Camera Digital Canon

Digital Camera Market May Shrink in 2009

Executive Summary about Camera Digital Canon by. Kiyoshi Takenaka and Noriyuki Hirata

The global digital camera market may contract next year, the president of industry leader Canon Inc (7751.T) warned, as sluggish economic conditions dampen consumer demand.

The economic slowdown has started to hit sales of digital single-lens reflex (SLR) cameras -- high-end models that use interchangeable lenses -- but overall Canon's camera sales are solid ahead of the year-end shopping season, Uchida said.

Global digital camera demand grew 24 percent to 130.7 million units in 2007, according to research firm IDC, and Canon and its top rivals, which include Sony Corp (6758.T) and Nikon Corp (7731.T), are still forecasting sales growth this year.

Canon last month cut its 2008 compact digital camera sales forecast by 6 percent to 23.5 million units, though that would still mark a year-on-year jump of 10 percent. That has meant big profits for Canon and Nikon, which dominate the high-margin segment of the market.

Uchida said SLR demand was starting to show signs of "stagnation" but that it was not enough to knock its overall camera sales forecasts off track.

Uchida said the system will cost about 20 billion yen to implement but will generate cost savings of about 100 billion yen. Canon's office machine business suffered a setback in late August when Ricoh agreed to buy U.S. office equipment distributor Ikon Office Solutions for $1.6 billion, placing a key sales channel for Canon products into rival hands.

Shares of Canon have tumbled 47 percent since the Ikon deal was announced, underperforming a 38 percent drop in the benchmark Nikkei average, as analysts warned the loss of Ikon could mean a significant fall in Canon's market share in the United States.

"Some people ask us why Canon does not get more aggressive in M&As with all this cash," Uchida said.

Canon Q4 Profit Tumbles, Predicts Further Slide

Executive Summary about Camera Digital Canon by. Kiyoshi Takenaka

Japan's Canon Inc (7751.T), the world's largest digital camera maker, reported an 81 percent fall in quarterly profit and predicted a further slide in annual profit to a 14-year low this year, hit by slumping demand for cameras and office equipment and a stronger yen.

While most Japanese companies close their books on March 31, Canon's business year ends on Dec. 31.

Canon, which makes EOS and IXY brand digital cameras, expects its operating profit to fall 68 percent to 160 billion yen ($1.80 billion) in 2009, the lowest in 14 years, after posting its first annual operating profit decline in nine years in 2008.

FROZEN DEMAND

Without the negative effect of a firmer yen, its operating profit would have been 677.1 billion yen in 2008, instead of an actual 496.1 billion yen, Canon said.
For October-December, Canon's operating profit totalled 35.8 billion yen, the smallest quarterly profit since it started reporting quarterly earnings in 2001. Net profit fell 91 percent to 11.6 billion yen.

Before the acquisition, Canon machines accounted for 60 percent of the products Ikon handled. Shares of Canon closed up 0.4 percent at 2,590 yen before the announcement, compared with a 0.9 percent rise in the Tokyo market's electrical machinery index.