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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.
Overtook Sony
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.
Higher Forecasts
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.
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