About Canon

Canon Inc. (Canon) manufactures office multi-function devices (MFDs), laser printers, inkjet printers, cameras, medical equipment, and lithography equipment. Canon sells its products principally under the Canon brand name and through sales subsidiaries. Each of these subsidiaries is responsible for marketing and distribution to retail dealers in an assigned territory. Canon’s strategy is to develop innovative, high value-added products incorporating advanced technologies. Canon’s R&D activities range from basic research to product-oriented research directed at maintaining and increasing Canon’s technological leadership in the marketplace. Canon will work to realize the optimized global allocation of its production assets based on changes in local conditions in each country and region. Canon has manufacturing subsidiaries in a variety of countries and regions, including the United States, Germany, France, the Netherlands, Taiwan, China, Malaysia, Thailand, Vietnam and the Philippines. Canon has also launched programs to collect and recycle used Canon cartridges and to refurbish used Canon MFDs. In addition, Canon has removed virtually all environmentally unfriendly chemicals from its manufacturing processes. Products Canon operates its business in four segments: the Printing Business Unit, the Imaging Business Unit, the Medical Business Unit, and the Industrial Business Unit. Printing Business Unit This segment manufactures, markets and services a full range of home, office and professional printers through variety of printing technologies such as inkjet and electrophotography. Canon also delivers added value to customers through software, services and solutions. For office MFDs, following the launch of the imageRUNNER ADVANCE DX series in 2020 and 9 models in the 3 series in 2021, Canon introduced 4 new models in 2022 and further strengthened imageRUNNER ADVANCE DX series lineup and awarded as 2022-2024 Most Reliable A3 Brand by trusted independent testing farm, Buyers Laboratory, a division of Keypoint Intelligence, in recognition of the high reliability of products. Canon is also providing a software named uniFLOW Online that extends the functions of the new imageRUNNER ADVANCE DX by connecting them to cloud services. In addition to cloud integration and enhanced security, Canon has newly introduced Hybrid Work Print Standard service to enable secured and controlled print at work-from-home environment by combining office MFDs and home inkjet printers via uniFLOW Online. In order to maintain and improve competitiveness in the future, Canon will continue to strive to further enhance its product lineup in line with market trends, strengthen its ability to respond to solutions, and improve its sales capabilities to meet increasingly sophisticated customer demand. In production printing, Canon launched 3 new models as imagePRESS V series, which includes the imagePRESS V900 for compactness and easier operability, imagePRESS V1000 supporting high-mixlow-volume production with better speed and media handling capability and imagePRESS V1350 as a flagship with greatest productivity and robustness to reduce delivery time for high-volume output. Combining remote print management software PRISMAremote Manager, helps reduce less downtime through total print operation visibility at factory. Regarding large-format inkjet printers, Canon offers the imagePROGRAF PRO series, which features newly developed 12-color LUCIA PRO ink, which significantly improves color reproduction and expression in dark areas to meet the high-quality image requirements of art professionals. Canon also offers the imagePROGRAF TZ/TX/TM/TA series, which is equipped with LUCIA TD, a five-color pigment ink that enables high-quality printing according to a variety of printing applications and paper suitability, for large-format printing needs, ranging from large-volume printing of drawings at design offices to CAD and poster printing at companies and stores. Canon also offers the imagePROGRAF GP series which is equipped with fluorescent ink, the first in the industry, for brighter and softer color reproduction in 2021. For the high-end production inkjet market Canon offers industry-leading, continuous feed printers for massive print volumes at highest efficiency with highest-quality results in full color. The ColorStream Series inkjet press provides a modular and customizable offering with highest productivity and flexibility for color and monochrome production of transaction, TransPromo, direct mail, book and manual applications including security inks, such as Magnetic ink character recognition (MICR) or invisible ink. The ProStream Series is a unique breed of fast, high-productivity continuous feed inkjet presses combining the vibrant colors and productivity of offset with the variable-data versatility of digital printing. As for high speed production cutsheet inkjet printers, Canon provides the varioPRINT iX series that has revolutionized the commercial printing business experience. It combines stunning image quality and a wide media range with the high productivity and attractive cost-efficiency of inkjet. The varioPRINT iX series press offers high uptime, reliability, and productivity to produce more in less time. It is ideal for printing companies who need predictable and fast production with minimal calibration and setup so that they can handle and fulfill any job based on the agreed turnaround time and price, resulting in more profit and more business for Canon’s customers. In the large format graphic arts market, Canon provides unique UV LED solutions under the Colorado and Arizona brands, targeting best-in-class productivity combined with lowest cost of ownership to enable professional print providers to deliver a wealth of graphics and industrial applications to their customers. Inside the Colorado, the Canon UVgel technology provides unrivalled productivity in a unique process that retains the advantages of prevailing printer technologies, while eliminating many of the compromises. The Colorado offers an impressive application range, thanks to two additional technologies: the more flexible and stretchable formulation of the UVgel 460 inks and the FLXfinish+ technology. The UVgel 460 inks provide image stability even when folded, bent and wrapped. And with the FLXfinish+ technology, user can print user applications both with a flawless glossy and a luxurious matte finish, independent of media finish, expanding the range of user artistic freedom. Regarding inkjet printers, Canon offers a wide range of products to print, scan and copy with excellent usability at reasonable running cost for the various needs of its customers. Especially since the COVID-19 pandemic, the use of inkjet printers for home has increased due to the diversification of work styles and learning methods. For home users, Canon introduced XK110/TS8630, which excels at both photo and document with a new user interface to fit customers usage to make operation easier with fewer steps, and “G3370/G1330” which was introduced to heavy users at home and achieves high volume printing and low running cost through an extra-large capacity tank. In business inkjet market, demand to print documents and creatives with reasonable cost at diversified locations including office and home as places and ways of working diversify is increasing. To supportvarious business users, Canon introduced GX4030, which uses full pigment ink system for printing high-quality business documents at a low running cost. In addition, GX5030 has a small footprint, low running cost, high productivity and adaptability to a wide variety of papers. As for laser printers, dealers and users are reducing their inventories due to concerns over the economic outlook and rising interest rates. In addition, as a long-term trend, there are concerns over lagging growth of the entire market affected by decrease in demand for printing, which is caused by changes in users printing behavior due to the prevalence of smartphones, cloud computing, etc. In response, Canon has focused on expanding sales of high value-added products from mid to high-end class, especially for multifunction printers (MFPs). In addition, Canon aims to increase sales volume and market share by enhancing competitiveness and customer value with even more focus on contractual business, which engages with customers for a certain period, accompanied with leveraging technical innovation and so forth. The pandemic caused lockdowns in China where Canon has production facilities, which caused those facilities to see declines in operating capacity as well as a shortage of raw materials and parts. This has led to a temporary shortage of printer supplies. Canon will strive to ensure a stable supply of products by diversifying the supply chain. Imaging Business Unit This segment manufactures and markets digital cameras, as well as lenses and various related accessories. In interchangeable lens digital cameras, to further expand the lineup of the EOS R System, Canon launched EOS R7 and EOS R10.While these two models incorporate APS-C sensors, they also inherit, among others, the autofocus subject detection technology of the high-end model, EOS R3, and offer high performance in all aspects of still image and video capture. Canon expects professional and advanced amateur users to, for example, use these as sub-cameras, and that it will also encourage people to replace their SLR cameras or step-up from entry-class cameras. As for the camera market, due to the launch of new mirrorless cameras and interchangeable lenses by each company, demand remained strong despite the economic slowdown. As a result, Canon has maintained a leading market share in interchangeable lens digital cameras in terms of volume in the major regions/countries, such as the United States, Europe, China and Japan. Canon aims to expand the imaging domains of interchangeable lens digital cameras, and believes there remains considerable room for future growth through development of new products based on state-of-the-art technology such as higher picture quality, small and lightweight body and versatile movie/network functions. In interchangeable lenses for digital cameras, Canon expanded its RF lens lineup by introducing six interchangeable lenses, including two EOS RF-S mirrorless APS-C lenses. Sales of RF lenses also grew significantly thanks to synergies with EOS R series camera body. As for compact digital cameras, while the overall market has been shrinking, Canon will continue to strengthen its premium lineup and strive to improve its profitability. Moreover, Canon is developing new camera genres, such as PowerShot ZOOM and PowerShot PICK, in order to discover new needs for ease of use and shooting in specific scenes. In the compact photo printer market, Canon launched the SELPHY CP1500. With its advantages, such as easy operation, portability, lab-quality photo print, and durability, SELPHY has gained a strong market position in each region. Canon plans to tap into new customer demand and to maintain its lead in this market. As a new business, Canon is also working on the Mixed Reality (MR) business, which fuses real images with virtual 3D CG images at the same time. Canon has expanded its lineup by introducing the compact and lightweight model MREAL S1 in 2021 and the wide viewing angle model MREAL X1 in 2022. Canon will continue to provide solutions utilizing 3D data in a wide range of fields, including manufacturing industry. In 2022, Canon launched six new models with significantly improved performances, including the VB-H47. Being able to capture the video clearly even in dark places or in the environments where there is a difference in brightness, such as backlight, the new models contribute to the improvement of accuracy of analysis in combination with video content analytics software. Also, from December 2022, a microSD card-type hardware AI Accelerator AS-AN11 that turns network cameras into AI cameras and three dedicated video analytics software, Intrusion Detection, Parking Detection, and Video Difference Detection were successively released for the Japanese market. Sales of products for the advanced surveillance market are steadily growing. They meet the strict requirements of port surveillance, etc. by taking advantage of their ultra-high-sensitivity performance that enables them to capture color video even in complete darkness. Canon acquired Axis Communications, the industry leader in network video, in 2015. In 2022, Axis showed strong growth, which was illustrated by the launch of around 130 new products and the opening of 4 new AECs (Axis Experience Center). This means that Axis now has 34 AECs around the world, with the purpose of being closer to the customers. For the industry, to promote DX (Digital Transformation), Canon offers three new video solutions. Canon provides Automated Guided Vehicle (AGV) manufacturers with Vision-based Navigation Software, a video content analytics software that includes Visual SLAM technology, which uses cameras to simultaneously estimate three-dimensional information of the surrounding environment, and position and posture. Canon aims to expand the range of applications beyond the logistics field. For the Vision Edition Series, video analytics software utilizing network cameras, Canon released the Vision Edition 2, a new version which extends image processing capabilities and improves connectivity with external devices and support by Al. Enabling to build more flexible and simple systems, Canon continues to meet diversified and sophisticated needs of improving productivity on the operation site. For the inspection of bridges and tunnels using image data, Canon has been contracted for the detection of cracks as a BPO (Business Process Outsourcing) service using AI technology, but now has started to provide as a cloud service. In the professional video market, the demand continues for large amounts of high-quality contents due to the expansion of viewing through OTT*and video content due to the spread of streaming and internet video, and Canon has noted the rise of users, such as video creators. Moreover, Canon is also aware of the emergence of a market that is different from the past, such as in-house production in enterprise and education market. In the video production market, Canon is experiencing the demand for smaller and lighter production equipment, production efficiency, and manpower reduction. In the live streaming and broadcast market such as live sports and live music, the revival of various events that had been stagnant during the COVID-19 pandemic has led to continued investment in equipment, and new trends are appearing, such as video expression with a shallow depth of field that utilizes large-format sensors. Among them, Canon has introduced the EOS R5C, a compact, lightweight digital cinema camera that built-in 8K/RAW recording for users who demand high performance in both video and still images, the CN-E20·50mm and the CN-E45·135mm, a full-frame cinema zoom lens that flexibly supports demand for more efficient video production, the CN8x15, a cine servo lens that can be used in a wide range of applications from recording to live broadcasting, the EU-V3, a function expansion unit that enhances the operability of large-format cameras for live production, and the CR-N700, a top-of-the-line 4K remote camera for video production. Furthermore, in the area of video solutions, Canon will work to create business in volumetric video, which is expected to expand in the market, such as new video expression in sports broadcasting, entertainment and commercials, and data utilization in metaverse. Canon will continue to launch products and solutions that capture changes in the market to meet the needs of a wide range of professionals in video production and contribute to the development of video culture. Medical Business Unit This segment markets diagnostic imaging systems, including Computed tomography (CT) systems, Magnetic resonance imaging (MRI) systems, Diagnostic ultrasound systems, and Diagnostic X-ray systems, as well as Clinical laboratory systems and Healthcare IT solutions to customers in more than 150 countries and regions around the world, offering technology that enables early detection and fast diagnosis. Canon strives to help customers provide reliable, patient-friendly healthcare and achieve efficiency, as well as cost reduction through its medical systems and services. In the medical systems business, Canon is advancing efforts with Altivity, an AI innovation brand, to deliver uncompromised quality and value across the entire care pathway by combining extensive intelligence and know-how garnered through medical practice while leveraging using AI to bring better quality patient care by streamlining workflow for prevention, diagnosis, treatment and prognosis for enhanced efficiency. Canon has long enjoyed the leading position in the domestic CT market. In 2022, Canon introduced the Aquilion Serve, a new 80/160-slice CT scanner and the 1.5T MRI Vantage Fortian, a high performance yet easy-to-use system with automated scan planning feature. The machine comes with Advanced intelligent Clear-IQ Engine (AiCE) which uses deep learning algorithm to deliver higher image quality. These CT and MRI systems install cameras developed by Canon to detect patient positioning, thereby making operational adjustments easier and reducing scan time. The new ultrasound solutions, the Aplio flex/ Aplio go, add new value and bring much efficiency in workflow by taking advantage of the applications developed using AI to be incorporated in its small footprint. It was launched in Japan in 2022 and will be followed by other regions. Canon announced its decision to establish a new subsidiary Canon Healthcare USA, INC. with the aim to accelerate the growth of its medical business by strengthening its presence in the highly influential US medical market. A portion of the upstream marketing operations will be transferred to the new company and by establishing a network with key opinion leaders in the industry in the United States, Canon will develop and propose products and solutions that address the trends and needs of the medical market. In November, Canon installed a photon counting CT PCCT system using detector technology of its wholly owned subsidiary, Redlen Technologies Inc., in National Cancer Center Japan to conduct joint research for the commercialization of the PCCT technology with a similar initiative underway with medical institutions in the United States. Building on its leading position in the domestic CT systems market, Canon’s goal is to become the leader in the global CT market at the earliest opportunity. Industrial Business Unit This segment has established design-in business style, which enables customer needs to be reflected in the early stage of its product development process. As a result of its steady progress in developing value-added products, Canon offers a wide variety of products for Internet of Things (IoT) devices and automotive semiconductors, which are rapidly becoming more widespread. As for memory productions, Canon is ready to expand its market share further through sale of the KrF scanner FPA-6300ES6a which realized the highest level of productivity and overlay, and by continuous upgrades of i-line stepper FPA-5550iZ2. Canon also launched Lithography Plus, a solution platform to enhance its services for working lithography equipment in the market. Canon will contribute to the productivity improvement of users who use Canon’s lithography equipment, including real-time analysis of the equipment, automatic recovery in case of malfunction, and the proposal of optimal manufacturing conditions. In the field of Nanoimprint Lithography (NIL) equipment, Canon is accelerating preparations for mass production of memory devices, while conducting joint development with various manufacturers and promoting activities to expand the scope of NIL application. The FPD lithography equipment market is shrinking rapidly due to the falling off of special demand experienced in the COVID-19 pandemic, as well as worldwide inflation and economic slowdown. As a result, customer investment plans have been temporarily postponed, but demand for Organic Light Emitting Diode (OLED) panels for PCs, tablets and other products remains strong, and Canon expects the market to recover in late 2023 or early 2024. The flat panel display market, in which demand for thinner panels increases, is expected to grow in size, increase in 4K/8K resolution, and shift to high-quality displays such as OLED. Canon aims to further expand its market share with the MPAsp-H1003T, lithography equipment for 8th generation glass substrates that achieves high productivity by exposing high-definition 65 inch panels in a batch, and the MPAsp-E903T, lithography equipment for 6th generation glass substrates that meets the need for further high definition in small and medium sized display manufacturing. In addition, demand for displays for IT devices, such as laptops and tablets is growing due to the spread of online meetings and education. In order to meet such market needs, Canon has added the MPAsp-H1003H, lithography equipment for displays for IT devices that offers both high productivity and high definition to its lineup. In the OLED display manufacturing equipment market, Canon will not only work to maintain its overwhelming competitiveness in the field of small- and medium-sized panels, but also continue the development of equipment for large-sized panels. Seasonality Canon’s sales for the fourth quarter are typically higher than for the other three quarters, mainly due to strong demand for consumer products, such as cameras and inkjet printers, during the year-end holiday season. In Japan, corporate demand for office products peaks in the first quarter (year ended December 31, 2022), as many Japanese companies end their fiscal year in March. Sales also tend to increase at the start of the new school year in each region. Marketing and Distribution Canon sells its products primarily through subsidiaries organized under regional marketing subsidiaries: Canon Marketing Japan Inc. in Japan; Canon U.S.A., Inc. in North and South America; Canon Europe Ltd. and Canon Europa N.V. in Europe, Russia, Africa and the Middle East; Canon (China) Co., Ltd. in Asia outside Japan; and Canon Australia Pty. Ltd. in Oceania. Each subsidiary is responsible for its own market research and for determining its sales channels, advertising and promotional activities. Each subsidiary provides tailor-made solutions to a diverse range of unique customers and aims to advance Canon’s reputation as a highly trusted brand. In Japan, Canon sells its products primarily through Canon Marketing Japan Inc., mainly to dealers and retail outlets. In the Americas, Canon sells its products primarily through Canon U.S.A., Inc. and Canon Canada Inc., mainly to dealers and retail outlets. In Europe, Canon sells its products primarily through Canon Europa N.V., which sells mainly through subsidiaries or independent distributors to dealers and retail outlets in each locality. In addition, MFDs are sold directly to end-users by several subsidiaries such as Canon (UK) Ltd. in the United Kingdom and Canon France S.A.S. in France. In Southeast Asia and Oceania, Canon sells its products through subsidiaries located in those areas. In addition, MFDs are sold directly to end-users in Australia by Canon Australia Pty. Ltd. For the medical business, CMSC sells its products directly or through regional marketing subsidiaries and distributors. Canon also sells laser printers on an OEM basis to HP Inc. HP Inc. resells these printers under the HP LaserJet Printers name. During 2022, OEM sales to HP Inc. constituted 12.0% of Canon’s consolidated net sales. Canon continues to enhance its distribution system by promoting the continuing education of its sales personnel and by optimizing inventory levels and business planning through weekly analysis of sales data. Service In Japan and overseas, product service is provided in part by independent retail outlets and designated service centers that receive technical training assistance from Canon. Canon also services its products directly. Most of Canon’s business machines carry warranties of varying terms, depending upon the model and country of sale. Cameras and camera accessories carry warranties that vary depending upon the model and country of sale. Canon services its office MFDs, and printers, and supplies replacement drums, parts, toner and paper. Most customers enter into a contract under which Canon offers consumables and parts as well as break fix activities in return mainly for a fixed amount in the contract plus a per copy charge. MFDs not covered by a service contract may be serviced from time to time by Canon or local dealers for a fee. For diagnostic imaging systems, including CT, MRI, ultrasound, and X-ray systems, Canon provides comprehensive repairs, service, and maintenance to ensure that customers are able to use these products to their full potential at all times. Canon maintains support contracts with customers and has technical call centers. In addition, to help ensure customer satisfaction, Canon offers service training programs for engineers working in overseas medical institutions. For the service contracts of the products of the Medical Business Unit, customers pay stated fixed fees for the stand ready maintenance service. Patents and Licenses Canon holds a large number of patents, design rights and trademarks in Japan and abroad to protect proprietary technologies stemming from its R&D activities. Canon utilizes these intellectual property rights as important strategic management tools. For example, Canon leverages its intellectual property rights to expand its product lines and business operations and to form alliances and exchange technologies with other companies. Canon has granted licenses with respect to its patents to various Japanese and foreign companies, most often with respect to electrophotography, laser printers, multifunction printers, facsimile machines and cameras. Companies to which Canon has granted licenses include Kyocera Document Solutions Inc. and Brother Industries, Ltd. Canon has also entered into cross-licensing agreements with other major industry participants. Companies with which Canon has entered into cross-licensing agreements include HP Inc.; Xerox Corporation; International Business Machines Corporation; Eastman Kodak Company; and Seiko Epson Corporation. Canon has placed a high priority on the management of its intellectual property. Some products that are material to Canon’s operating results incorporate patented technology. Patented technology is critical to the continued success of Canon’s products, which typically incorporate technology from dozens of different patents. Competition Printing Business Unit: Canon’s primary competitors in the production print and business print market are Xerox Corporation; FUJIFILM Business Innovation Corp.; Ricoh Company, Ltd.; Konica Minolta Inc.; HP Inc.; and Lexmark International, Inc. Canon’s primary competitors in the inkjet printer market are HP Inc., Seiko Epson Corporation and Brother Industries, Ltd. Imaging Business Unit: Canon’s primary competitors in the interchangeable-lens digital camera market are Sony Group Corporation and Nikon Corporation. Canon’s primary competitors are Hangzhou Hikvision Digital Technology Co., Ltd. and Panasonic Corporation. Medical Business Unit: Canon’s primary competitors in the diagnostic medical imaging market are General Electric Company, Siemens Healthineers AG, Koninklijke Philips N.V., and FUJIFILM Corporation. Canon has also new competitors such as United Imaging Healthcare Co. Ltd., a Chinese vendor. Industrial Business Unit: The company’s main competitors include Nikon Corporation, for semiconductor and flat panel display (FPD) lithography equipment; and ASML Holding N.V., for semiconductor lithography equipment. Research and Development The company’s R&D expenses were ¥306,730million in the year ended December 31, 2022. Environmental Regulation Some of the environmental laws, regulations, industry standards and global initiatives that affect Canon’s businesses include European Union Directive on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (the RoHS Directive); and European Framework for the Management of Chemical Substances (REACH Regulation). History Canon Inc. was founded in 1933. The company was incorporated under the laws of Japan in 1937.