1933Precision Optical Instruments Laboratory founded in a Roppongi apartment
1937Incorporated as Precision Optical Industry Co.; camera production begins
1939In-house lenses; Japan’s first X-ray indirect-photography machine
1947Renamed Canon Camera Co.
Canon began in November 1933 in a rented Roppongi apartment, where Goro Yoshida, an engineer who had taken foreign movie projectors apart, and Saburo Uchida, a securities man, set up the Precision Optical Instruments Laboratory. The money came from an unlikely source: Takeshi Mitarai, the obstetrician who had delivered Uchida’s wife’s baby — a chance link between medicine and precision optics that makes Canon’s founding one of the odder origin stories in Japanese business. Within two years the pair had built a working domestic camera. They named it Kwanon, after the thousand-armed goddess of mercy, then reworked the name to Canon — a word meaning scripture, standard and norm — to carry the ideal of building the camera that would set the standard.
The workshop turned into a company. In 1937 it was incorporated as Precision Optical Industry Co. with ¥1m in capital, moved to a Meguro factory, and by 1939 was grinding its own lenses and had completed Japan’s first X-ray indirect-photography machine — an early step into medical equipment. Then war intervened, and what set the post-war course was Mitarai’s decision, once it ended, to give up obstetrics and run the firm outright. He declared it his personal mission to perfect a domestic camera good enough to defend against foreign goods, restarted production in October 1945, and found the post-war models a hit with occupation officers and visiting buyers — the first time the Canon name travelled abroad. In 1947 the firm renamed itself Canon Camera Co., adopting the katakana spelling with overseas expansion already in mind.
1951Shimomaruko head-office plant; the export drive begins
1955New York branch opens
1961Moves into mid-range cameras (Canonflex)
1964First electronic calculator — into office equipment
Listed on the Tokyo Stock Exchange in 1949, Canon staked its future on exports at a moment when “Made in Japan” meant cheap and untrustworthy — a low regard Mitarai confronted directly on a 1950 tour of the West. In 1951 he signed a five-year export-sales contract with the British trading house Jardine Matheson, borrowed $500,000 to make it real, and poured $555,556 (¥200m) into a new head-office plant at Shimomaruko in Ota, Tokyo — roughly ten times the company’s capital, a bet well beyond ordinary judgement. A trade paper described the finished works as a leap “from a wooden back-street workshop into a modern factory.”
The discipline behind the bet became the company’s method. By specializing in premium cameras Canon held its margin above 10 percent and recouped the outlay in just three years; it opened a New York branch in 1955 and built direct access to the U.S. market. Mitarai’s rule was to hold back mass production until a design he was sure of was ready, then commit to volume and export together — a rhythm of establishing quality first and betting on scale second. That sequence became the template for post-war Japan’s premium precision-instrument exporters, and the quality-first choice compounded, over years, into brand value.
In 1967 Canon set a diversification line it summed up as “a camera in the right hand, office equipment in the left,” launching copiers, calculators and other new lines at once. The calculators walked straight into the brutal price war of the early 1970s; the venture lost money, and in 1975 Canon suspended its dividend and quit the business. In the confusion its president, Maeda, died suddenly, and in 1977 Ryuzaburo Kaku — then a managing director — was jumped over more senior executives into the presidency. He named the previous management’s complacency openly and installed a divisional structure that gave cameras, office machines and optics each their own profit-and-loss responsibility.
Kaku then concentrated R&D on office machines and accelerated copiers and printers. The pivotal outward move came in 1985, when Canon allied with Hewlett-Packard and began supplying laser-beam printers on an OEM basis — choosing to ride the channel of the world’s largest IT firm rather than build its own brand distribution, and treating OEM supply as a way to buy scale rather than a dilution of the brand. Canon’s laser-printer world share reached 70 percent by 1990, and its sales to HP alone hit $4.9B (¥611bn) by fiscal 2002.
The 1990 launch of the BJ-10v inkjet carried Canon into the consumer printer market just as PCs spread. Consolidated sales passed $6.9B (¥1tn), and a company that had suspended its dividend a decade earlier had reworked its whole earnings base — the centre of gravity moved from cameras to office machines without abandoning cameras, a balance that would later let Canon keep the camera brand alive while maximizing office-machine profit.
2026Kazuto Ogawa succeeds Mitarai; Phase VII begins
In 1995 Fujio Mitarai, a nephew of the founder, took the presidency and pre-empted a blind spot hidden inside strong results. He shifted Canon from summing up each division’s profit to managing on consolidated profit and cash flow, held technology and sales channels in-house, and squeezed inventory with cell-line production — looking first at the consolidated figure in a Japan where many rivals still competed on unconsolidated sales scale. That set up the high earnings of the 2000s, as the EOS line kept Canon among the leaders in digital SLRs and overseas sales reached 80 percent of the total.
But self-reliance had a limit. Once the copier, printer and camera markets structurally matured, the assets Canon had grown in-house could no longer reach the next pillar, and it began taking down its own self-reliance doctrine through large acquisitions: the Dutch printing firm Océ in 2010, the network-camera leader Axis Communications in 2015, and Toshiba Medical Systems for $6.1B (¥666bn) in 2016, its entry in earnest into medical equipment. By fiscal 2022 consolidated sales reached $30.7B (¥4.03tn) — a camera maker born in a Tokyo apartment grown, over some ninety years, into a precision-instrument group.
The costs of the long single-family leadership then surfaced. In 2023, running an all-male board slate, Chairman Mitarai — who personally held only about 0.01 percent of the stock and had ruled through board continuity, not capital — was re-elected at just 50.59 percent under pressure over board diversity; adding one female outside director the next year restored his approval to the 90-percent range. In 2025 Canon wrote down $1.1B (¥165bn) of goodwill on its medical business, resetting the returns it had expected from Toshiba Medical. In 2026 Fujio Mitarai handed the leadership he had held for three decades to an insider, Kazuto Ogawa, ending the founder-family era; the Phase VII plan that began the same year targets ¥5.6tn in sales by 2030 and a “high-wage” model, leaving the next generation to work out how nearly half a century of decisions should be carried forward.
What this founding shows is a pattern: an enterprise takes shape when a business opportunity binds people of different origins — engineering, capital, sales — to a single purpose. Goro Yoshida’s teardown study of foreign cameras, Saburo Uchida’s talent for raising money, Takeshi Mitarai’s investment and resolve — remove any one of the three and there would have been no vessel able to challenge, with a domestic product, a premium-camera market monopolized by imports. That the business survived even after Yoshida, its technical leader, left barely a year in is a sign that its purpose lay not in any single person but in a shared aspiration — “domestic manufacture.”
What decided the post-war leap was Mitarai’s choice to abandon a secure profession as an obstetrician and devote himself entirely to management. Raising the banners of “defense against foreign goods” and export-led nationhood, he talked the banks into lending and poured into a factory a sum far exceeding the company’s capital. The turning point at which a back-street workshop became a precision-instrument maker taking on the world market lay not at the founding itself but in the early 1950s, when that sense of mission crystallized into concrete investment and contracts.
The core of this decision lies less in the financial crisis itself than in the way it was used to recast the shape of management. The zero-dividend figure was also the result of the profitability of businesses fanned out through diversification melting together inside the company, so that it had become impossible to see who was losing money and where. President Kaku used a divisional structure to separate that profitability out, folded the businesses with thin prospects, and concentrated resources on office machines. That he was not brought in from outside in the immediate wake of the crisis but was a figure who had remained a managing director within — and could therefore name his predecessors’ complacency by name — reveals the character of this appointment.
The 1985 tie-up with HP was a design that, rather than relying on Canon’s own sales network, loaded its core components onto a partner’s channel to capture volume. Through which business and which method of selling to turn the strength of development into cash — this question, which President Kaku brought in with the divisional structure, was carried on in the later Mitarai era as consolidated management and self-reliance, and remains a point the company returns to at every huge acquisition and reshuffle of its businesses. In that a promotion made at the bottom of a crisis prepared, early on, the later management pattern of selection and concentration, this decision is rich in implication.
A strength built in-house cannot be surpassed by staying in-house
The core of this decision was not a financial crisis but a pre-emptive move against a blind spot in the midst of peak performance. The “fall into a company with little sense of growth” that Nikkei Business had forecast in 1990, Mitarai set as his own task the moment he took office. From management that summed up each division’s profitability to management that used consolidated profit and cash flow as its measure; holding both technology and sales channels in-house, and tightening inventory with cell production. In the Japan of the 1990s, where many companies competed on unconsolidated sales scale, looking first at the consolidated figure, at profit and at cash is what prepared the high earnings of the 2000s.
Yet self-reliance has a turning point. A design that encloses everything in-house, from elemental technologies to sales channels, generates thick profits so long as the core business is growing. But once the markets for office machines and cameras structurally shrink, the assets grown in-house alone cannot reach the next pillar. Beginning with the 2010 acquisition of Océ, Mitarai went on to take down, through large M&A, the very banner of self-reliance he had raised. The strength built in-house could not be surpassed by staying in-house — this decision leaves the question of how carrying a successful model through to the end eventually binds the next transformation.
Canon’s strength has long been underpinned by self-reliance. Refining in-house the optical and precision-instrument technology cultivated in cameras, applying it to copiers and printers, and building even the mechanism for earning on consumables by itself — that consistent philosophy of in-house making was the driving force that built the world market for office machines. The acquisition of Océ amounts to a choice to let go of that philosophy, of its own accord, in the face of a changing environment. When markets mature and voids in growth widen, there are domains that the speed of in-house making alone cannot fill. The decision to buy the technology and sales channels another company had built up was not a repudiation of self-reliance but a realistic correction meant to protect it.
Whether the acquisition itself was a success cannot be measured simply. The Océ brand was absorbed into Canon, and commercial printing has not grown into a pillar of revenue to replace office machines. Even so, what this acquisition left Canon is large. The either/or thinking — grow it yourself or buy and absorb it — was opened into a thinking that uses both by turns. The M&A that followed, in Axis and Toshiba Medical, all lie on the extension of the road opened by Océ. When a company that had carried its proprietary technology through rewrote that banner with its own hand, Canon offered one answer to the question of where to seek its next growth.
The necessity of the pivot, and the fineness of its means
The core of this acquisition is that, to the question of how to get beyond a stagnating core business, Canon gave the answer of a huge outside acquisition. With cameras, its founding trade, being eaten away by smartphones and the growth of office machines slowing, there was a firm logic to the choice of stepping in earnest into medical equipment, where its optical and precision-machinery technology could live. The price of $6.1B (¥666bn) was among the largest ever, but without the opportunity of Toshiba’s crisis it would have been hard to acquire, in one piece, a fine diagnostic-imaging business. As a direction for the business pivot, this decision made sense.
What remains is the rights and wrongs of the means. Prior notification under the Antimonopoly Act is a mechanism by which the authorities confirm in advance the effect on competition, and the reshuffling of shares that moved the money before that step ran ahead of the order the system had assumed. That the Japan Fair Trade Commission stopped at a “caution” rather than judging it a violation, that Fujifilm was indignant that it was unfair, and that the U.S. Department of Justice later imposed a settlement, together tell that this method carried a fineness of line that could be called neither white nor black. The necessity of the business pivot and the rightness of the means used to hurry it are asked separately. How far may a buyer accommodate the accounting convenience of a seller — this acquisition, which gained Canon a new pillar in medicine, still carries a tension between outcome and procedure.
What this episode illuminates is the arrival of an age in which the mandate to manage is measured on a coordinate separate from results or the size of one’s capital. What Mitarai held was not capital as a large shareholder. His personal shareholding was only about 0.01 percent; what sustained a quarter-century of command was not stock but the continuity of personnel and of the board. Against that continuity, the external yardstick of board diversity thrust a question of confidence for the first time. The figure of 50.59 percent was not the result of shareholders raising the flag of revolt over deteriorating results. It records the fact that, on the single point of the board’s make-up, the effective supreme power-holder was pushed to the very brink of resignation.
At the same time, this case reflects the lightness of diversity as a yardstick. The answer Canon prepared the following year was to add a single female outside director. That alone returned the approval rate to the 90-percent range, and the advisory firms’ recommendation turned from against to for. While the speed of the correction demonstrates the effectiveness of external discipline, the lightness with which confidence returns on the addition of just one woman leaves the question of whether diversity is a reform that changes the substance of management or a form for winning back votes. A company long led by an effective founding family that holds almost no stock bowed, for the first time, to discipline from outside. Its substance is for the board to come to take on.
Each heading links to the full Japanese analysis — background, decision and outcome, with sources.
This is a condensed English edition. The full, source-by-source history — with the detailed narrative, financial tables, shareholders and executives — is maintained in Japanese: 日本語版（詳細）— Canon full history in Japanese →
Canon Inc. — 有価証券報告書 (annual securities reports) and earnings briefings (決算説明会).
Shin Nihon Keizai — 新日本経済, 20 Oct 1950 (Mitarai on the low regard for Japanese goods).
Diamond — ダイヤモンド (Diamond Inc.), 23 Oct 1956 (the Shimomaruko plant).