Smartphones pose a threat to the compact camera segment: German camera maker Leica

The German camera maker first entered the smartphone market through a partnership with Chinese handset and telecom gear maker Huawei in 2015, which continued until 2022.

Smartphones pose a threat to the compact camera segment due to rapid advances in their camera technology, executives at German high-end camera maker Leica told Moneycontrol.

“The compact camera segment will die completely…many brands, like Sony and Samsung, have also stepped out of this business. However, Leica is still in this business. But, smartphones will replace compact digital photography,” said Julian Burczyk, Head of Product Management Mobile, Leica, speaking to us at the Mobile World Congress in Barcelona.

He, however, said that the small form factor of smartphones will never replace system cameras due to physics. “You need space to put glass, metals and more components… a smartphone form factor will never allow that,” said Burczyk.

Leica aims to bring elements of traditional camera capabilities to smartphone photography by partnering with top brands.

The German camera maker first entered the smartphone market through a partnership with Chinese handset and telecom gear maker Huawei in 2015, which continued until 2022. It also co-developed Sharp’s premium smartphone under the Leitz brand in Japan.

Leica formed an exclusive long-term partnership with Xiaomi in 2022 and subsequently founded a dedicated Mobile Business Unit, including R&D, product management, and a marketing department, to enhance its efforts in the smartphone market.

Partnership with Xiaomi 

Kay Plaetke, Strategy & Business Development Manager Mobile, Leica, said the partnership with Xiaomi is about joint development on the optical design and software fronts to perfect smartphone camera technology and is not merely about marketing.

He said Leica is investing heavily in this partnership and adding people to its R&D team in Wetzlar, Germany,

“We help choose the complete camera system, including sensors, lenses and the type of glass, and then co-engineer with Xiaomi. We sometimes work on choosing chipsets to support the camera system…the whole combination gives the best image quality."

Plaetke said Leica is working with Xiaomi exclusively and doesn't intend to rope in other smartphone makers. “We are working with Xiaomi to bring our quality not only to ultra high-end phones but also to the entry-premium segment.” He, however, clarified that Leica will not bring its camera quality to smartphones priced around 100-200 euros. “It is impossible because we can’t have the best sensors, lenses and components. We can’t achieve certain quality picture goals without high-end components.”

Executives at Leica said that both companies are using Artificial Intelligence (AI) algorithms for certain features but not to improve image quality. “We can achieve image quality through natural ingredients like lenses and sensors.”

Leica is one of many camera companies interested in the smartphone market. Hasselblad works with Oppo and OnePlus, while Zeiss works with Vivo. Canon is also exploring a partnership with a smartphone maker.

“It is a positive sign that other vendors are working with camera partners. The main problem is to add bigger sensors to the smartphone camera system. The knowledge of smartphone and camera makers must come together to find and create this miniaturisation of sensors.” Plaetke said.

Burczyk added that the camera industry can lend its knowledge to the smartphone industry. “We are over 100 years old, while the smartphone industry is around 15 years old. It’s a fairly young industry. We can help them learn how to use image technology and create good images.”

Xiaomi’s strategy 

Xiaomi is doubling down on its premium device strategy with a “calculated” portfolio for the Indian market, leveraging its partnership with Leica.

“We are now able to understand where the market lies [for Xiaomi] and where we could make a dent. Most of these are long-term plays. These are steps we are taking towards better availability of our premium products in the market,” Anuj Sharma, chief market officer at Xiaomi India, told Moneycontrol.

He, however, said that Xiaomi may only bring part of its premium smartphone portfolio to India. “Opening up everything may not be a viable business call.”

The reporter is in Barcelona to cover the Mobile World Congress, at the invitation of Xiaomi.