CANON ENTERS TV MARKET
CANON ENTERS TV MARKET
2006-05-15 at 10:28:00 am #15428
Canon Names Uchida President as It Enters TV Market
May 06 — Canon Inc., the world’s biggest maker of copiers and digital cameras, named Tsuneji Uchida as its first new president in a decade as the company enters the $85 billion flat-panel television market.
Uchida, 64, replaces Fujio Mitarai, who will head Japan’s biggest business lobby after overseeing a sevenfold increase in profit during his 10-year tenure. The changes are effective May 23. Tokyo-based Canon’s market value of $68 billion makes it Japan’s second-largest manufacturer after Toyota Motor Corp.“Sooner or later, printers and copiers will become commodities, and Uchida will face challenges to keep up margins,” said John Yang, an equity analyst at Standard & Poor’s in Tokyo who has a “strong buy” rating on Canon. “He needs to keep up or exceed the 10-year legacy of Mitarai. He will have to balance out spending to keep double-digit margins.”Uchida, head of a screen-making venture with Toshiba Corp., is spearheading Canon’s foray into the flat-TV market to compete against Matsush*ta Electric Industrial Co. and Sony Corp. His challenge will be to realize Mitarai’s $50 billion sales target for 2010 with the display business, acquisitions and cost cuts.“The one thing lacking at Canon right now is the screen where we can watch high-quality images from our cameras and printers,” Uchida said at a Tokyo news conference today.The company also announced today it will split its stock 3- for-2 and plans to raise its second-half dividend to 60 yen from 50 yen. Canon now plans to pay a 110 yen dividend for the year ending Dec. 31, compared with 100 yen for the previous year.Shares of Canon, which have risen 23 percent this year compared with a 3.7 percent gain in Japan’s benchmark Topix index, fell 40 yen to 8,500 yen on the Tokyo Stock Exchange.
An engineering graduate of Kyoto University, Uchida joined Canon in 1965. He was promoted to senior vice president in January. He will also assume the title of chief operating officer.Uchida, who was head of Canon’s camera unit, oversaw the launch of IXY compact digital cameras and helped the company overtake Sony as the world’s biggest digital camera seller two years ago.The Toshiba venture is developing a new screen technology called surface-conduction electron-emitter display that offers greater clarity and uses less energy than liquid-crystal displays or plasma televisions.“To spur more growth, he doesn’t only have to succeed in SED, but make that another core product of Canon,” Yang said.
Mitarai, 70, will remain chief executive officer of Canon and become chairman. He succeeds Toyota Motor Corp. Chairman Hiroshi Okuda as head of the Keidanren business lobby group later this month.Mitarai, who spent 23 years working in the U.S., has sold off unprofitable divisions such as personal computers and calculators to improve earnings. He also got rid of conveyor belts at Canon’s factories to trim production costs and improve margins.Canon’s operating profit margin of 15.5 percent exceeds Toyota’s 8.9 percent and 2.6 percent at Sony.The company last month raised its annual sales forecast, saying revenue will gain 19 percent to 4.14 trillion yen. Profit is projected to rise 12 percent to 432 billion yen this year from 384.1 billion yen.“The next five years is a time of expansion, driven by new technologies,” Mitarai said. “That’s why I was looking for an engineer to lead the company.