It’s as simple as looking through the viewfinder, pointing at your subject and clicking to capture the picture you want with any one of the hundreds of cameras available on the market.
Not so 65 years ago, when the science and cost involved in taking a picture made it a hobby for the upper classes, a semiprofessional skill for the most dedicated photography buff.
That was until Argus Industries launched its first 35 mm camera in 1936. Priced at $12.50, it wasn’t a giveaway but it was cheap enough–and it sold 30,000 units in its first week.
Bigger rival Kodak may have developed 35 mm film, but it was Argus that capitalized on the format. And by 1940, the Michigan-based company had begun mass marketing the “Brick,” or C3 model. The square, metallic box camera was the early forerunner of today’s models and ruled the 35 mm class for the better part of three decades, selling well over 2.5 million units.
Argus’ growth didn’t go unnoticed. “Its cameras and photographic accessories overnight changed candid camera photography in the U.S. from a class hobby to a mass pastime,” according to a January 1945 Fortune magazine article on the company.
By the time Fortune wrote about Argus, the company’s annual sales were $9 million. In its heyday 10 years later, sales hit $22 million a year, helped by military spending on optical instruments during the Korean War.
But Argus’ growth didn’t last, and its rags-to-riches-to-rags story is all too familiar to other U.S. consumer electronics concerns that have pioneered markets only to see manufacturing and market share drift overseas.
Now based in Elk Grove Village, Argus is writing a new chapter in its history. In its latest reincarnation, however, Argus can no longer be considered a manufacturer. Rather, it outsources its products, relying on its low overhead and contract manufacturing deals to keep prices down.
Its cameras can again be found in retail stores such as at Kmart Corp., which recently began stocking Argus digital models. Its product line, too, is getting a makeover. About half of Argus’ sales come from inexpensive digital cameras, which use a small computer diskette rather than film. That market is expected to grow more than tenfold in the next five years.
Ground lost to overseas firms
Like so many smaller firms of the day, the Argus management lacked foresight; they made a series of missteps in the 1950s and `60s that saw the company lose ground to Japanese and other technology-savvy Asian manufacturers.Its manufacturing plant in Ann Arbor, Mich., where the company was founded, became an onerous burden just as improvements in lenses and increasing shutter speeds led to changes in the sector. Argus even dabbled unsuccessfully in office and audio-visual equipment, which coincided with Japanese firms benefiting from the newer technology and lower production costs.
By the mid-1970s Argus had changed ownership several times and was even held at one point by Michele Sindona, an Italian entrepreneur who is said to have swindled the Vatican out of millions. Throughout most of the 1980s the company lay dormant and did not produce a single camera.
Argus eventually was acquired by Concord Camera Corp. In 1992, Concord needed funds and its head of operations, William Pearson, was handed the job of finding a buyer.
“Why not buy it myself, I thought,” Pearson says. “I knew the business, I knew how to grow businesses. I went to Concord when it was $20 million [in sales] with the directive to build the business, produce a business plan to grow it. In 3 1/2 years we took it to $60 million.”
He raised $500,000 to buy the business and agreed to purchase $1.2 million in inventory from Concord in the first year.
From his current base, Pearson now imports cheap film and digital models from China, branded as Argus cameras. His staff of 17 includes a head of sales and operational boss. Together they bring in new business, arrange shipments from China, do basic branding and packaging in-house and market the cameras.
Its latest models may not attract camera collectors, but the company continues to sell well-built cameras at a competitive price. Its models are priced under $200, with the bulk selling at between $29 and $39.
Argus has just supplied Kmart with a $3 million digital camera shipment and is knocking on the door of Wal-Mart and other big national players, after tying up deals with regional equipment sellers, such as Ritz Camera and Wolf Camera.
“It’s a very unique situation,” Pearson said. He has no long-term supply deals with factories overseas, no huge marketing budget to compete with bigger and better known rivals, and does not spend a penny on research.
Pearson made connections in Asia while Concord operation’s chief, a job that included restructuring its manufacturing plant in China.
His hunch was that single-use cameras and disposables would continue to be popular, especially as a promotional item. He began convincing the likes of Holland America cruise lines and Ragu spaghetti sauce to take his cameras. He sold millions branded with company logos, as special offers and promotional gifts.
Up against a giant
Polaroid is one of its main U.S. rivals, selling 13 million cameras last year, according to a spokesman. In contrast to Argus’ tiny marketing budget and non-existent research and development spending, Polaroid shelled out almost $700 million last year.
It, too, is hoping to cash in on the digital age. Proof of that, says spokesman Skip Colcord, is its focus on selling digital cameras at under $400, while others are “chasing the high end, going after the technophiles.”
Polaroid, however, is just one competitor that Argus faces.
“At $100 there are a couple of digital players that are being quite aggressive” according to InfoTrends Research Group analyst Michelle Lampmann, who focuses on emerging trends in digital photography. “Hewlett-Packard and Kodak are two of them. They are powerful brands and tend to have a better chance of being successful than the less powerful ones.”
The silver lining for Argus and other digital camera upstarts is the pace of growth in the industry. Lampmann expects digital camera sales to overtake those of film cameras in 2003 at about 15 million a year.
This year Pearson expects sales to more than double to about $20 million and Argus to capture between 5 and 8 percent of the digital camera market by the end of 2001. Better yet, the company is solidly profitable, Pearson says.
InfoTrends estimates the sub-$100 digital camera market is currently worth about $2.4 billion and will rise to $7.4 billion by 2005. Add in digital cameras priced at less than $200, Argus’ price range, and the market could soon be worth about $15 billion.
“Not a bad market to be in for a company that only a few years ago had nothing but memories,” Pearson said.
