Not so good news from KonicaMinolta

[clinton_abe]

I was looking at the KonicaMinolta website and they had a news

release on it entitled "Medium Term Plan- V-5 Plan", dated 3/25/05.

This is their five year plan. Things do not look good for the Photo

Imaging division. KM's goal is to get out of a continuing deficit in

this division by DOWNSIZING this division, and hopefully getting

this division to being profitable. They expect Net Sales to go from

267.0B yen in 3/05 to 160B yen in 3/09. This is a reduction of 40%.

However, they expect that the division will be profitable.

 

This is how they expect to do it-

 

Downsizing operations to quickly break away from deficit.

 

Major Strategies:

1. Scale down business size.

1) Downsize film and photo paper business.

2) Camera business:

Downsize business size;

Concentrate on high-value-added products;

Break away from chronic deficits.

 

I am interested in seeing what KM means by "Concentrate on high-

value-added products". I also hope they will continue to produce

paper for photo ink-jet printers as they have some very good paper,

better than Canon's and at a lower price.

 

If you want to see the release for youself, go to konicaminolta.com.

[edward_h]

The first example of "high-value-added products" I can think of is printer inks: The printers themselves barely cost anything but the inks costs more than the printers in most cases.

 

What that would be mean in the camera business... hmm... Hard to say. But either way: I'd be doubting that buying a Minolta system right now would be the smartest thing in the world to do.

[andy_johnson1]

See:

<http://money.cnn.com/2005/03/25/news/international/konica_minolta.reut/index.htm?section=money_latest>

 

"We will not chase after sheer volume in the digital camera market," Iwai said, adding the company would focus on high-end digital single lens reflex cameras"

 

Andy

[coconutdaydream]

i seriously almost s**t a brick when i read that

because i just sold all my canon gear to switch back to minolta

for the 7d, and i still miss my maxxum 9

[cmphoto1]

Andy,

 

Don't forget the next line in the quote:

 

"and shift some of its employees working on cameras to the optical devices division." The optical devise division makes lenses for DVD optical drives and for camera phones.

 

I do not think there is room for a full frame sensor in a Nokia phone.

 

To understand Minolta's future in cameras, we may need to look at Pentax.

 

And I will be receiving my first Maxxum 9 this week.

 

Chad is sad.

[clinton_abe]

I think what KM is saying is that 'film' is dead, well for them it is. I doubt that they will be putting anymore monies into film cameras, or into the development of Konica film or Konica photographic paper.

 

And it is not just KM that is saying this. Look at Kodak, they are in the process of becoming a digital image company. Fuji has to be in the same boat. I know when I talk to my friends at Fuji, they all talk about how film sales have dropped.

 

Everyone who shoots film will find it harder in the next five years to get their rolls processed. As more and more people move to digital, you'll see less and less places where you'll be able to get pictures developed. In a few years, film processing will be back to the way it was 25 years ago, where the rolls were sent to a central processing lab and took a day or two to get back.

 

As for KM getting to inks for printers, first they would have to have inkjet printers. KM, thru the Minolta side, has been into laser printers, while Canon has been into inkjet printers.

[kelly_flanigan1]

There is a hughe amount of money being made in inkjet ink. The advantage a company has in making printers; is to creat a new bastard printer; that ONLY accepts you ink cartridges. Going generic has radically less money to be made. Creating new freak cartridges is the proper business model; to get folks hooked on using you high profit cartridge; that nobody has cracked; refilled; copied yet. A friend at a printer/cartridge company says they CANNOT use an older design cartridge in new printer designs; new freak ones MUST be designed; to hook folks on the sweet cash flow of buying ink; with only their cartridge. Going generic is a fear; just like a drug company fears pills going generic.

[bill_tuthill]

Maybe "high value-added" products indicates a 9D sooner than a 5D,

but why the heck did they introduce the low-value-added Maxxum 70?

At this point I have more confidence in the future of Pentax than

K-M systems, unlike before the merger.

[sknowles]

It seems reasonable the semi-parent company (Konica) would make the decisions, which in effect will boost the corporate value and income, and as such it would jettison the old products, saving only a few valued products for marketing purpose and which have transfer value (eg. highend digital cameras). But considering Minolta's past decisions, they don't play well in the longer term for customers or themselves, and they end up still being a company with an identity problem. And they'll leave the market open for the rest to fill the demand, albeit less in digital cameras as projected.

 

I don't agree that film and labs will go away, it will just go to a smaller group of companies to fill the niche market. It's noted that some formats are actually increasing in sales, albeit small overall but big for the market, enough that some companies are developing new products (eg. Schneider lens introduced two new LF lenses for 8x10 and larger formats). And although local or national larger labs will go digital, some local labs will still invest in film since they're gaining customers to support the service.

 

The loss for Minolta will be the AF users who have to face the choice the manual focus system users faced over a decade ago when Minolta decided MF wasn't the future. Welcome to the club (sorry, not intended to be critical, just a reality check it was bound to happen, it just happened sooner than anticipated). We have to remember these companies don't make money on customers, they make it on selling products, and they're goal is to maximize that, and it's a trade-off of gaining/lossing customers. They're looking for new markets. Can you spell China and India? About a third of the world's population and yet to be tapped into Western consumerism.

 

Just my take. Intereting discussion. I'm moving to 4x5, keeping my 20-40 year old Minolta MF system alive and working. I'm going backwards in the process, until I can afford the digital 4x5 back ("That's a joke son." - Foghorn Leghorn).

 

--Scott--

[clinton_abe]

Bill- the Maxxum 70 was released before the announcement of the 5 year plan and it may possibly be the last film SLR they release. (Oh great, now we see them on eBay as Collector items as the last of the film SLRs.)

 

Scott- Isn't that what I said about film and labs that will process them? I don't know how old you are, but I remember those days when not every drugstore had a one-hour lab. Film processing was done at a central lab by Kodak, Fuji, Technicolor, etc. I was talking to a major Kodak distributor and he told me that many drugstores want to get out of the processing business, both film and digital, as it is getting to be unprofitable.

 

Kodak has a system that they inherited when the bought Applied Science Fiction, the company that developed Digital ICE, that would develop film without having to be hooked-up to a water or waste disposal source. The customer would put a film cartridge in the machine and the film would be pulled out and sprayed with a chemical that developed the film. Then it was scanned and turned into a CD. The film would turn black and the customer would get the CD back, but no negatives. (The film continued to develop until it was black and tossed.) The machine would allow the customer to pick out the shots they wanted to be printed with-in 4 minutes. This sounded like an ideal way to get around the loss of places that would process film the old way, as the machine didn't need to be hooked-up to a water source. The big drawback was that there were no negatives returned, although research done by the company showed that people would get used to it.

[jason hopper]

I read these off the KM Global site, this Version 5 first quarter adjustment to KM's medium term/integration plans is to be expected. The dust hasn't settled yet.

 

Printer ink/paper development & production fall under KM's Business Technologies (BT) segment, not PhotoImaging (PI). Their BT segment is the largest and most stable portion of KM's imaging businesses, but seems to also be under the gun.

 

What IS encouraging is KM's admission on page 4 of their "lack of competitiveness" in digital imaging development. This hard-to-make statement, combined with their proposed shift to high-value-added products (which they keep promising everytime one of these reports comes out) and what Mr. Johnson quoted leads me to think that KM still may not be done tilting at their DSLR windmill.

 

And remember KM did say, 2 years ago now, they were done with their film camera business.

[franka t.l.]

In fact the original Japanese phrase is a lot more exaggerated in its wording - in plain english, it reads, they need to stop the bleeding quick - sounds pretty serious to me.

 

I would interpret the document as a saying that KM would probably not be seriously active in the DC sector ( which might be good or bad ) as this sector is too fast paced, with not enough shelf porduct cycle time, thin on profit margin, and worst of all, you cannot carried forward a line of product easily to the nest one. And that's not just KM, even the might of Nikon, Sony, Olympus & Canon find it hard to maintain the DC lineup with any decent healthy profit gain.

 

On the other hand, everyone is looking for the DSLR market. The DSLR market, once break into, almost guarantee a certain lineage and customer loyalty as its all about a system approach, and it does cost the user to switch.

 

In the end, Its too early to tell, it might have to be a year or 2 before the DC market really saturate, and slow down to a nominal pace, and the DSLR market mature enough with enough varieties of models from various player before we can see how the market really come to be.