Nikon sticks to camera guns while rivals reload in other sectors
By Reiji Murai and Sophie Knight
TOKYO (Reuters) - Japan's iconic camera maker Nikon Corp (7731.T: Quote) will rely on emerging market consumer sales to fuel growth even though it forecast in August its first-ever drop in digital SLR sales, the company's president told Reuters.
Makoto Kimura said on Tuesday Nikon is counting on consumers in markets like Brazil and India to drive sales of its single-lens reflex cameras (SLRs) in the mid-term and has no immediate plans to follow its rivals into other sectors.
Canon Inc (7751.T: Quote) for example, is hedging against further downturns in the consumer market with a push into surveillance cameras and Olympus Corp (7733.T: Quote) already relies on medical equipment for most of its profit.
"Penetration in emerging markets is still very low," Kimura said. "Look at Brazil where we sell around 8 million cameras overall. Only some tens of thousands of those are SLRs. That's why I don't think that sales will drop that much... When people realize the value of an SLR I think we will naturally see growth."
But with more than two-thirds of its revenue coming from cameras and its new ventures years from bearing fruit, analysts say Nikon is vulnerable to a prolonged slump in the camera market, particularly as consumers continue to switch to smartphones for their daily photographic needs.
"Nikon is sort of a pure player in photography, as it has been for decades," said Chris Chute, research director of digital imaging at IDC, which reversed its forecast for sales of SLR cameras in 2013 to an 11.3 percent drop from an earlier forecast of an 11.9 percent increase.
It may be "time to have a larger conversation about the brand and the technology and where company executives plan to take that," Chute said.
Nikon has cut its full-year sales forecast for interchangeable lens cameras twice already this year, with global shipments of digital SLRs sliding 16.7 percent in the nine months between January to September, according to Japan's Camera and Imaging Products Association (CIPA). Continued...