*NEWS*KONICA MINOLTA TO MISS TARGET ?
*NEWS*KONICA MINOLTA TO MISS TARGET ?
2005-10-12 at 10:47:00 am #13885
Konica Minolta’s Office Equipment Unit May Miss Revenue Target
Oct,05 — Konica Minolta
Holdings Inc., a Japanese maker of office equipment and digital
cameras, may miss the revenue target at its biggest division this year
as printer sales fall and rivals cut prices, the unit’s head said.
Printers contribute less than a fifth of sales at the business
technologies division, which accounted for 56 percent of Konica
Minolta’s total revenue in the fiscal first quarter. The unit, which
also sells copiers that are combined with printing, scanning and fax
functions, has forecast sales of 620 billion yen ($5.4 billion) for the
year ending March 2006.
“We may not make it,” Yoshikatsu Ota, Business Technologies
President, said in an interview last week in Berlin. Reaching the goal
will depend on “how much loss from the printer side we could cover
with the increase” in sales of multifunctional products.
The Tokyo-based company, set up after Konica Corp. and Minolta Co.
merged two years ago, is relying on sales of more profitable
multifunctional color copiers to help counter losses from the digital
camera division. President Fumio Iwai has narrowed Konica Minolta’s
product line, focusing on single-lens reflex cameras that are more
expensive and aimed at professionals.
Shares of Konica Minolta have dropped 25 percent this year, making it
the second-worst performer on the Nikkei 225 Stock Average, which has
gained 15 percent in the same period. The shares fell 2.3 percent to
1,024 yen on Oct. 7.
Worldwide shipment of printers, copiers and multifunctional products
will probably increase by 7.8 percent to 124.7 million units in 2005,
buoyed by higher demand for color devices, researcher Gartner Inc.
forecast in August.
Even as unit sales rise, falling prices have forced manufacturers to
cut profit forecasts. Seiko Epson Corp., the world’s No. 2 printer
maker, last month slashed its full-year profit target by 50 percent
because of falling prices for inkjet printers and flat-panel displays.
To arrest a decline in printer sales, Konica Minolta has introduced
cheaper multifunctional copiers, such as the C250 model, which features
copy speed of 25 pages a minute, to attract smaller business customers.
Konica Minolta’s second-quarter sales of multifunctional products, or
MFPs, were “slightly above budget,” Ota said. The business
technologies unit plans to sell between 140,000 and 150,000 units of
MFPs in the current financial year, he said. The unit sold 19,200 color
MFPs in the first quarter.
The company plans to sell at least 50,000 MFPs this year in Europe
alone, said Robert Sethre, a Germany-based sales and marketing manager
at Konica Minolta. In Europe, Konica Minolta ranked No. 1 in sales of
full-color products in the first half of this year, with a 34 percent
market share, according to researcher InfoSource.
Sales at the business technologies division were little changed at
137.2 billion yen in the first quarter, and the unit has forecast
first-half revenue of 290 billion euros.
Konica Minolta’s photo-imaging unit, which sells digital and film
cameras as well as lenses and other photographic materials, narrowed
its first-quarter operating loss by 63 percent to 729 million yen. Ota,
also a board member at Konica Minolta’s holding company, said the unit
plans to further cut losses.
“The photo imaging sector has to be brought into a better shape,” Ota said.
Digital camera makers such as Olympus Corp. and Fuji Film Co. have also
reported losses in their camera divisions on price competition and
falling demand. Olympus, which reported a 62 percent decline in
first-quarter profit, plans to cut 30 percent of its workforce at its
camera unit this year.
Ota said a combination of the camera unit with a competitor is “one
possibility.” He declined to say if the company is in discussion with
“Olympus and Panasonic are very good corporations. Yet are they at all compatible? I don’t know,” he said.