recently.
"Cameras with built-in lenses have been replaced by smartphones, while the demand for single-lens reflex cameras is not rigid, so the era of medium and low-end camera products has come to an end," Liang Zhenpeng, a consumer electronics analyst, told China Daily, noting that this “inevitable trend” was forcing camera makers like Canon to search for other products in order to grow their profitability.
The importance of the move to medical products was underscored in January, when Canon Chairman and CEO Fujio Mitarai told management at Toshiba Medical, "consider me part of this family," according to the Nikkei Asian Review
To reinforce how much future growth depends on new areas for Canon, the medical operation was raised to “core status,” according to the publication, when Canon placed Toshiba Medical President Toshio Takiguchi in the top spot of the group and also made him a senior managing executive officer at Canon.
The publication called this “unusual treatment for the head of an acquired company.”
There is synergy between existing Canon efforts and those of its newly acquired business.
Canon will be able to “leverage Toshiba Medical’s core strength in imaging diagnostics, further reinforcing Toshiba Medical’s operational strength in its in vitro
diagnostics business and next-generation medical IT through M&A and other strategic investment, to make possible the strengthening of Canon’s biomedical business,” it stated