When it rains, it pours.... Konica-Minolta has just announced its withdrawal from the camera and photography business -- including digital photography. They are transferring most of their camera assets (including their digital Maxxum SLR series) to Sony. It's not surprising given that they lost JPY7,300 million on revenue of JPY117,000 million in FY2005 in their camera business.
Cameras: In camera business, we have reached an agreement with Sony Corporation(Sony), having numerous image sensor technologies such as CCD and CMOS, to jointly develop digital SLR cameras in July 2005. In order to continue to have our customers use Maxxum/Dynax lenses, and to maximize possibilities of the optical, mechanical and electronics technologies accumulated through development of SLR cameras in the years to come, we came to the conclusion that it was best to transfer assets concerning camera business to Sony. Since then, we have been negotiating with Sony, and as a result, we have reached an agreement with Sony to transfer a portion of assets regarding digital SLR camera system to Sony*1. In this relation, we have decided to withdraw from camera business*2, such as film cameras and digital cameras, within Konica Minolta Group as of March 31, 2006.Sony is planning to develop digital SLR cameras compatible with Maxxum/Dynax lens mount system, so that the current Maxxum/Dynax users will be able to continue to use them with Sony’s digital SLR cameras. In addition, we will consign camera service operations for Konica Minolta, Konica,Minolta brand cameras and related equipment to Sony.
Photography: In today’s shrinking photographic market represented by color film and color paper, we have been considering to scale back and to continue photo business at an appropriate size; however, when we foresee the photographic market, it is quite difficult to maintain profitability in this field, and we have decided to withdraw from photo business. As schemed below, we will, as much as possible, avoid causing any inconvenience in providing products to our worldwide customers in the course of withdrawal.
Konica was Japan's oldest camera and photographic supply company. Minolta was one of the stars of the postwar camera boom. It will be sad to see both leave the market.
In other news, Pentax is merging with Samsung.
Back in March 2005, I blogged about the compact digital camera wars and the prediction that the number of competitors would be halved in 2-3 years. This was the list I gave then:
- Canon
- Nikon
- Minolta
- Sony
- Kodak
- Pentax
- Olympus
- Panasonic
- Leica (Panasonic)
- Casio
- Ricoh
- Sanyo
>Kyocera/ContaxToshibaEpson
I never predicted the demise of Minolta because they had strong camera sales in 2004, but this did not necessarily mean profitability in today's cutthroat market. What about the future? My prediction is that the following companies will withdraw from the digital photography market in 2006: Kodak, Pentax, Casio, Leica, and Ricoh (indicated below in red):
- Canon
- Nikon
- Sony
- Kodak
- Pentax
- Olympus
- Panasonic
- Leica (Panasonic)
- Casio
- Ricoh
- Sanyo (OEM)
MinoltaKyocera/ContaxToshibaEpson
A shrinking market of manufacturers is nothing healthy for the market itself. I remember to have read somewhere that a famous company was keeping prices under costs in the attempt to take a big part of the market. As it seems, they are in their own way to success.
Luis - I agree. I think only the top 3 manufacturers (Canon, Nikon, and Sony) are profitable -- but even then just barely so. New digital cameras are only profitable for the first few months, then prices have to be slashed to below costs in order to clear the shelves for the next generation. It's an unsustainable situation.
With the competion shrinking the "Big Three" can really set stout prices for photographic equipment. I think it's time to go back to robotics; This business is changing by the hour and I'm scared to invest in expensive equipment that will be abandoned by the manufactor a few months later.
IMHO, they are charging only the production costs, and giving away the research costs in the hope to outrun everyone else that cannot follow the wild path. Given this frame Kyocera and KM made the right choice withdrawing from that madness.
BTW I'm fascinated about how smart is Cosina :).
Luis - Cosina is brilliant in refusing to go digital and staying in areas where there's still black ink.
David - prices will remain low for quite a while since the Big 3 are competing not only against themselves, but also against cell phone cameras, which are the biggest threat. Cell phone cameras (crappy as they might be) may in fact drive out photography as we know it.
Karen you are righ I can't understand the fanfare behind cell phones with cameras. The images are horrible. I guess teens love them because of the instant images. Karen what's your take on Leica? What is a cheap starter camera (rangefinder) and what lenses can you suggest? I must continue to use TRI-X and a manual camera.
Luis I forgot about Cosina with the Voightlander line. The R3 looks like a good deal.
Karen, in your post you mention that Pentax is merging with Samsung. Do you have any direct links to that? The only mention I have seen of anything like that is a joint venture between Pentax and Samsung.
Jerry -
Here's the official press release from Pentax:
http://www.pentax.co.jp/english/news/2005/i0522.html
http://www.dpreview.com/news/0510/05101201samsung_pentaxdslrs.asp
My prediction is that Samsung will purchase Pentax's camera division outright pretty soon. Pentax is struggling and their only asset is their digital SLR division, which is not competitive with Canon and Nikon.