Home > News
  print button email button

Sunday, Jan. 22, 2006

Digital shakeup leaves most traditional camera makers reeling


Staff writer

Business is booming at the camera shop managed by Hiroaki Kitahara, but he has a sense of emptiness regarding the past and is worried about the future.

News photo
Fumio Iwai, president of Konica Minolta Holdings Inc. (right), announces last week that the firm is withdrawing from the camera business.

His major secondhand shop in Nakano Ward, Tokyo, is an outlet of Fujiya Camera Co., and it has seen a rush of customers buying Nikon cameras and lenses immediately after the world's top camera maker announced Jan. 13 it is terminating most of its prestigious lineup of film-based cameras to concentrate on the digital variety.

"We've received more than 10 times the orders for Nikon products than in an average month," Kitahara said in a telephone interview Friday. "Window cases of (Nikon products) are now almost empty."

For everyone who loves photography, Kitahara said, Nikon is a special name. Nikon Corp. has long led the global camera industry with its robust and precise professional cameras and interchangeable lenses.

The shock for the camera industry, however, did not end with Nikon's announcement. The Konica Minolta group, another prestigious maker, announced Thursday it will withdraw from the photo business, ceasing production of analog and digital cameras, and film.

Konica Minolta Holdings Inc. was born in 2003 through a merger of 130-year-old Konica Corp., Japan's first color film maker, and Minolta Co., the firm that in 1985 put out the world's first practical auto-focus single-lens reflex camera.

Nikon, Minolta and Konica have all been big names in Japan's camera industry, a symbol of the country's renowned precision instruments industry.

For camera makers, however, nostalgia must give away to the cold reality of digital technology.

Production of film-based cameras by Japanese firms fell to 4.88 million units for January to November last year, down from 29.95 million units in the corresponding period in 2000, according to the Camera and Imaging Products Association.

Meanwhile, production of digital cameras surged to 58 million units during the same 11-month period in 2005, from 9.6 million units in 2000.

"It's only natural that Nikon has shifted toward digital cameras," said Ryosuke Katsura, senior analyst at Mizuho Securities Co. He predicts that Canon Inc., Nikon's main rival, will eventually follow the same path.

In the digital age, only firms with both mechanical and optical technologies as well as semiconductor technologies can maintain competitive advantages on the market, he pointed out.

According to Katsura, costs of semiconductor devices account only around 5 percent of the total production costs for a single-lens film-based camera. But the percentage is about 30 percent to 40 percent for a digital SLR camera.

This has given electronics companies such as Sony and Canon a key advantage in producing digital cameras, and prompted camera makers Pentax Corp. and Olympus Corp. to form alliances with Samsung of South Korea and Matsushita Electric Industrial Co., respectively, to survive, he said.

This reality is also a factor that forced Konica Minolta to give up its camera business, according to the company.

The key component in the digital camera is the CCD, a semiconductor sensor device that generates image signals, which plays the role of film in a conventional camera. But Konica Minolta could not produce this key device, which pushed up component purchasing costs and often caused delays in marketing, the firm said.

For surviving players in the digital market, the competition will be severe, industry watchers say.

Prices of digital products, given the fast pace of technological evolution, tend to fall much faster than those of conventional cameras, squeezing profits of camera makers and retailers.

"To be honest, the digital camera business is more difficult than that of analog cameras," Kitahara of Fujiya Camera said.

Now it is virtually just Canon, which can produce almost all key components from scratch, that is generating a comfortable profit, according to Katsura of Mizuho Securities.

Sony has concluded a deal to purchase the camera segment of Konica Minolta, but it will not take over their compact, lens-shutter camera business. Compact digital cameras now generate little profit for most makers, which have prompted many of them to shift toward the more lucrative SLR business.



We welcome your opinions. Click to send a message to the editor.

The Japan Times

Article 6 of 7 in National news

Previous Next



Back to Top

About us |  Work for us |  Contact us |  Privacy policy |  Link policy |  Registration FAQ
Advertise in japantimes.co.jp.
This site has been optimized for modern browsers. Please make sure that Javascript is enabled in your browser's preferences.
The Japan Times Ltd. All rights reserved.