Canon will enhance competitiveness through acquisition
According to its official press release, Canon announced that the Japanese company would acquire Redlen Technologies Inc. As a result, Redlen will be a wholly owned subsidiary of Canon. Canon set its internal policy to “achieve new growth through a grand strategic transformation” in 2016. In fact, it included strengthening and expanding the medical business.
In 2021, the company tries to “accelerate its corporate portfolio transformation by improving productivity and creating new businesses.” What’s more, it enhances competitiveness through company-wide realignment into a new industry-oriented business group structure. In fact, the Medical Group is one of those four new business groups.
Who is Canon?
Canon Inc. is a Japanese multinational corporation and was founded in 1937. The Japanese company has a strong expertise in optical, imaging, and industrial products. The company has a wide range of products lineup. For example, they are lenses, cameras, medical equipment, scanners, printers, and semiconductor manufacturing equipment
Who is Redlen Technologies?
Redlen Technologies is the leading provider of multi-energy, X-ray imaging modules based on proprietary Cadmium Zinc Telluride imaging sensors. Thanks to its precision energy detection platform, it can provide solutions to companies.
Insourcing Key Device
Canon has long history to insource its key devices. For example, image processor for digital camera is one example. Why does insourcing work for the company? This is because insourcing enables it to accelerate the speed of development and reduce costs. As a result, Canon increases its competitive edge.
When it comes to diagnostic medical imaging equipment, Computed Tomography (CT), Magnetic Resonance Imaging and Ultrasonic Diagnostic Equipment are three major equipment. Canon has about 20% of market share of CT. As a result, it is ranked the first in Japan and the third in the world. Thus, the Japanese company defines the CT market as important segment and increases investment in the area. At the same time, Canon tries to increase of the sales of medical equipment.
Advantages of Cadmium Zinc Telluride imaging sensors
When we use Cadmium Zinc Telluride (CZT) semiconductor detector in next-generation photon-counting CT systems (PCCT), there are several advantages. First, we will be able to obtain clearer imaging of specific substances in the body. As a result, doctors will be able to detect very small lesions and subtle pathological changes earlier than before. In fact, the detection has been difficult with conventional technologies.
Second, the new technology can reduce the physical burden on patients by significantly reducing exposure dose. This is because PCCT systems can obtain images by using weaker x-ray radiation than conventional CT.
Medical Device Market
Of course, the prediction about medical device market is different by each research source. However, one source predicts that the medical device market is expected to reach an estimated $432.6 billion by 2025. What’s more, it is forecast to grow at a CAGR of 4.1% from 2020 to 2025. The market is growing because world population is increasing, and because average life expectancy is increasing. Thus, more people in the world want to access better healthcare services. Therefore, we can easily imagine that we demand more and better medical devices.
In this sense, the products in relating to image such as camera, sensor and CT, are crucial. This is because doctors can diagnose based on patients’ images and do not see them without special devices in many cases. Therefore, Canon’s strategy to focus on medical devices is good. The Japanese company must accelerate it to win the competition. In fact, acquisition is one way to enhance companies’ capability.