Leica: Das Comeback der Foto-Ikone

[Music] The exciting and perhaps decisive thing is that at Leica they have somehow decided not to stamp the smartphone as a "Find-Bild". [Music] Welcome dear listeners. You are at Manager Magazine Podcasts theme. My name is Isabel Hülsen. Today it is about a brand that has written a photography story. The camera manufacturer Leica. Photographers like Henri Cartier-Bresson have a history of time with her. And with pros like Hobby Knipsan, the brand enjoys the highest renomé. But with the progress of the smartphone photography, Leica is in the crisis and only a few insolvencies passed. From the Nokia moment, the talk was over. What happened then is remarkable. Leica stood up again and the calculated smartphone boom helped the camera producer. As Leica became one of the most successful examples of transformation, I am now talking about it with my colleague Hannah Steinhater. She researched with Leica, looked deeply into Leica's holy halls in Wetzlar and now you are here with me in the studio. Welcome dear Hannah and nice that you are here. Hi Issa, thank you for the invitation. Leica is a true icon of people who are really passionate about photography. What is actually the fascination of Leica? On the one hand, of course, Leica stands for extremely precise cameras and optics that are actually still hand-screwed in the production in Wetzlar. Profi photographers worldwide swear on the expensive cameras and the so-called Leica look of the photos, they love them especially. What is the Leica look? You have to explain that to us, I think. Yes, when you look at the photos that were shot with a Leica, you will always see a certain mixture of detail, a certain color refinement and a sharpness in the background. And maybe you even remember one of the pictures that were shot with a Leica. There is once the famous Kuss photo at Times Square at the end of the war in 1945 or the documentary photography of the close-up attack in Vietnam. These are pictures that you know. But in addition to the Leica look of the photos, the design of metal and leather is of course also iconic and is often reproduced. Cameras of the brand can be said to be a symbol of status. Yes, they are correspondingly expensive, you have to say. Let's take a look at Leica's story. Despite or perhaps especially because of this long story, Leica was 150 years old in a existential crisis in 2005. They suddenly came into the years as stupefied. What was it about? It was mainly about two things. Once, Leica really almost missed digitalization and to a time when numerous competitors already used electronics and software. Leica just took a long time to capture the pure analog photography. And that was of course the phase in which both digital cameras and then from 2007 the iPhone turned the market upside down. Therefore, everyone could be a photographer because they always had a small, cheap camera with them. But no one needed more expensive equipment. You just said several thousand euros more expensive than a company like Leica. Yes, the low point for Leica is often described as a kind of Nokia moment of the company. In the meantime, this is a standing term of the business history of the Nokia moment. What does it mean? In short, a Nokia moment is actually the turning point by which a leading or iconic company is usually overtaken by a technological period of time. Because you are simply underestimated by errors and also such a certain arrogance too long at the original success recipe without fundamentally changing anything. And then it becomes so irrelevant that you disappear from the market. Nokia didn't want to have the smartphone with touch screens instead of pressing the phone on the market and you clumsily stick to your old phone for a very long time and lose the meaning dramatically. We all know the story. Similarly, it was in the photography market when the digital photography came out. Yes, and also Leica, how close were they at this Nokia moment? Well, Leica was at the time, so 2005, almost countless. Of course, you didn't have any space for action at first, because it was somehow about standing on firm legs again economically. Before you could fit into any form of strategic new business fields, the company was simply too much convinced by the pure analog photography that it was actually very long, simply the market core. Yes, there is a famous scene, Steve Jobs had it in 2010 at the exhibition until then as brand new iPhone 4, the design of this phone with a beautiful old Leica comparison. You certainly wonder, was that an ultimate accusation or the ultimate demystification? Yes, probably a little bit of both. First of all, it is of course a great drawing when the former boss of Apple on a large stage, called your company, and also loathes your design. But in the end, as you already said, make this little phone that he presents, your business is broken and then you also try to copy your own brand, namely the iconic design. So yes, probably a little bit of both. Leica has not only survived, but in the last year they have placed a record turnover of almost 600 million euros. So a really remarkable transformation has been made. How did this course turn to its beginning? This is mainly because of one person, namely Andreas Kaufmann, who is today the owner of the company's majority-owned company but he is actually a fan of the brand for a long time, namely since childhood. He told me that he had already kept his first liking as a little boy, and it was already clear to him that this camera was something special. Yes, and how did he save the company then? In 2004, he was already much older, he got involved in the family business. Although it is about the companies, we have just explained it in a very bad way, but he still invested money and got an interim CEO on board and his finances and the subsequent restructuring have stabilized the company for the first time. And then when you are economically at a safer stand, a new business field for liking came into play. Kaufmann did it well in the conversation with me. He said that for the company, actually all areas make sense, in which it is about the beginning of light and fine mechanics, because nothing else makes Leica, in principle, for decades. And you need this knowledge, of course, in the production of cameras, but also in many other areas. What kind of business fields are this, that he thought about and that Leica has then experienced? Yes, starting with, for example, home cinema projectors, so Bima for the cinema feeling at home, watches and glasses, these are all good ideas, but during my research, I had the impression that the attitude within the company has changed since the almost-insolvent. So not only the new business fields, but it simply brought self-awareness and you are now looking for opportunities again. New business fields are one thing, but Leica is and remains a camera manufacturer. You said earlier that the introduction of smartphones was a real cut in the entire camera market. How did Leica get into it? Otherwise you wouldn't have made it. If you hadn't done this task, you probably wouldn't have been able to survive as a camera manufacturer. That's right and the exciting and perhaps decisive thing is that Leica decided at some point not to sample and ignore the smartphone as a fine-image. Instead, they have more of a chance of understanding which in the best case brings more people closer to photography and which then invest in a good camera from a certain point of time. Of course, mobile cameras are now really good photos, but from a certain size of the image, you have to say that they don't look as sharp as they do on the smartphone. And now there is a short introduction to our own thing. Our FinanceFord newsletter is available in a new format in cooperation with the Manager Magazine. Every Wednesday you get a briefing with exclusive research and news about Fintechs banks, crypto players, forms and family offices. Sounds exciting? Then just contact financefd.com/newsletter and you won't miss anything from the digital finance world. You can also find the link to the newsletter in the show notes. But Leica didn't leave Leica alone when they actively entered the smartphone market. When and above all, how? Exactly, they wanted to make the brand a wider audience and not only under professional photographers but also in self-experience in the smartphone industry. In 2016, they joined a cooperation with Huawei. One of the big smartphone manufacturers, how did this cooperation look like? They exchanged each other closely, visited each other and shared their expertise. And in Leica's case, of course, everything is around the lenses. So they didn't just sell their name for the smartphone, but actively entered the development. So in the development of the lenses and with that the camera heart is what you should do, right? Exactly. However, Leica had to look for another sparrings partner because of the 2019 U.S. sanction against the Chinese company. In May 2022, they announced the new cooperation with Xiaomi. Also a Chinese manufacturer. And on the Japanese market, they have been working with Sharp since 2021. An electronic company with Leica, the so-called Leitzphone, developed a smartphone exclusively for the Japanese market with, of course, Leica optics. You might have to say to the Leitzphone that the name is seriously Leitzappleitet. That is the Leica reason. And that also says a little bit about which relevance this medium-sized manufacturer, Leica, even in the joint play with such global companies as Sharp, then could get. What do these partnerships actually bring? And how relevant are they today for Leica's business? You say that Leica is not simply just some nameless supplier, but is actually seen as a partner. Meanwhile, the smartphone business is, of course, in addition to photography, the driver behind the annual turnover. However, the company doesn't know the specific numbers for the individual segments. Leica always talks about to introduce a mobile phone with Leica optics also in the European market. How serious is that? Basically, this is already the plan, I think. However, both CEO Matthias Haasch and also buyers are always very covered and little concrete. But in the summer, the company has again emphasized the plan to take concrete action. It is also always rumored that they really produce their own mobile phone, but in the end, you have to say, the smartphone market is based on mass production and Leica is simply too small for that. In Wetzlar itself, most of the steps are actually handwork. I visited production and that surprised me. I look at how you know more often from companies, factories and production lines. And there you now meet mostly in the various halls hardly any people, because machines and robots are used everywhere. At Leica, there are really still many people at their jobs who build the cameras with tiny screws. I brought in a few numbers, 175 employees and employees spend almost a five-digit number per year on cameras. So you can see the dimensions a little bit. So a very exclusive product hand made. Even since the smartphone Leica has now digitized in the core. The company has its legendary Leica M. The M stands for "Messucher" and especially with professional photographers it has an incredible meaning. So what is it about? I am a hobby photographer myself. That's why we weren't so sure about the costume. But at least let me try to explain. The "Messucher" is the small window in the camera through which the photographer observes the scene he wants to photograph. And this "Messucher" is the reason why many professionals on the cameras of this series are complaining. He is responsible for the distorted sharpness and the focus. And now it gets complicated. The distance to the object that you want to photograph is not measured by the lens but the "Messucher". And the photographer has to set a lot of hands here. Another important point that makes the camera and especially this "Messucher" so attractive is that this "Messucher" shows the photographer a small frame which cut he will see at the end on the cropped photo. "Messucher" is a frame that can be seen. And that means everything inside this border will be on the picture. Everything outside is not. But the advantage, especially for documentary and reportage photographers they also see which people are no longer in the picture. But they see what happens outside of the scene. In addition, this "Messucher" helps to set the planned picture manually, briefly. And the creativity that makes this series so popular especially with professionals. And what changes Leica now and especially why? When the photographer has such a place why do you pack it then? Basically, they have now replaced this "Messucher" with a digital searcher. Now on a display of the exact image, the perspective and the focus of the lens and the exposure of the camera. It's less mechanical. You want to talk to new customers and customers who may have been too difficult before. But you're right. You also have what makes the "Messucher" actually look like. Because it already has the value of places like an old Porsche for car collectors. You just have to imagine that. So you've already taken a risk. If you look at the transformation of Leica as a whole, what did they do right? I would say to accept the spirit of change. I've asked Kaufmann what he's proud of so far with Leica. There will be one or the other. But his answer was if I'm proud of what we've achieved, then I'm out. Because then I look at the past. So permanent change and look forward. Now we're talking about pictures, about moments. Did your research leave a special memory for you, Leica? Yes, and of course to take pictures. I told him that I was in Wetzlar and I was allowed to test the new "M" camera. The product chef for the camera brought the new model to the company café. Of course, we had to make sure that nobody saw what he brought with him. Because at that time there was a secret. And when we were sitting at a table on the side of the table, I should test the camera and became a hobby photographer. Because I held the camera constantly and looked at it with the wrong eye in the beginning. The photo turned out to be not bad at all. I would say that. I want to see that in the next video. But that's definitely something. And thank you very much, dear Hannah. You're welcome. And if you, dear listeners and listeners want to know more about the inside life of big brands and famous companies, then I recommend you an Abolus Manager magazine. Whether printed or digital. Of course, you can find all the information on our website, in the app and here in the show notes. I thank you for listening to "Felix Klein" and Sven Bergmann, who produced this edition for you. Until next time, your Isabelle Hülsen.