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 user 2005-03-23 at 10:37:00 am Views: 57
  • #11003
    Canon refocuses as
    digital camera growth slows

    AMSTELVEEN, Netherlands, March 05 -Surging demand for digital compact cameras in Europe is slowing, and Japan’s
    Canon Inc. said on Friday it was focusing on more expensive cameras, printers,
    and even flat screen televisions

    Last year saw digital camera sales in Western Europe
    increase 58 percent to just over 25 million units, but while that growth may
    slow to 25 to 30 percent amid continued price pressure, the market for more
    advanced digital Single Lens Reflex (SLR) cameras will double by the end of

    “This year there will be
    something like 25 to 30 percent unit growth for the market. In the worst case
    there could be no real value increase (due to price pressure). But we still have
    a positive outlook on Canon’s position,” Canon’s European chief of Consumer
    Imaging, Mogens Jensen, told Reuters in an interview.

    “We predict the digital SLR market will double in size
    by the end of 2006,” he said, adding that this would be largely driven by the
    company’s new SLR camera for photo hobbyists.

    those types of cameras only represented one-thirtieth of the total digital
    camera market last year, according to market research group IDC, it is a much
    bigger portion in value terms and profits as SLRs devices sell for around 1,000

    strength in high-end cameras was one of the reasons Canon reinforced its leading
    position in Western European digital camera sales, capturing a 16.8 percent
    market share in 2004, up from 16.2 percent in 2003, IDC said.

    Sony is
    No. 2 with 14 percent, Olympus No. 3 with 12.5 percent and Nikon No. 4 with 10.4


    on prices was severe last year, with an overall price erosion for compact
    digital cameras of over 15 percent. The Japanese and American markets, which had
    adopted digital photography earlier, slowed down ahead of Europe and large
    batches of older products were shipped to Europe.

    year a lot of companies had excess stock. What usually happens in such a case is
    that they move it to the strongest growth market and dump it,” Jensen said.

    it had no inventory to burn itself, Canon could sell “fresh” products and
    maintain profit margins, Jensen said.

    European sales, including faster-growing regions like eastern Europe, increased
    12.6 percent to 1,091 billion yen ($10.40 billion), and passed the Americas as
    Canon’s biggest geographic market. It was already ahead of Japan.

    Profitability in Europe, however, at a 2 percent operating margin, was
    well below the firm’s overall 16 percent last year. Jensen said this was due to
    a higher services mix elsewhere and that product profitability was in line with
    the average.

    growth engine is the photo printing market. Canon saw global compact photo
    printer sales quadruple last year.

    another key growth market. It still looks like 20 percent of all photos are
    being printed.” Like other printer makers, Canon keeps making money on ink
    cartridges after the sale of a printer — it is how most printer makers generate

    hitting the market late this year will be flat TVs, a new market segment that
    Canon dares to enter because of a new thin display technology developed with
    Toshiba. The SED technology uses less power, is thinner than current liquid
    crystal displays and has better image resolution.

    production is this year, but real sales start in 2006. Also in Europe. It’s
    mainly for the high end of the market (bigger screen sizes),” said Jensen.

    He said
    the move into flat TVs was part of Canon’s strategy to be a leading company in
    imaging and that output, either on a printer or on a TV display, was part of
    that plan.