WETZLAR, Germany—Booming smartphone sales are eating into the digital camera market, but the inventor of the 35mm film camera isn’t blinking.
High-end camera producer Leica Camera AG celebrated its first camera’s 100th anniversary last year with a limited-edition model emblematic of its effort to bridge old and new: a digital camera with no display—just an old-style viewfinder. The retro-chic design, which sold for €15,000 ($16,545), was a hit.
Eastman Kodak Co.
, another pioneer of mass-market photography, has quit the film business and gone through bankruptcy reorganization. Polaroid Corp., which once seemed to hold great promise, today no longer produces cameras.
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Leica faced lean years, too, but found a lucrative niche. It continues making small, boxy cameras resembling its old M models—the cameras behind iconic images including the sailor kissing a woman in Times Square at the end of World War II.
The cameras today have digital insides, not rollers for film, and sell for at about $6,500 without a lens. Their link to past designs is a focus on precision optics that plays up Germany’s engineering prowess.
“Leicas are still relevant,” said
Constantine Manos,
a professional photographer at photo agency Magnum. Leica’s cameras retain links to their past “while keeping pace with the latest technology.”
Leica Chief Executive
Alfred Schopf
said this means smartphones pose less of a threat than for other makers of small digital cameras.
“Smartphones take pretty decent pictures under normal conditions,” Mr. Schopf said at the new company headquarters in Wetzlar, the small German city where Leica was founded in 1849. “But when the weather changes or it gets dark, they tend to hit a limit.”
Optician
Carl Kellner
established Optisches Institut Wetzlar 39 years before George Eastman started Kodak. In 1914 the company, then owned by industrialist Ernst Leitz, developed the first 35mm film camera as a compact alternative to existing equipment. After a decade of war and other delays, the camera went on sale, branded with a name coined from the initial letters of Leitz and camera. It quickly took off, in a parallel to how digital equipment has made snapshots ubiquitous.
‘Leicas are still relevant.’
—Constantine Manos, professional photographer
Hardy and unobtrusive, the camera used high-resolution film that registered images much faster than previous cameras, said Shannon Perich, a curator at the Smithsonian Institution’s Photographic History Collection. Leica in the 1930s transformed the work of journalists, paparazzi, spies and chroniclers of daily life, she said.
Famous users have included Henri Cartier-Bresson, Robert Capa, Robert Frank and even the Queen of England. Leica played a “highly significant role in 20th century photography,” said Naomi Rosenblum, a historian of photography.
By the 1960s, Leica was a cultural icon. The smaller Vintage M models still sell secondhand for thousands of dollars, and some professional photographers prefer the geek-chic compact camera over larger, more advanced alternatives. In 2010,
Steve Jobs
compared
Apple Inc.
’s new iPhone 4 to “a beautiful old Leica camera.”
But snob appeal didn’t help Leica when digital photography started taking hold in the late 1990s. Squeezing electronics inside an M series body (5.5 × 3.1 × 1.7 inches) proved dicey because Leica’s sophisticated optics required more advanced sensors than used in most digital cameras. Transforming to the digital age nearly bankrupted Leica a decade ago.
Its savior was
Andreas Kaufmann,
a onetime schoolteacher, co-founder of the German Green party and heir to a family fortune from papermaking. In 2004 he bought a minority stake in Leica but soon took it over to stave off insolvency.
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“I have always seen Leica as a brand with great potential,” said Mr. Kaufmann, 61 years old, who bankrolled technology investments that allowed Leica in 2006 to succeed in finally rolling out a digital M model that could swap lenses with older 35mm film M series.
By 2011 Leica was profitable and promising enough that private-equity firm Blackstone Group bought a 44% stake for an undisclosed price. Leica’s “reputation for excellence and innovation” was a big factor, said
Axel Herberg,
senior managing director at Blackstone.
Since then, Leica’s sales have risen around 35%, to €337 million in its most recent fiscal year ended March 31, 2014. The company doesn’t disclose profits.
A bigger challenge to Leica than the billion smartphones sold world-wide annually is the development of less expensive but high-quality cameras with interchangeable components within the brand from makers including
Sony,
Panasonic
and Olympus, said Wee Teck Loo, head of consumer electronics at market survey firm Euromonitor.
“Camera manufacturers must crank up their technological developments,” he said.
For Leica, that means products like two high-quality cameras that are larger than the M series—and priced between $16,900 and $25,400 without a lens—that will soon hit the market.
To people in the photography world, this growing product line explains how the company has survived. “Leica has diversified its options and offerings, ventured into multiple formats of digital photography and continues to support” the M series, said
Bradly Treadaway,
digital media coordinator at the International Center of Photography in New York.
Write to Ellen Emmerentze Jervell at ellen.jervell@wsj.com
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