Nikon says digital SLR cameras beating plan
Posted: Thu Jul 06, 2006 8:57 pmNikon says digital SLR cameras beating plan
By Nathan Layne and Kunihiko Kichise
Wed Jul 5, 7:16 AM ET
TOKYO (Reuters) - Japan's Nikon Corp. (7731.T) boosted shipments of digital SLR cameras by about 35 percent year-on-year in April and May, putting it on track to beat its annual estimate, the head of its camera unit said on Wednesday.
Nikon is the world's second-largest maker of digital single lens reflex (SLR) cameras after Canon Inc. (7751.T). Digital SLRs are generally more expensive and have more advanced features than point-and-shoot compact models, and use interchangeable lenses.
Senior Managing Director Makoto Kimura told Reuters in an interview that Nikon's factory in Thailand, which produces the popular D50, D70s and D200 digital SLR models, was running at full tilt to meet robust demand.
"Conditions for all three models are very tight worldwide. We can sell as many as we can produce," Kimura said.
Kimura said its performance in April and May had put the firm on track to exceed its forecast for digital SLR shipments to rise 30.6 percent to 1.75 million units this financial year to March. That forecast was unveiled with its earnings in May.
"We estimated growth of about 30 percent, but we are now moving at a pace that would allow us to beat that," he said.
Boosting sales of digital SLR cameras is an important task for Nikon as it continues to face stiff competition in compact models, which are much easier to produce and under intense pricing pressure due to an influx of low-cost makers.
Cameras account for more than half of Nikon's group sales, with most of the rest coming from chip-making equipment.
Competition is expected to get tougher with Sony Corp. (6758.T) and Matsushita Electric Industrial Co. (6752.T) due to launch their first digital SLR models later this month, and Kimura said he was not taking its new rivals lightly.
"I consider them both to be a threat. They may not have a big impact in the short term of one or two years, but from a long-term perspective of three to five years we will have to watch very closely the kind of products they bring to market."
MARKET REVIVAL
Kimura said he expected the global digital SLR market, which also includes Pentax Corp. (7750.T) and Olympus Corp. (7733.T), to expand by about 25 percent to 5 million units in 2006. A company spokeswoman later clarified that Kimura was referring to the current financial year to March 2007.
Canon held a 53.3 percent share in the global digital SLR market in 2005, followed by Nikon with 28.3 percent, according to research firm IDC. Including compacts, Canon was top with a 17.2 percent share and Nikon fifth-largest at 9.3 percent.
Canon really started pulling away from the pack in September 2003 when it launched the EOS Kiss Digital, the first digital SLR priced as low as around $1,000, which proved low enough to achieve mass-market appeal.
Nikon followed six months later with the D70, the predecessor to the D70s, at a similar price. Prices have been sliding since and Nikon's cheapest digital SLR, the D50, now sells for about $700 on Best Buy Co.'s (NYSE:BBY - news) Web site.
Kimura said he expected prices of the cheapest digital SLRs in the industry to fall to $500 within the next two years and then move toward $300.
"In the film era there were mass-market SLR models selling at $300. So there are people out there that want to take pictures with a SLR that costs about that much. I don't know when it will happen, but the next target after $500 is the $300 mark."
Demand for non-SLR cameras has also been strong recently, with industry-wide shipments rising 22 percent to 26.3 million units in the January-May period, according to the Camera and Imaging Products Association, which tracks Japanese makers.
Kimura attributed the surge in demand to an increase in cameras that have vibration reduction technology and other features that help users take better shots that would not be possible on a camera-equipped mobile phone.
"Makers are offering cameras that allow for really good picture taking. That is driving replacement demand," he said.
Despite the robust market conditions, Kimura stuck by Nikon's forecast for shipments of compact cameras to hold flat at 7.1 million units in 2006/07. "We are not going to try to overdo it when it comes to compacts and will proceed as planned."
Shares of Nikon closed down 0.5 percent at 2,040 yen, compared with a drop of 0.73 percent in the benchmark Nikkei average
By Nathan Layne and Kunihiko Kichise
Wed Jul 5, 7:16 AM ET
TOKYO (Reuters) - Japan's Nikon Corp. (7731.T) boosted shipments of digital SLR cameras by about 35 percent year-on-year in April and May, putting it on track to beat its annual estimate, the head of its camera unit said on Wednesday.
Nikon is the world's second-largest maker of digital single lens reflex (SLR) cameras after Canon Inc. (7751.T). Digital SLRs are generally more expensive and have more advanced features than point-and-shoot compact models, and use interchangeable lenses.
Senior Managing Director Makoto Kimura told Reuters in an interview that Nikon's factory in Thailand, which produces the popular D50, D70s and D200 digital SLR models, was running at full tilt to meet robust demand.
"Conditions for all three models are very tight worldwide. We can sell as many as we can produce," Kimura said.
Kimura said its performance in April and May had put the firm on track to exceed its forecast for digital SLR shipments to rise 30.6 percent to 1.75 million units this financial year to March. That forecast was unveiled with its earnings in May.
"We estimated growth of about 30 percent, but we are now moving at a pace that would allow us to beat that," he said.
Boosting sales of digital SLR cameras is an important task for Nikon as it continues to face stiff competition in compact models, which are much easier to produce and under intense pricing pressure due to an influx of low-cost makers.
Cameras account for more than half of Nikon's group sales, with most of the rest coming from chip-making equipment.
Competition is expected to get tougher with Sony Corp. (6758.T) and Matsushita Electric Industrial Co. (6752.T) due to launch their first digital SLR models later this month, and Kimura said he was not taking its new rivals lightly.
"I consider them both to be a threat. They may not have a big impact in the short term of one or two years, but from a long-term perspective of three to five years we will have to watch very closely the kind of products they bring to market."
MARKET REVIVAL
Kimura said he expected the global digital SLR market, which also includes Pentax Corp. (7750.T) and Olympus Corp. (7733.T), to expand by about 25 percent to 5 million units in 2006. A company spokeswoman later clarified that Kimura was referring to the current financial year to March 2007.
Canon held a 53.3 percent share in the global digital SLR market in 2005, followed by Nikon with 28.3 percent, according to research firm IDC. Including compacts, Canon was top with a 17.2 percent share and Nikon fifth-largest at 9.3 percent.
Canon really started pulling away from the pack in September 2003 when it launched the EOS Kiss Digital, the first digital SLR priced as low as around $1,000, which proved low enough to achieve mass-market appeal.
Nikon followed six months later with the D70, the predecessor to the D70s, at a similar price. Prices have been sliding since and Nikon's cheapest digital SLR, the D50, now sells for about $700 on Best Buy Co.'s (NYSE:BBY - news) Web site.
Kimura said he expected prices of the cheapest digital SLRs in the industry to fall to $500 within the next two years and then move toward $300.
"In the film era there were mass-market SLR models selling at $300. So there are people out there that want to take pictures with a SLR that costs about that much. I don't know when it will happen, but the next target after $500 is the $300 mark."
Demand for non-SLR cameras has also been strong recently, with industry-wide shipments rising 22 percent to 26.3 million units in the January-May period, according to the Camera and Imaging Products Association, which tracks Japanese makers.
Kimura attributed the surge in demand to an increase in cameras that have vibration reduction technology and other features that help users take better shots that would not be possible on a camera-equipped mobile phone.
"Makers are offering cameras that allow for really good picture taking. That is driving replacement demand," he said.
Despite the robust market conditions, Kimura stuck by Nikon's forecast for shipments of compact cameras to hold flat at 7.1 million units in 2006/07. "We are not going to try to overdo it when it comes to compacts and will proceed as planned."
Shares of Nikon closed down 0.5 percent at 2,040 yen, compared with a drop of 0.73 percent in the benchmark Nikkei average
