Hiroshi “Hugh” Komiya retired several years ago as one of the world’s authorities on camera manufacturing, but his leisure time didn’t last long.
He formed a company last year and his digital cameras starting showing up on store shelves last month. And Komiya believes his General Imaging Co. of Torrance will be one of the top digital camera sellers before long perhaps $1 billion in sales in 10 years.
That may seem like an overly bold boast, except for the fact that his cameras have a rare advantage: They carry the brand name of General Electric Co. The Fairfield, Conn. giant signed an exclusive deal last year with Komiya’s startup to design, manufacture and distribute the cameras. And GE is known as a company that wants to be at or very near the top in any consumer field it is in.
“GE is a big company. With their name and our product, I believe we can come to be something in the marketplace,” said Komiya, who already has almost 300 employees, mostly in Torrance.
“Right now our focus is capturing a substantial market share in the U.S., China, and countries in Europe.”
Komiya’s business model is simple. He said he plans to keep the company small in size and high in production.
“They don’t have a lot of burdensome infrastructure that some of the other camera makers have. They have a lean model that can change quickly,” said Jon Schmid, a public relations representative for General Imaging.
Komiya was three years into retirement from his post as president of Olympus Imaging Corp. when GE contacted him about starting a camera company to create GE-branded cameras.
He had been contacted before by companies inquiring about his re-entry into the camera business, but he had turned them all down. Komiya had ambitions of running his own camera company and GE gave him that opportunity, he said.
GE is the world’s second-biggest company by market capitalization, behind Exxon Mobil Corp. It’s known for its media holdings, including NBC Universal, but also for home appliances, jet engines, wind turbines and financial services.
GE often arranges licensing agreements with outside companies. European manufacturer Thomson Inc. makes GE TVs, radios, VCRs and home phones. Some of GE’s small appliances, such as toasters, are made by third-party manufactures and sold exclusively at Wal-Mart stores, said Deirdre Latour, spokeswoman for GE.
“During the process of choosing the right licensee for the (digital camera) opportunity, we met with Hugh and were very impressed with his experience, credentials, and maybe most importantly, his sincere enthusiasm and passion for the GE brand,” Marc Bertino, the manager of GE’s trademark licensing division, said in an e-mail.
In August, Komiya launched General Imaging with financing he would only say came from a “private equity group including me.” GE’s company policy restricts it from funding any licensees.
Komiya declined to comment on how much capital he needed to start the company. Ron Glaz, an industry analyst from Framingham, Mass., consultancy IDC, estimated that this type of operation would cost between $25 million and $50 million to get off the ground, especially considering the caliber of the company’s executive team.
During his 11-year tenure at Olympus, Komiya is credited with doubling global camera market share to more than 20 percent, the top position. Rene Buhay, who heads sales for General Imaging, is a former vice president of global sales for ArcSoft and also led North American sales for Samsung and Ricoh.
General Imaging introduced eight camera models at the Photo Marketing Association’s annual conference in March. The cameras were designed by Takeyoshi Kawano, who also designed the Sony Walkman, the Sony VAIO computer, and the Olympus Stylus camera series. They range from 7 mega-pixels to 12 mega-pixels and have screens up to 3-inches.
Prices start in the low $100s for the basic model, but go up to about $400 competitive with similar cameras.
General Imaging outsources the manufacturing, like other major camera companies.
“The cameras are manufactured in Asia,” said Komiya. “The location is confidential. You can guess.”
The company’s first camera was sold on May 1 through the Home Shopping Network. Later that month they were shipped to Sears and Kmart. This month, Radio Shack started selling them.
“Those tend to be the easiest and cheapest channels to get into,” said Glaz. “To get a sale space in Best Buy or Circuit City, you have to spend a lot of money. If the cameras don’t ship out quickly, they send them right back to you. That’s not to say that Radio Shack, Kmart and Sears aren’t requiring market dollars. They are just more flexible.”
General Imaging still has some yet-to-be announced agreements with a number of retailers up its sleeve, Buhay said.
“They have already been put to bed. We will launch them later this year,” he said.
Next month, General Imaging cameras will be sent to retailers in Canada, South America, Europe and Asia, he said.
Flat sector
General Imaging is entering the digital camera market at a time when business in that sector looks somewhat flat, said Glaz. Last year, 31.7 million cameras were shipped by vendors, according to the IDC’s Digital Still Camera 2007-2011 Forecast Study. That number is expected to remain relatively stable over the next four to five years.
“The digital camera market is a very crowded market. Can General Imaging create an opportunity for itself? Well, they have a brand that could generate a place for them,” Glaz said.
Currently, General Imaging is pushing its cameras and the GE name in a three-step strategy, said Buhay. The first phase started with the PMA show and included advertising in major trade publications.
General Imaging has started the second phase, which includes consumer advertising and product placement. Recently the cameras appeared on “The Price is Right” show as a prize.
The third phase will be advertising within channels offered through stores where the products are on sale.
“You need to spend a lot of marketing dollars to be successful. If you spend all that money, what is going to drive people to come buy your products?” Glaz said. “Digital cameras are a commodity these days. They all have the same look and feel.”
The challenge for General Imaging will be to create a niche for itself. The product looks like a good fit for GE, said trademark licensing division manager Bertino.
“The digital camera category tested very well in terms of fitting the GE brand attributes, as well as consumer interest in buying a digital camera from GE.”
Out of 711 U.S. adults aged 25 to 65 surveyed in a recent poll conducted by GE, 26 percent thought GE manufactured digital cameras already and more than 80 percent said they would buy a GE digital camera if the company offered one.
“Our products are positioned just right,” Buhay said, citing the cameras advanced features for low prices.
If all goes according to Komiya’s plans, his company will be among the top three digital-camera sellers within five years.
