Olympus plans to reduce production of compact digital cameras in favor of digital SLRs in a bid to boost profitability, reports Reuters. The Tokyo-based company is simply responding to a fast-growing DSLR market which offers higher profit margins. Sales of compact cameras currently account for around 72% (2004), and the company aims to cut this to 40% in five years' time. Olympus hope that DSLRs will make up 30% of its sales in five years, up from 3% last year.

Olympus says: "The recent announcement by Olympus, regarding a future shift in balance of the compact cameras and the DSLR products, highlighted that the current digital compact camera line up accounts for around 72% of the Olympus business. Over the coming years we aim to change this balance simply by increasing the DSLR products at a higher rate of growth than we are planning for our compact digital camera sector.

Olympus is planning to stay active and increase the business area of compact cameras; however we foresee an even greater growth in other areas such as DSLR. This is the reason why we expect a shift in the ratio of compact cameras to DSLR products and it does not mean that there are plans to cut production of compact cameras in favor of DSLR. This change will be because of the increased sales of DSLR products and not due to any reduction in production.”

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