----- Original Message -----
From: "K.Takeshita" <[EMAIL PROTECTED]>
To: "Pentax Discuss" <[email protected]>
Sent: Sunday, July 24, 2005 8:39 PM
Subject: Re: Pentax Profits Fall 42%
the danger is that then medium format will be the ONLY camera market they
will be in at the end of 2 years,
Where is the fact on which your opinion is based?
when you run a business, you stay in business only by doing what
consistently makes money and dropping what doesn't. if those 40% of all
Japanese medium format photographers buy as many 645Ds as Pentax hopes, the
camera will make money and be profitable at something resembling what their
film bodies were. whether they do or not, the P&S camera profit margins are
miniscule, a few percent tops because they are commodities now. DSLRs make
more profit, but there is going to be about a year to two year's time before
the entire market is saturated too, just like digital P&S, and then profit
margins are going to disappear as well. that leaves the medium format market
where they can make some money. this assumes that the imaging products
division as a whole is making money. it's not. subtract the imaging products
division and Pentax's revenue and profits would have grown steadily over the
past decade. assuming that the 645D makes money is a dangerous assumption,
and the rest of Pentax's camera business is known to be losing money.
the only way out is to rise above it, literally, by having higher end
products. why do you think the Japanese car manufacturers started all those
premium car lines in the US? the Acura NSX may be viable, and even
profitable, competition to the Italian supercars, but it makes very little
difference to the bottom line for Honda. making lots and lots of Honda
Civics doesn't make a lot of money for Honda compared to what they make from
Accords and other mid-priced vehicles.
also, what makes Pentax think that the 645D will be competitive in the
medium format market when it finally ships?
I don't know but I tend to think Pentax know it and they do not usually do
too stupid or reckless a thing. If anything, they are always conservative
and prudent, whether we like it or not.
being too conservative is why they are having the problems they are having
now.
selling lots of low end
35mm-type bodies where they make very little money means there won't be
much
money around later.
I do not know if they make little money or not. I have no such
information.
Margin might be thinner but the volume is there. So, I tend to think
that's
the reason why Canon is there and this is their largest market. What you
do
not like is the fact that Pentax are serving the entry level market but
not
coming up with the upgrade path. That's true, but it has nothing to do
wioth your speculation that they are making little money in that
particular
segment of the market. If that market is so unprofitable, I tend to think
that Canon would be the first one to get out of it, rather than
concentrating it like now.
Canon has higher end bodies to grow into that have much higher profit
margin. Pentax hasn't. Canon doesn't need to make much money in the low end.
they make it in the middle. Pentax hasn't got a middle, let alone a high end
body. working on the 645D only delays the middle and high end bodies.
I do not think sensible people will judge anything by the snapshot of the
financial status, particularly when it was influenced by a one-time
extraordinary event like the sudden burst of the digicam price. I am sure
the real analysts must be looking at the longer term prospect too,
although
I am not saying that the current situation is good, but obviously Pentax
have weathered this disaster with far less negative impact that anybody
else
but Canon who were also hit hard, mind you. It tells me that they have
been
fairly prudent. Oly was NOT prudent, buries in the sea of dead stock, for
example.
sensible business people are the ones that are saying what i have been
saying here. it's sensible business people that are saying how much longer
can Pentax continue to have an entire division lose money, to continue to
forecast losing money, and not do something drastic. as i have said earlier,
doing something drastic may mean moving to a niche market, sacrificing
market share and revenue for profitability, or exiting the finished camera
market entirely, producing only components for other brands.
it's not a one time event. it's close to four years now. all but two of the
major Japanese traditional camera manufacturers lost money last year or
more. Nikon only made money last year after a couple of years of losing.
Canon hasn't had a year in a very long time where its camera division lost
money. it's irrelevant that the Canon, or any other brand's, consumers may
be stupid and don't know good glass or cameras really are. what matters is
that people aren't spending enough money where it counts to Pentax, on
Pentax equipment. being different and offbeat in the way that Pål suggests?
it's been tried and it's not working for anyone, including Canon. if there
were only the big 5 camera manufacturers just like in the film days, Pentax
could stumble along and remain in business making a profit anyway. well,
there aren't, there are more than 5 new players, each with deep pockets, and
each that has managed to find a way to make money at it, all at the expense
of the traditional players.
Herb....
