Fuji Photo Q2 profit down, eyes more restructuring

[bmattock]

I would want an "inside track" in a market like China's.

Shazam. Dated: Today. Kodak. China. New Boss. Wowzer.

Kodak Names Ying Yeh and Warren A. Wisnewski to Lead Asia; Smith-Pilkington to Pursue Other Business Opportunities

How interesting!

 

[pvdhaar]

Well, there's a large percentage of the Earth population that still cannot afford a digicam...

Well, this is something I always believed as well, until I looked up some offerings the mayor retailers have. You can get a decent brand autofocus 2MP digital P&S for about 70 EUROs and the cheapest autofocus film P&S are about 60 EUROs. Add the price of a single roll of film with development, and it's about equal.. Guess what people buy who have about 60-70 EURO to spend..

I talked to a guy that had a 1hr lab until recently. He told that the amount of film had become so low that he couldn't keep the chemicals of the processor good anymore. They went bad all the time, and he couldn't correct the colours anymore. So, the film processor went, and he's now got a digital 1 minute 'kiosk' which sees some decent action.

Even single use cameras that were adding to the turn over from film manufacturers seem to have gone the way of the dodo.. I haven't seen one used since about 6 months or so..

 

[Nikon Bob]

What will happen to film manufacturing will happen and at it's own speed. When the sky has stopped falling then I will be in digital mode and not before. That way you can enjoy a fully matured product, film. at a decent price and wait for the overpriced POS digital gear that every manufacturer is trying to flog you to come to the price point where it offers reasonable value for price.

Bob

 

[bmattock]

I would want an "inside track" in a market like China's.

More info:

http://www.vnunet.com/vnunet/news/2145259/megapixel-war

Megapixel digital camera war is over
Cheap cameras to focus on features, not pixels
...
Between 40 and 50 per cent of the world's digital still cameras are manufactured in Taiwan by large, but low-profile, companies like Premier, Ability Enterprise, Asia Optical and Altek.

Most of this output is made for and sold by well-known foreign brands like Olympus, Nikon, Samsung and Konica, which are gradually cutting back on their own manufacturing facilities.
...
The Taiwanese camera makers greatly limit sales of their own-brand products in order to avoid competing with their manufacturing customers.

For example, only five per cent of Premier's output is sold under its own brand, mostly in China. Premier's foreign customers include Sony and Hitachi, according to local press reports.

I'm not sure I agree with all the conclusions in this article, but it is an interesting read anyway.

Best Regards,

Bill Mattocks

 

[bmattock]

What will happen to film manufacturing will happen and at it's own speed. When the sky has stopped falling then I will be in digital mode and not before. That way you can enjoy a fully matured product, film. at a decent price and wait for the overpriced POS digital gear that every manufacturer is trying to flog you to come to the price point where it offers reasonable value for price.

Bob

Well, I agree with that, except that I like new technology as well as old, so I have a foot in both worlds. My DSLR has saved me a lot in terms of my time spent preparing product for customers - paid for itself already. Others will find that not to be true for them, but it is for me.

"Reasonable value for price" is a subjective term. I'm already there.

Best Regards,

Bill Mattocks

 

[zeos 386sx]

Bill,

Thank you for the Vnunet link. Kodak is entering a really tough market.
------------------------
"For example, only five per cent of Premier's output is sold under its own brand, mostly in China. Premier's foreign customers include Sony and Hitachi, according to local press reports."
------------------------
5% of Premier's output must be a huge number of cameras.
------------------------
"In terms of quality, Taiwanese manufacturers are still catching up with Japanese companies, but we are more cost efficient," said the Premier spokesman.
------------------------
The fact that the Premier spokesman would even mention quality suggests that it is an issue to it's customers (this sounds like the Japanese 40 years ago). Kodak might have an edge here - at least for a while.

Print services is another area where Kodak might be very competitive in China.

 

[ClaremontPhoto]

What's this USA thing with quarterly profits?

Any great company is in it for the long term.

Rolls-Royce, Nokia, CNN... we don't worry because they made have made a loss in the past three months do we?

It's a USA thing, and makes me happy I am in EU.

 

[bmattock]

What's this USA thing with quarterly profits?

Any great company is in it for the long term.

Rolls-Royce, Nokia, CNN... we don't worry because they made have made a loss in the past three months do we?

It's a USA thing, and makes me happy I am in EU.

I agree that putting short-term profit in front of long-term sustainability is a "US thing" and is not a good thing, but sadly, the disease is spreading like denim jeans and rock-n-roll. Ultimately, public companies are responsible to their stockholders - that's the basis for this problem. Companies that have huge cachet and make their customers happy but don't make the stock price go up get broken up and sold, leaders get sacked - even if they make a 'profit' in the long term.

I'm not saying I agree with it - I'm with you. But it is what it is. Shareholders are nasty little buggers.

Best Regards,

Bill Mattocks

 

[zeos 386sx]

I don't know how the following information on lenses breaks down - whether this is speaking of individual lens elements or completed lenses - but Premier is making many each month "for own use".

-------------------------------------------------
"Premier Image Technology, the largest manufacturer of digital still cameras (DSCs) in Taiwan, expects its revenues and profits for this quarter to grow by about 30% from last quarter, according to company president Cliff Liu at an institutional investor conference on October 26.

Premier also released its estimated financial performance for the third quarter of this year on October 26. The company’s gross margin of 14.2% for the third quarter was lower than the 15.2% recorded in the second quarter of this year, lower than a rate expected by institutional investors. This was due to many more OEM orders than ODM orders, Liu explained. ODM shipments, however, as a percentage of total revenues, are expected to exceed 50% beginning this quarter, Liu added.

Premier is quite optimistic about receiving DSC orders in the first half of 2006, Liu indicated. The company has started development of DSCs for delivery in the third quarter of next year and plans to offer models with eight megapixel resolution and 6x optical zoom, Liu noted. However, the ASP (average selling price) of DSCs for 2006 is estimated to drop by 5-10% from this year due to intense price-cut competition, Liu pointed out.

With a current monthly production of 3-3.5 million plastic lenses and 6-6.5 million glass lenses for own use, Premier itself made 50% of the lens units that went into the DSCs it made this year and the self-supply ratio will rise significantly next year, Liu indicated."

http://www.digitimes.com/systems/a20051027A7040.html

----------------------------------------------------

 

[bmattock]

For those who have been following this discussion, I found an old Asia Weekly interview about Kodak investing in Lucky Film Company in China and why they were doing it (at the time).

http://www.asiaweek.com/asiaweek/98/0501/biz1.html

Kodak's China Moment
The U.S. giant may set a business precedent
By Cesar Bacani
...
ZOOM IN ON THIS. An economy growing at 8% or better a year with less than one in 10 households owning a camera. A population of 1.2 billion people, a fifth of humanity. An $800-million photographic film and paper market that is the world's third-largest after the U.S. and Japan. Click. That's China. "If only half the people there shot a single 36-exposure roll of film a year -- a fraction of usage rates in other countries -- that would swell the number of worldwide 'clicks' by 25%," says George Fisher, chief executive officer of American giant Eastman Kodak. "Each second, 500 more photos will be taken. That is the equivalent of adding another U.S. or Japan to the world photographic market."

Well, that was in 1998. Kodak went on to purchase a 20% stake in Lucky, George Fisher has gone on to who knows where, Antonio M. Perez is CEO now. Premier Zhu Rongji is gone as well. And I don't think that Kodak expects to sell much film in China anymore.

 

[Flyfisher Tom]

Bill,

I am waiting for JETBLUE or SOUTHWEST AIRLINES to take over Fuji and Kodak's film businesses ;-)

Big bloated film companies, not unlike Delta, United and NW may not be able to make a profit. But perhaps the new smaller players who pick up these film units may be more nimble.

Fingers crossed!

 

[George S.]

Well, the sky is falling faster than we all thought. Just in my local area, ( NJ ) Kodak closed the nearby film processing facility along with NINE other facilities in the rest of the U.S. (August).

Today, Fuji announced that its nearby film processing facility will close by Dec 25th, and that all 169 employees will be laid off, and the business will just close, no sell-off of equipment. I guess no one is lining up to take the film equipment away...

I still like to shoot film, but digital is just so much easier and you really can't tell the difference any longer... I will continue my use of film, but I'm getting worried that in a year or two I'll be searching for a place, ANY place that'll develop my film.

 

[bmattock]

I'm sorry as hell to hear it, George. Some may believe I'm happy about this, but I'm not. I've just been trying to point out something that even the film manufacturers are just waking up to - that no technological shift has ever happened as quickly as this one. Companies are starting to run to close factories as fast as they can - there literally is no time to lose to get out of the film business if they want to survive.

Sadder, I don't share your belief that digital is as good as film. For a 4x6 print, sure - any 4 mp digicam will do, just about. For 8x10, I find my 6.2 mp DSLR is ok - but not much beyond that, and I can't truly crop too aggressively - with a scanned 35mm frame, I can crop pretty much as I wish without losing too much quality, assuming my lens and lenswork was up to the task.

I suspect that we'll all be saying "What the H*#&@ happened?" in a year or so. B&W should continue for awhile yet, though. God, I hope so, anyway.

Best Regards,

Bill Mattocks

 

[Uncle Bill]

Why is it I am the only one wondering aloud about the one achiles heal for digital photo media: Storage media's rapid evolution and obseclence (sp) even in the last 10 years. I remember Sony had diskettes as memory for their Digital cameras. In the next ten years you will not be able to access your family snapshots as computer operating systems and storage technology will have so rapidly changed you will not be able to access the old CD-Rs.

Bill
Bill

 

[djon]

When a company is listed on a stock market, the idea of "profit" is pretty much irrelevant to the stock price. The stock price has mostly to do with * anticipated upside*, the future, not efficiency, profitability etc. Yes, earnings are a short term concern and profits are interesting on the side, but the driving question is the future. If shareholders (meaning institutional investors) decide there's no future in film, Fuji will drop it faster than Kodak is doing. It's their CEO's duty.

The only reason Fuji/Kodak continue to make and sell film is that they need the remaining film cash flow. But cash flow from film is dropping like a rock...soon their CEOs will order them *entirely* out of film...I'd bet it's 2007.

As for digital quality, 6-8 MP is history. Next year's better prosumer cameras will all be 10MP APS, significantly better than current D70/20D, and even those 8MP antiques really do make nice 16X20...unless one is using the kit lens. Check out the new Sony: 10MP/APS/Zeiss lens: will be under $1000.

My own serious entry into dslr may be the current Pentax, because of the finder and the prime lenses. But I do plan to hold out until I've shot at least another 20-40 rolls of 35mm chrome, as much B&W, as well as the 24 120 (for 6X9) chrome that's on the way.

I'm trying to give film an honorable farewell, a viking funeral.

 

[Solinar]

That's why I tell all my friends with DSLR's to buy a decent photographic printer and print at least most of their work. Let's hope for some backward compatabilty on future storage media.

 

[bmattock]

Why is it I am the only one wondering aloud about the one achiles heal for digital photo media: Storage media's rapid evolution and obseclence (sp) even in the last 10 years. I remember Sony had diskettes as memory for their Digital cameras. In the next ten years you will not be able to access your family snapshots as computer operating systems and storage technology will have so rapidly changed you will not be able to access the old CD-Rs.

Bill
Bill

Bill,

You're right that digital storage media of various types have come and gone. However, the same files I stored on a hard-sectored 5.25 inch floppy, then a 1.44 3.5 floppy, then a Colorado Memory Systems tape backup, then a Jazz Drive, then a CD-ROM and now a DVD are still readable and useable by me. Yes, the media changes, but you change with them and copy the files over.

Unlike transfers from analog to digital domains, nothing is lost. When you copy an old family 8mm movie reel to VHS, something was lost in translation. Copy again, lose more. Finally copy to a digital medium such as CD-ROM and now it is preserved. It may well be degraded from the various moves from analog to analog and finally to digital, but it will never lose quality again as it is copied from one digital medium to another.

And when holographic laser cubes that hold petabytes of information become the fashion, we'll copy them over again.

Paper will decay. Film stock will decompose. Digital files will remain if cared for properly and kept in a current format. That requires discipline. Just like archival storage of photographic prints or negatives.

I work for a bank - about $100 billion USD in assets. We've had our client's money digitized since the IBM mainframe 1960's. We haven't lost a penny, but we can't read punch cards anymore. We keep moving the data to whatever is newest, we keep backups, we practice file restores, and we have a process for recovery. Your money is safe - and so are your digital photos, if you take care to protect them, back them up, and move them to new media as technology marches on. Unlike analog changes, nothing will be lost.

The Library of Congress isn't taking paper backups of all its stacks, it is digitizing them all for safekeeping. The originals may one day crumble to dust - the digital copies need not.

Best Regards,

Bill Mattocks

 

[bmattock]

That's why I tell all my friends with DSLR's to buy a decent photographic printer and print at least most of their work. Let's hope for some backward compatabilty on future storage media.

No need to hope, it is always the case.

Problems would arise if a media is left unattended for decades while many generations of newer technology came and went, and THEN the owner wanted to retreive the data. For example - today, I can, if I want, hook a 5.25 inch floppy drive up to my PC - it still has a 'floppy drive interface' on the motherboard and in the CMOS of my PC. I could then read my old 360K disks. I can even run NICE22 and read my old Kaypro CP/M disks from 1985. But within the next couple of years, if I haven't moved those files to something else, I may lose that option as newer machines stop supporting those archaic devices.

If people get themselves into a position where they cannot retreive data (and it has happened to me, I'm not perfect) they have only themselves to blame. Backups and duplicates are a way of life if you want any kind of assurance. Off-site storage is a pretty neat thing too. If you ignore all that, and lose your data - oh well. Same if your house burns down with your negs in it.

Best Regards,

Bill Mattocks

 

[Peter Klein]

For what it's worth, a Kodak rep spoke at the LHSA annual meeting in San Francisco last weekend. He expressed frustration that a lot of people were constantly trumpeting that "film is dead" (e.g. on the Internet). He said it distorts the picture, adding that it is very difficult for Kodak to get any alternate message out there.

He emphasized that Kodak plans to stay in the film business. Film will still be a significant part of the imaging business, and Kodak would be foolish *not* to be a part of it. They are indeed restructuring and reducing capacity to match what the they believe the market will eventually be. This means closing some facilities, reducing the number of films available, and the number of package variations (such as eliminating different names for the same film in different countries). All this may make it look like there is a headlong rush to eliminate film entirely, but he insisted that this is not what's actually happening.

A gentleman I was sitting with kept muttering an eight-letter word referencing bovine end-product. *He* predicted that Kodak would be out of the film business in two years.

We were also treated to some unconvincing reading of corporate boilerplate accompanying that bane of modern existence, the Powerpoint presentation (Link: Powerpoint is Evil! ). And he showed us Kodak's new marketing campaign, called, I believe "Gallery." Basically it has lots of cute kids marching through a virtual art gallery where all manner of images can be seen--everything from art and journalistic photos to your family snapshots. It says, in a warm-fuzzy way, that Kodak has meant images for the last century, and it will mean images in the next. Interestingly, most of the images shown were film images.

It's hard to know what to make of the talk. On one hand, some of the figures presented and corporate organization displayed were convincing. On the other hand, some of the later boilerplate and the video made me feel we were being "handled."

Where's the truth? Beats me. All I know is that if they take away my Tri-X, I'm going to be *very* pissed. I shot Neopan 400 this weekend, figuring I ought to know it better just in case. I guess the next step is to learn how to order film in Polish and Ukrainian. 🙂

--Peter

 

[George S.]

Hi Bill,

As everyone knows, it's much more than the pure MP count that make a good enlargement. I've found that some 2MP cameras are crap, and some give surprising results. I'm sorry to hear that your 6.2MP camera is just "OK". My Olympus E-10 (4.1MP I believe) produces great 8x10s. I know you know this, but the photo printer has a lot to do with the results the larger you go. For 4x6, just about anything will do. I'm not getting caught up in high MP count just yet. It's like a medium size car. Can company "A" give you good performance with 175 horesepower? Yes. Do you get that much better results with 275HP? Sometimes yes, sometimes no. But at 65-75 MPH, will we even see a difference?