Konica Minolta sees big loss, steps up restructuring

[bmattock]

Nathan Layne wrote this? Wow!

Reuters Story: Konica Minolta Big Loss - Click Here

The long and the short of this news announcement - just like Fuji and Kodak, it is more of the same - Konica Minolta is getting out of the film-manufacturing business as fast as it can.

However, KM is taking the further steps of dropping film-based SLRs (bye-bye Maxxums), and they are claiming they want to be more of a B-2-B company (think Ricoh). However, they say they are staying the course on their newest business venture, a collaboration between themselves and Sony on DSLR technology.

Konica Minolta film has never been a big seller here in the USA, but I am worried that we may have seen the high-water mark from their dedicated film scanners, and I'd hate to see their excellent anti-shake DSLR technology slip away.

Well, that's the news, sorry it isn't better!

Best Regards,

Bill Mattocks

Konica Minolta sees big loss, steps up restructuring
Fri Nov 4, 2005 4:17 PM IST

By Nathan Layne

TOKYO (Reuters) - Japan's Konica Minolta Holdings Inc. said on Friday it swung to a first-half net loss and now expects to post a huge loss for the full year on hefty costs to downsize its struggling photographic film and camera operations.

The world's third-largest maker of camera film after Eastman Kodak and Fuji Photo Film Co. said it would book 90 billion yen ($768 million) in restructuring costs in the year to March as it shuts factories, writes down assets and cuts jobs.

Konica Minolta President Fumio Iwai said the move would help speed up a shift of resources to more promising areas such as colour office copiers and liquid crystal display materials, and away from the deteriorating market for analogue film.

The restructuring charges are nearly three times larger than a plan unveiled earlier this year that called for a 34 billion yen special loss over four years through March 2009. It now wants to deal with all of its problems in the current business year.

"Looking at the worsening market conditions, we decided to deal with things more quickly," Iwai told a news conference. "We are going to shrink operations targeting the consumer market and accelerate our transformation to a business-to-business firm."

The company, created in August 2003 through the merger of Konica Corp. and Minolta Co., said it now expected to post a group net loss of 47 billion yen in 2005/06, down from its previous forecast for a profit of 23 billion yen.

Giving a breakdown of the special loss, the company said it would spend 27 billion yen for consolidating factories and writing down the value of equipment, and the remaining 63 billion yen on rationalising its sales network and cutting workers.

Iwai said the company would look to slash about 4,000 jobs, or roughly 12 percent of its group work force of 33,000, although he did not give an exact time frame for the move. "Let's just say we are not talking about it taking three or four years."

It will downsize its digital camera operations, including single lens reflex (SLR) models, which have sold well recently. There is no change, however, to Konica Minolta's plans to jointly develop digital SLR cameras with Sony Corp., Iwai said.

COPIERS STRONG

Stripping out special losses and restructuring charges, Konica Minolta reported healthy results due to strong sales of multi-function office copiers, triacetyl cellulose (TAC) film used in LCD panels, and medical equipment.

The world's No.4 copier maker after Canon Inc., Xerox and Ricoh Co. said group operating profit was 39.41 billion yen ($336 million) in the April-September first half, up from 32.5 billion yen in the same period last year.

The result beat the market consensus for 36.3 billion yen, according to a poll of six analysts by Reuters Estimates. Konica Minolta itself had forecast a profit of 34 billion yen.

Operating profit in its core office equipment division rose 5 percent to 28.1 billion yen as strong sales of colour copiers offset sluggish laser printer sales amid intense competition with Hewlett-Packard Co. and Dell Inc.

Even its photo imaging division, which handles film and cameras, showed an improvement. The division's operating loss narrowed in the first half to 720 million yen from 4.0 billion yen a year earlier, due to cost cuts.

But a special loss of 28.7 billion yen, mainly for restructuring and the writing down of assets in its photo imaging division, pushed it to a first-half net loss of 3.5 billion yen, compared with a net profit of 8.2 billion yen the year before.

Konica Minolta also lowered its full-year operating profit forecast by 15 billion yen to 75 billion yen, reflecting a bearish outlook for its laser printer business and expectations of sluggish sales of compact digital cameras and photo film.

In light of the net loss, Konica Minolta said it would not pay a dividend for the first or second half. It had previously estimated paying 10 yen per share for the full year.

Prior to the announcement, shares in Konica Minolta closed up 2.6 percent at 1,010 yen, in line with Japan's electrical machinery index.

(Additional reporting by Kiyoshi Takenaka)

 

[GeneW]

More bad news ... I hope nobody shoots the messenger this time.

Gene

 

[bmattock]

Here's another story, more drastic in nature:

http://www.forbes.com/markets/feeds/afx/2005/11/04/afx2318453.html

Forbes is basically saying that KM was planning a 'soft landing' for their film-based business, but has abandoned that model and is now dropping their entire photography-related business like a hot rock. Cuts 3000+ employees as of now, and cuts director's pay by 20%. However, their CEO says they have no plans to completely exit the market for photographic products. Hmmm. Not sure what that means.

Best Regards,

Bill Mattocks

 

[bmattock]

More bad news ... I hope nobody shoots the messenger this time.

Gene

Gene, if you mean me, I'm ok with it. I understand the anger that people are feeling as the (film) rug is jerked out from under us. We're on a "Swiftly Tilting Planet" and the world is turned on it's ear all of a sudden. We were all kind of slowly adapting to the digital world, taking small steps, enjoying the new technology and trying to see how it would fit into our film-based world, and all of a sudden, WHAM! It's like 'game over, man'.

And I think everyone understands now that I'm no fervent drum-beater for the death of film - I still like it too much. I just can't pretend this is NOT happening, and I figure others want to know too, even if the news is bad.

Best Regards,

Bill Mattocks

 

[dcsang]

KM already chucked their Canadian distributorship (for camera gear at least).
Overheard at the local camera shop:

The only film scanners we carry now are Nikon since Konica Minolta decided to pack up and leave town. We can't get any in if we tried.

It doesn't surprise me that they'll continue to restructure. I believe they were the last ones to put their feet into the digital SLR pool.. and you know what they say about the last ones into the pool.. dirty rotten eggs.

Dave

 

[bmattock]

KM already chucked their Canadian distributorship (for camera gear at least).
Overheard at the local camera shop:
It doesn't surprise me that they'll continue to restructure. I believe they were the last ones to put their feet into the digital SLR pool.. and you know what they say about the last ones into the pool.. dirty rotten eggs.

Dave

Well, I hope they manage to keep their DSLR's going. I think that Canon / Nikon need to have competition - it is healthy for everyone - at the mid to high DSLR level. And I think KM's idea about putting the anti-shake in the camera body is a LOT smarter than putting it in the lenses individually, where you have to rebuy the technology with each new lens.

I would LOVE to have a KM DSLR with a M42->Maxxum adapter and a Pentax SMC 50mm f1.4 shooting at 1/15 or even 1/8, and no shake! Eh? That would be great!

And of course, I am happy with my KM SD IV, but I'd love to be able to get the 5400 II at some point in the future. I guess that will leave Nikon as the only game in town for dedicated film scanners (other than the lower-end brands, of course).

Well, here's hoping...

Best Regards,

Bill Mattocks

 

[zuikologist]

I have to agree on the anti-shake technology - it seems to be an excellent idea.

Interestingly, the DSLR market is the only digital segment forecast to grow significantly in the next year, which is probably why KM are staying in there. I suspect this is related more film SLR users moving to digital technology rather than P&S users upgrading, which should also mean a limited growth curve for this segment also and a further shake out of the industry a few years from now. It would seem the Pentax/Samsung link-up may be a sign of things to come.

 

[GeneW]

I suspect this is related more film SLR users moving to digital technology rather than P&S users upgrading, which should also mean a limited growth curve for this segment also and a further shake out of the industry a few years from now. It would seem the Pentax/Samsung link-up may be a sign of things to come.

I agree that film SLR users will likely prefer DSLR's, but if you look at the forums on some of the digital sites (e.g. dpreview), a lot of folks who have entered photography via digital P&S are upgrading to DSLR. The more serious ones, of course, but there seems to be a lot of them.

Aside: I find it healthy for photography in general that so many new photographers have been born due to digital. Some of them will graduate to RF's 😀

Gene

 

[zuikologist]

Gene

I agree up to a point. I think many/most P&S users wishing to upgrade may go for a bridge camera, which does most of what they want for less $. Setting aside the issue of sensor noise, something like the Canon IS2 with anti-shake technology is arguably a more useful low light tool than a DSLR, has a huge zoom, is half the size of a DSLR and operates almost silently. Just my opinion etc, etc

 

[Palaeoboy]

Oh Damn there goes my dream of a CLE2 totally down the drain, I hate when dreams are shatterred!

 

[ch1]

Years ago my brother worked for Konica in the medical imaging business. They were an also-ran to various competitors, inlcluding his current employer, Phillips.

Konica was always a market-share trailer in each of its businesses and the merger with Minolta was a marriage of two weakling, also-ran, companies.

Yes, it's sad to see them exit film-based cameras (although, truth be told, I never had nor wanted one) and sorry to see them propbably exiting film production (although the only rolls of their I ever had were "freebies" thrown in when I got film developed at a kiosk), but it is all part of the inevitable shrinkage of the film industry.

Film is evolving from a mass to niche market. It is being "double whammied" by a secular downward trend that is being exacerbated by the "fad rage" of digital cameras (including those cell-phone ones) as a mass consumer "gotta have" item.

I believe that film usage will eventually flatten out. But I do not believe it will disappear altogehter (or at least not during my "ever" as Joe would say).

Regards,
George

 

[Alec]

Maybe this is just an organized hoax meant to con existing Minolta AF SLR users into panic-buying a 7D / 5D lest there are no more available?

I won't take it. I won't buy one. I will resist. For a while anyway.

 

[GeneW]

Gene

I agree up to a point. I think many/most P&S users wishing to upgrade may go for a bridge camera, which does most of what they want for less $. Setting aside the issue of sensor noise, something like the Canon IS2 with anti-shake technology is arguably a more useful low light tool than a DSLR, has a huge zoom, is half the size of a DSLR and operates almost silently. Just my opinion etc, etc

Good point! It'll be interesting to watch this segment of the digital camera market.

Gene

 

[djon]

wtr our various attitudes and emotions: It's a sure thing we'll mostly be shooting digital in a year or two and it's highly unlikely that means digital rangefinder. IMO. Why? Because film will be too expensive and too hard to get processed (like Kodachrome). And hardly anybody except "us" is into rangefinders, and "we" will certainly abandon rangefinders for tempting autofocus digicams or dslrs.

Konica's not nearly as important as Sony or Kodak in this game...both sport Zeiss optics, meaning they come with better lenses than the kits with anybody else's dslrs...and they cost less than $1000. What's the drawback? Our belief that somehow it's desirable to have interchangable lenses and our totally mistaken belief that whatever we buy will be of use after 5 years.

The imaging performance of Sony's 10MP APS (being introduced this month) will certainly beat D70 and 20D and it'll cost less than half the new Nikon 200...so what's the argument? Viewfinder? Supposedly...but many of us have adapted nicely to Leica IIIC and external viewfinders, so maybe we can adapt to Sony's Rollei/Hass-like waist level potential...



In the end, are we image makers, or are we archaic gizmo lovers?

Me, I'm both. But mostly image maker.

 

[zuikologist]

Gizmo lovers unite!

Seriously, I think digital and film will coexist whilst there is a sufficiently large, mature, niche market that someone (not Konica or maybe even Kodak) will service. However, the speed of the demise of film market is impressive.

It may end up being a market for Ilford and a few Eastern manufacturers. It is certainly not a market that will attract much external competition through innovation or new products, which bodes well for any remaining manufacturers - as long as their existing manufacturing plants can produce film at economic profit and there is sufficient demand, there is no reason to stop producing.

Can we draw comparisons with the vinyl record market, since there is still a hardcore of vinyl users? Perhaps not, since they rely on the hardware (turntables, which are relatively high value but low technology) being available to play the software (records, which are kept and not consumed). It seems to be vice versa for film - we need the software (film, low value commodity which is consumed) to use the hardware (cameras).

 

[Solinar]

Kodak's use Schneider Kreusnach labels on their camera lenes.

Speaking for myself, I really need to see a Nikon, plus a Pentax, KM, or an Olympus come out with a near $2500 full frame CCD sensor camera before I jump back into SLR's. Until then I shoot one or two rolls a week and develop them myself. Color is a rare twice maybe thrice a year treat.

The APS sized sensor DSLR's are a nice bridge, but to buy glass specifically designed for a smaller frame size and then have camera makers later push full sized sensors as the next best thing seems intended to keep everyone buying into the digital revolving door .

Speaking of KM, I hope they hang in their with their DSLR's. Their anti-shake technolgy built in to the camera body itself is head and shoulders more practical than building each lens with IS or VR control.

 

[taffer]

Well, anyway the only film based Minoltas that interested me were the SRTs 😛

Somewhat sad to hear, but that's how it is and as we say here, lo tomas o lo dejas. I still think thought that in some years we'll see how a 'new' technology is born to make semi-transparent prints of digital files in a non electronic dependant medium that can still hold all the pixel information and be easily seen at naked eye, and easy to project and scan 🙂

In fact, IIRC, some labs here were already offering that option a while ago.

It makes no point to turn your head against the wall and try to ignore what is around you.

Now, anybody wants to sell a RD-1 for $1000 ? 😀

Oscar

 

[djon]

Yes, Kodak does use Schneider, not Zeiss.

As some of us recall, Kodak used to make the optics under their own Ektar label for Hassleblad (1000F)...if they went into lens-making again, using Ektar and Commercial Ektar labels and meeting their historic standard of optical excellence, they could readily recapture the lensmaking lead Vs the Japanese and Germans, just as they already have with digicams (their biggest rival in digicams is Sony, not Canon/Nikon et al).

Also, I think the new dslrs with fixed lenses will meet most advanced amateur and some professional needs much better than will SLRs. We're moving deeper into an era when the camera, like the computer, is literally abandoned every couple of years by the most serious users. D70 and 20D are already yesterday's news and neither one will rival Sony's 10MP/APS/Zeiss in most important respects. If somebody HAS to have fast shootng and interchangable lenses, Sony will be happy to cede them to Nikon or Canon.

 

[Little Prince]

Uh? I hope this does not mean improvements in the KM DSLR line stop happening. Like more 'digital' lenses and so on. I recently recommended a KM 5D to my brother as a first DSLR, and he bought it. If he finds out about all this, he's going to be annoyed with me.

 

[Frank Granovski]

Just as I feared. I better stock up big time on their film. I'd better be heading over to London Drugs this weekend. :bang: