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Pentax to be boosted by 'rapid roll-out' of DSLRs, Hoya says

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tweedle

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Equity researchers at Mitsubishi UFJ Securities, Tokyo, issued a 11-pages report August 12th on Hoya.

The report is partly based on a briefing with Hoya CEO Suzuki, and it may add a little news to what is actually going on with Pentax imaging division.

A few snips here for your information and discussion. Please note that any view here is from an independent analyst, your view might be different.

Overall, the Pentax group saw sales decline as well, and profit was in the read. The imaging division saw sales falling rapidly with 23 per cent in just one year, the analysts estimate:
Member said:
In 1Q, Pentax posted sales of ¥36.5bn (¥40.8bn the year before)
and an operating loss of ¥0.04bn (¥1.2bn the year before).

... we estimate sales were 1) ¥16.2bn (-23% YoY) for the imaging
systems subsegment (digital cameras, etc.)
Click to expand...
Hoya plans to roll out new DSLRs 'rapidly' to lift the camera division from further crumbling - a K1 and a K1000 coming up this Photokina or next PMA?:
Member said:
Digital camera prices have continued to fall. Hoya has seen a fall in
unit price and profitability, although it believes this is partly due to
a lack of appeal of some of its digital cameras. The company hopes to
boost profitability by rapidly rolling out well-appointed cameras that
are uniquely Pentax, but it expects 2Q earnings to be similar to 1Q
earnings.
Click to expand...
Hoya's optical lenses business (originally non-Pentax) saw a sharp sales decline. The company now plans to develop and sell more SLR lenses in the future as one mean amongst others to compensate for this. How will they do that, we might all speculate ... could it be lenses for Samsungs new EVIL? Third party lenses for other camera brands? Limited lenses in non-PK mount?
Member said:
1Q sales fell 18.0% YoY [...] a second straight quarter of
double-digit decline. Based on CIPA data, digital camera production
has been growing 16-19% YoY in real terms. However, Hoya’s
market share has declined as 1) Chinese manufacturers continued
their offensive into the digital camera lens market and 2) digital
camera makers increased in-house lens production. In addition, sales
of camera phone lenses - a business from which the company has
decided to withdraw – decreased as prices continued to fall.

Given these conditions, Hoya plans to get its optics business back
on track from 2Q by 1) entering the market for pickup lenses used
in Blu-ray disk devices, 2) working to match Chinese manufacturers
on price, 3) increasing SLR lens market share, and 4) participating
in camera design.
Click to expand...
Some good news for Hoya overall:
Member said:
Based on Hoya’s briefing, factors that should drive 2H improvement
include:
  • contributions from entry into the market for Blu-ray pick-up lenses
and efforts to increase SLR lens market share
Click to expand...
Some bad news:
Member said:
On the other hand, concerns include:
  • Increased downward pressure on optical lens prices from slowing
digital camera growth
  • Increased competition over developing next-generation products,
increased costs, and lower profitability from a decline in prices for
existing products
Click to expand...
Bottom line is rather pessimistic for the time being, according to the report:
Member said:
... we are not optimistic about earnings in 2H and beyond.
... we do not expect sharp profit growth over the next one
to two years.
... we think it will take some time for Pentax’s profitability to improve.
Click to expand...
(Snips only. For the full report, you will have to subscribe)
 
(Nice to hear that the brand is still viable, and that the Hoya BOD have decided to stick with it, for now. The overall (all brands) camera business is healthy relative to many other sectors of the worldwide economy, and buyers in the Far East in particular seem intrigued by expensive tech. How much value the Pentax brand retains is the question; and sneaking something out at Photokina amidst a TON of already released news would be "stealth marketing", to the extreme. I appreciate the link)

====================
tweedle said:
tweedle said:
In 1Q, Pentax posted sales of ¥36.5bn (¥40.8bn the year before)
and an operating loss of ¥0.04bn (¥1.2bn the year before).

... we estimate sales were 1) ¥16.2bn (-23% YoY) for the imaging
systems subsegment (digital cameras, etc.)
Click to expand...
Click to expand...
(This decline is in the face of their newest models, which were each delayed in release for one reason or another, including a shortage of lenses. I see nothing here to build on, except the old legacy loyalty factor, and the potential for someone actually spending money on their more expensive lenses, which no doubt they've sunk money into building. On Amazon' best sellers, what's out now are perpetual laggards. I wonder how much revenue comes from Optio, and how much from the two DSLR's?)

=============================
tweedle said:
Hoya plans to roll out new DSLRs 'rapidly' to lift the camera
division from further crumbling - a K1 and a K1000 coming up this
Photokina or next PMA?:
tweedle said:
Digital camera prices have continued to fall. Hoya has seen a fall in
unit price and profitability, although it believes this is partly due to
a lack of appeal of some of its digital cameras. The company hopes to
boost profitability by rapidly rolling out well-appointed cameras that
are uniquely Pentax, but it expects 2Q earnings to be similar to 1Q
earnings.
Click to expand...
Click to expand...
(This is a strategy that should have been employed a year ago. Perhaps the management tussle back then, where the old Pentax BOD was canned, was a problem here. Perhaps the shortage of lenses. Perhaps Hoya just wanted to get the merger over and done with, and banked on the K20D's specs. I have no idea what "uniquely Pentax" means, at this point. There's a lot of Samsung content, and the PK mount. It seems to indicate that Samsung still wants to participate; although their "micro" announcement did not even mention a PK adapter, which I thought was a foregone conclusion for that model)

http://www.amateurphotographer.co.uk/news/New_interchangeable_lens_system_compact_digital_camera_system_on_the_way_news_266661.html

Look at this phrase:

"The 'Hybrid' system will run alongside the current GX DSLR series."

(How about a NEW series of GX?)
 
philbarton said:
I have no idea what "uniquely Pentax" means, at this point.
Click to expand...
Personally I am also curious to find out what this would really mean.

One guess could be more special features in the 'slow photgrahy' trend to please the nerds and geeks that are really engaged in photography but do not have the cash to pay for a truly professional system?

Other guesses?
 
tweedle said:
tweedle said:
1Q sales fell 18.0% YoY [...] a second straight quarter of
double-digit decline. Based on CIPA data, digital camera production
has been growing 16-19% YoY in real terms. However, Hoya’s
market share has declined as 1) Chinese manufacturers continued
their offensive into the digital camera lens market and 2) digital
camera makers increased in-house lens production. In addition, sales
of camera phone lenses - a business from which the company has
decided to withdraw – decreased as prices continued to fall.

Given these conditions, Hoya plans to get its optics business back
on track from 2Q by 1) entering the market for pickup lenses used
in Blu-ray disk devices, 2) working to match Chinese manufacturers
on price, 3) increasing SLR lens market share, and 4) participating
in camera design.
Click to expand...
Click to expand...
============

The four points have to do with their overall optics business, including Blu-Ray devices, which has nothing to do with the Pentax brand, as I know it. Matching the Chinese on price will take some work, but China is not quite the lowest-cost production area anymore. The key is which plants in low-cost countries Hoya retains - they are closing one in Shanghai that made Pentax gear.

http://www.hoya.co.jp/english/news/latest/20080901.pdf

Increasing SLR lens share indicates a move towards what Tamron and Sigma are doing. If Pentax becomes more of a design house, and is less involved in production, point #4 makes sense.

There's a sad post on Flickr from a former dealer, apparently - Pentax already said they're re-arranging channels; so who will retail the Pentax line?

http://www.flickr.com/groups/k20d/discuss/72157606888950903/

"From a dealers point of view Hoyas byout (sic) has ruined Pentax, My store was the largest Pentax dealer within 200 Miles in any direction. When Hoya took over they fired or forced into retirement all there sales reps, Now all Pentax dealers that do not order more then a vary large amount a year in product must buy from 3rd party wholesellers. NO small camera shop can do that. So once our pentax products are gone that is it for us, No more Pentax other then special orders.

It is a shame, Pentax finally started coming out with DSLR's that were able to compete with the Big two."
 
philbarton said:
====================
tweedle said:
philbarton said:
In 1Q, Pentax posted sales of ¥36.5bn (¥40.8bn the year before)
and an operating loss of ¥0.04bn (¥1.2bn the year before).

... we estimate sales were 1) ¥16.2bn (-23% YoY) for the imaging
systems subsegment (digital cameras, etc.)
Click to expand...
Click to expand...
(This decline is in the face of their newest models, which were each
delayed in release for one reason or another, including a shortage of
lenses. I see nothing here to build on, except the old legacy
loyalty factor, and the potential for someone actually spending money
on their more expensive lenses, which no doubt they've sunk money
into building. On Amazon' best sellers, what's out now are perpetual
laggards. I wonder how much revenue comes from Optio, and how much
from the two DSLR's?)

=============================
philbarton said:
Hoya plans to roll out new DSLRs 'rapidly' to lift the camera
division from further crumbling - a K1 and a K1000 coming up this
Photokina or next PMA?:
philbarton said:
Digital camera prices have continued to fall. Hoya has seen a fall in
unit price and profitability, although it believes this is partly due to
a lack of appeal of some of its digital cameras. The company hopes to
boost profitability by rapidly rolling out well-appointed cameras that
are uniquely Pentax, but it expects 2Q earnings to be similar to 1Q
earnings.
Click to expand...
Click to expand...
(This is a strategy that should have been employed a year ago.
Perhaps the management tussle back then, where the old Pentax BOD was
canned, was a problem here. Perhaps the shortage of lenses. Perhaps
Hoya just wanted to get the merger over and done with, and banked on
the K20D's specs. I have no idea what "uniquely Pentax" means, at
this point. There's a lot of Samsung content, and the PK mount. It
seems to indicate that Samsung still wants to participate; although
their "micro" announcement did not even mention a PK adapter, which I
thought was a foregone conclusion for that model)

http://www.amateurphotographer.co.uk/news/New_interchangeable_lens_system_compact_digital_camera_system_on_the_way_news_266661.html

Look at this phrase:

"The 'Hybrid' system will run alongside the current GX DSLR series."

(How about a NEW series of GX?)
Click to expand...
Speculation will run wild about all of this.

Pentax may have been the ones to originate the hybrid. They had a couple of mock ups a few years ago. Maybe it is an entirely Samsung thing. I really would like to see a PK adapter if it were possible.

I have doubts that Samsung would change mounts for the GX. It is possible but I do not believe it would be a good thing. The PK coalition could be a very good thing, especially if Pentax can rebuild its name in lenses. They rock and need to let the consumers know. I would not mind a Samsung body but it will have Pentax glass.

"Uniquely Pentax" is another phrase that will have a lot read into. It could simply mean they want to be different from N & C or they may want to do less with Samsung.

I believe there is a synthesis with Pentax and Samsung. Both have been innovators and unique. I hope they continue to work together.
 
tweedle said:
philbarton said:
I have no idea what "uniquely Pentax" means, at this point.
Click to expand...
Personally I am also curious to find out what this would really mean.

One guess could be more special features in the 'slow photgraphy'
trend to please the nerds and geeks that are really engaged in
photography but do not have the cash to pay for a truly professional
system?

Other guesses?
Click to expand...
===============

Perhaps there was something already funded in engineering, and they got it to production. There are still numerous aches and pains with regard to AF and exposure, and a totally new AF system would be welcome (as it would have been for the past several years). The problem Hoya has is committing funds to NEW products, in terms of camera bodies. Whatever appears will have been in development, probably dating back to the former Pentax organization.

The problem is that when you see the micro 4/3rds appear, and movie mode both in that camera (future models) as well as the Nikon, you can also see the need for an ongoing investment - which I think would require spending on a scale that Hoya won't commit to.

"Optics" are one thing, and camera bodies another. I'd guess there's no reason not to let Samsung produce the bodies, and rebrand as Pentax. After all, it's their sensor. Running factories for camera bodies requires investment and overhead; and that requires sales volume to amortize it.

Perhaps they'll do a cheaper body, to try to lure the 6.3 MP base.
 
K1000Photographer said:
Pentax may have been the ones to originate the hybrid. They had a
couple of mock ups a few years ago. Maybe it is an entirely Samsung
thing. I really would like to see a PK adapter if it were possible.

I have doubts that Samsung would change mounts for the GX. It is
possible but I do not believe it would be a good thing. The PK
coalition could be a very good thing, especially if Pentax can
rebuild its name in lenses. They rock and need to let the consumers
know. I would not mind a Samsung body but it will have Pentax glass.

"Uniquely Pentax" is another phrase that will have a lot read into.
It could simply mean they want to be different from N & C or they may
want to do less with Samsung.

I believe there is a synthesis with Pentax and Samsung. Both have
been innovators and unique. I hope they continue to work together.
Click to expand...
========

I don't think that Pentax, as a DSLR brand, is viable at all without Samsung, and their bench depth in electronics and engineering. I wish I could lay hands on it, but in an article about 2 years ago, covering many brands, Samsung openly said that they were not bound to Pentax, or to a PK allegiance. That may just have referred to their unique cameras, including their 2010 "micro/hybrid" offerings and lenses. Until Panasonic actually registers sales of what they've announced, the whole discussion may be premature. Everyone's talking about the G1, rightfully, as a technological achievement. But I don't believe that the camera and lenses, combined, will be cheap - and it requires some allegiance to the 4/3 format, a considerably smaller sensor in area than the APS-C "range" which Samsung will use. Whatever the issues with the K20D, aside from the "hot pixels" issue, the 14 MP sensor appears to work fine.

Samsung won't change the mount on the GX, but note precisely what they said:

"Lee admitted that competing with Nikon and Canon in the DSLR market is extremely challenging, and mentioned that all other manufacturers are finding it difficult to make an impression. 'Samsung is still in the early stages of its DSLR project and in this field we have a long way to go to gain a good market share. With the hybrid system we will create a new camera segment which we will be able to dominate.' Although many details are still to be decided on Lee predicts that the new system will be ready for sale in the spring of 2010."

That's not a ringing PK endorsement, or an endorsement of the current APS-C form factor. The market seems to be moving either "big" to FF or "small" to something like the G1; plus cheap DSLR's; plus high-end APS-C's like the D300, which seems immovable from the DPREVIEW top-clicks list.
 
MrRoger said:
tweedle said:
Equity researchers at Mitsubishi UFJ Securities, Tokyo, issued a
11-pages report August 12th on Hoya.
Click to expand...
snip....
MrRoger said:
A few snips here for your information and discussion. Please note
that any view here is from an independent analyst, your view might be
different.
Click to expand...
Misubishi securities? Don't they own Nikon ;-)
Click to expand...
=============

Not quite. Mitsubishi is a keiretsu, with Mitsubishi Securities one of many sub-companies. Nikon is owned by Mitsubishi GROUP, the parent.

http://en.wikipedia.org/wiki/Nikon

Nikon Corporation is a multinational corporation headquartered in Tokyo, Japan specializing in optics and imaging. Its products include cameras, binoculars, microscopes, measurement instruments, and the steppers used in the photolithography steps of semiconductor fabrication. It was founded in 1917 as Nippon Kōgaku Kōgyō; the company was renamed Nikon Corporation, after its cameras, in 1988. Nikon is one of the major companies of the Mitsubishi Group.
 
tweedle said:
tweedle said:
Based on Hoya’s briefing, factors that should drive 2H improvement
include:
  • contributions from entry into the market for Blu-ray pick-up lenses
and efforts to increase SLR lens market share>
Click to expand...
Some bad news:
tweedle said:
On the other hand, concerns include:
  • Increased downward pressure on optical lens prices from slowing
digital camera growth
  • Increased competition over developing next-generation products,
increased costs, and lower profitability from a decline in prices for
existing products
Click to expand...
Bottom line is rather pessimistic for the time being, according to
the report:
tweedle said:
... we are not optimistic about earnings in 2H and beyond.
... we do not expect sharp profit growth over the next one
to two years.
... we think it will take some time for Pentax’s profitability to improve.
Click to expand...
Click to expand...
=============

That's a lot of bad news in the short term, in the face of a likely recession in Japan, and a worldwide slowdown in business, exacerbated by the news at Lehman, Merrill and AIG sowing uncertainty in worldwide markets.

I have one particular client keeping me very busy, and I spoke to them this morning - they're in the industrial sector, and their business happens to be doing very well (whew!).

Hoya certainly has the financial resources to wait it out - but I doubt that the shareholders enjoy the camera divisions' results. Sparx was a driving force in what happened to Pentax, and I don't know the institutional share ownership of Hoya; but from this, it's not substantial as compared to the total float.

http://www.adr.com/adr?page=comphome&formtype=2&site=ADR&ticker=HOCPY
 
Two Truths said:
It sounds very similar to Konica Minolta's position in 2004-2005,
before they decided to quit the digital photography market.
Click to expand...
What kind of similarity is that, Stu?

Having the skills to develop and manufacture neat new models but finding themselves in a situation where 1) every model is somehow appearing too late in the competition and 2) the sales & marketing organisation is somehow lacking the muscles needed to push the products?

That kind of dilemma?
 
tweedle said:
What kind of similarity is that, Stu?

Having the skills to develop and manufacture neat new models but
finding themselves in a situation where 1) every model is somehow
appearing too late in the competition and 2) the sales & marketing
organisation is somehow lacking the muscles needed to push the
products?

That kind of dilemma?
Click to expand...
http://en.wikipedia.org/wiki/Konica_Minolta

Minolta made some early forays into digital SLRs with the RD-175 in 1995 and the RD-3000 in 1999 but were the last of the large "Big Four" camera manufacturers to launch a successful digital SLR camera using a current 35mm AF mount in late 2004. It wasn't until late 2004 (after the merger with Konica) that they launched the Dynax/Maxxum/α 7. However, by 2004 Canon and Nikon had a whole range of digital SLR cameras and many serious photographers had already switched, thus leading Konica Minolta to withdraw from the market and transfer assets to Sony.
 
philbarton said:
K1000Photographer said:
Pentax may have been the ones to originate the hybrid. They had a
couple of mock ups a few years ago. Maybe it is an entirely Samsung
thing. I really would like to see a PK adapter if it were possible.

I have doubts that Samsung would change mounts for the GX. It is
possible but I do not believe it would be a good thing. The PK
coalition could be a very good thing, especially if Pentax can
rebuild its name in lenses. They rock and need to let the consumers
know. I would not mind a Samsung body but it will have Pentax glass.

"Uniquely Pentax" is another phrase that will have a lot read into.
It could simply mean they want to be different from N & C or they may
want to do less with Samsung.

I believe there is a synthesis with Pentax and Samsung. Both have
been innovators and unique. I hope they continue to work together.
Click to expand...
========

I don't think that Pentax, as a DSLR brand, is viable at all without
Samsung, and their bench depth in electronics and engineering. I
wish I could lay hands on it, but in an article about 2 years ago,
covering many brands, Samsung openly said that they were not bound to
Pentax, or to a PK allegiance. That may just have referred to their
unique cameras, including their 2010 "micro/hybrid" offerings and
lenses. Until Panasonic actually registers sales of what they've
announced, the whole discussion may be premature. Everyone's talking
about the G1, rightfully, as a technological achievement. But I
don't believe that the camera and lenses, combined, will be cheap -
and it requires some allegiance to the 4/3 format, a considerably
smaller sensor in area than the APS-C "range" which Samsung will use.
Whatever the issues with the K20D, aside from the "hot pixels" issue,
the 14 MP sensor appears to work fine.

Samsung won't change the mount on the GX, but note precisely what
they said:

"Lee admitted that competing with Nikon and Canon in the DSLR market
is extremely challenging, and mentioned that all other manufacturers
are finding it difficult to make an impression. 'Samsung is still in
the early stages of its DSLR project and in this field we have a long
way to go to gain a good market share. With the hybrid system we will
create a new camera segment which we will be able to dominate.'
Although many details are still to be decided on Lee predicts that
the new system will be ready for sale in the spring of 2010."

That's not a ringing PK endorsement, or an endorsement of the current
APS-C form factor. The market seems to be moving either "big" to FF
or "small" to something like the G1; plus cheap DSLR's; plus high-end
APS-C's like the D300, which seems immovable from the DPREVIEW
top-clicks list.
Click to expand...
I do not know if S and P will part ways. I do know that neither would be much in the DSLR market without the other. They have produced some good product but I do not know how well they play together.

It appears to be a wait and see situation. I would like to see what is coming down the pipeline. I know there are new bodies from P and S is working on the smaller system.

I do not know if I am typical but I am in a sort of limbo on what to get next. I do like the K20D/GX20S but want something smaller. Is FF coming down the road? Will there be a small but highly capable PK body (MExD)? What is the hybrid and how will it compare to the bigger DSLR's? I do wish they would announce some form of long term cooperation instead of trying to look tough. At least then, the consumers would have a bit more confidence in the 2.
 
K1000Photographer said:
I do wish they would announce some form of long term
cooperation instead of trying to look tough. At least then, the
consumers would have a bit more confidence in the 2.
Click to expand...
Your wish is very understandable.

I am not so sure, however, that Pentax and Samsung have any really firm look on how the cooperation may develop 'long term' (over more than three-five years).

Olympus tried to form a strong coalition of partners behind the 4/3 only a few years back. Nonetheless, Kodak soon left. Sigma never really entered. Panasonic seems to have left the original DSL format now to go for the m4/3 instead.

One condition for being in the camera business these days is being able to respond quicly and flexibly to market demands and technology developments. Long term commitments may have hard time under such circumstances. Whether you are trying to look tough or not :)
 
The whole kiretsu thing is overstated.

"Mitsubishi" does not own Nikon. Nikon is owned by its shareholders, which as is common with largish companies, is dominated by institutional investors.

-gt
 
When Konica took over Minolta both companies had dark clouds on their horizon...

In this case, Hoya is better off. Still, world economics might lead to a point where Hoya could find their multitude of businesses in dire straight and need rescuing... but I'm holding off on doomsday scenarios for now.

-gt
 
greentoe said:
When Konica took over Minolta both companies had dark clouds on their
horizon...
Click to expand...
Not really. Konica never needed any rescuing and is doing pretty well still.
greentoe said:
In this case, Hoya is better off. Still, world economics might lead
to a point where Hoya could find their multitude of businesses in
dire straight and need rescuing... but I'm holding off on doomsday
scenarios for now.
Click to expand...
No signs of Hoya needing any rescuing.

Pentax imaging division is quite another matter...
 
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