Berlin At the electronics fair Ifa in Berlin, Leica is not showing a camera, but a television – the Cine 1 model. It was created in cooperation with the Chinese electronics group Hisense, one of the five largest television manufacturers.
However, the device is not a classic television, neither technically nor in terms of price. Leica itself speaks of a “home cinema product”, which can be seen from the price of 6900 euros and upwards. Further models are to follow in the next few years – in a long-term cooperation, the companies want to “position themselves more strongly” in this segment.
It is the latest example of how the traditional company, which has achieved cult status with its cameras, wants to open up new product segments. “The core competence of the company is to get the best out of an image,” said CEO Matthias Harsch to the Handelsblatt. The technology is already being used in smartphones.
However, the TV market is brutally competitive. After the corona pandemic, in which many consumers made life comfortable at home with new televisions, demand unexpectedly suddenly collapsed, observes Paul Gray, who heads the home electronics division at market researcher Omdia. “We are in the midst of a painful inventory adjustment.”
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The diversification isn’t a departure from the camera itself. Leica models are still in demand today, despite the smartphone boom that has pushed many products off the market. The manufacturer sells premium products to enthusiasts who appreciate excellent technology and pay several thousand euros for it.
The cameras are more in demand than ever
According to CEO Harsch, mobile phone photography is even beneficial for the premium segment of the camera market: “It allows many people to discover their passion for the subject.” The electronics manufacturer is aiming for five to ten percent growth in this segment – and that in a market that will within years collapsed.
The misery after the turn of the millennium, when Leica missed the transition to digital photography and almost perished as a result, is almost forgotten. Majority owner and Chairman of the Supervisory Board Andreas Kaufmann saved the company, and he still has a decisive influence on the strategy today.
Going into new business areas has so far proven itself for the company with a history of more than 100 years. A few weeks ago, it announced record results for the past financial year, with sales increasing by 16 percent to EUR 450 million.
Together with Panasonic, Leica develops cameras, the drone manufacturer Yuneec and the smartphone manufacturer Xiaomi it supplies image technologies. In the meantime, Huawei technology also received the “made in Germany” seal from Leica, until the US sanctions hit the Chinese group. The partnerships are important, says Harsch: “As a medium-sized company, we cannot develop everything completely ourselves.”
This principle also applies to the development of the Cine 1. The laser TV set is a projector that throws an 80 or 100 inch image onto the screen from a short distance. Hisense, one of the big five in the TV market, supplies numerous components, from the chips to the smart TV platform to the speaker. Leica participates with the lens – and the awareness, which should help with marketing in China. This is where super projectors are in demand.
Cluster risk China?
To date, laser projectors have accounted for less than one percent of the TV market, and market researchers estimate that sales of these devices are only one billion dollars – albeit with an upward trend.
This is an attractive niche for Leica, emphasizes Harsch, who was previously CEO of television manufacturer Loewe. “We have a two percent market share for cameras – if we reach this size with high-end laser televisions, that would be gigantic.” He does not give a specific sales forecast.
However, the new technology has to catch on: Do home cinema fans want to darken the living room so that the picture can be seen clearly? How good is the quality compared to other technologies? And is the price competitive when the cost of panels is dropping significantly?
The plan is ambitious, as Leica boss Harsch knows. “With every new technology, the question is how quickly it will become established. We’ve yet to see that,” he says.
When looking for cooperation partners, Leica always strikes gold in China. In view of the geopolitical tensions, this is a risk, as the Huawei case shows: Because of the sanctions imposed by the US government, the Chinese technology group’s business in the West has collapsed – even the smartphones that use Leica technology were suddenly practically unsaleable. The partnership has now ended.
Harsch does not see a problem in this. “Our business is global, Germany accounts for less than five percent of total sales, China for 15 percent, the USA for 20 percent,” says the manager. “We therefore have no concentration risk in sales.”
However, he also knows: “The danger of geopolitical conflicts will increase, but due to our history we have a lot of experience in managing them.”
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