Decline in Camera Profits Urges Nikon to Shift Focus to DSLRs

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May 17, 2005 — This week Nikon announced a net $226 million jump in profit for the recently concluded fiscal year. The boost comes from the sales of "steppers", the equipment used to make integrated circuits, and not in its imaging division.

Fortunately, for Nikon the increased sales in circuit printing equipment offsets a reported drop in profits from Nikon’s imaging division, home to its digital camera line when compared to the previous year. The drop was due in part to sharp declines in prices market-wide, with Nikon cutting digital camera prices by 20 percent as of March.

Kenji Enya, Nikon’s Chief Financial Officer said at a news conference this week the company will reduce its risks in compact digital cameras at the same time the company refocuses on high end digital SLR’s.

Nikon is expected to increase sales of its DSLR’s by a half million cameras by spring of 2006. It is that strong market identification with DSLR’s that Nikon is hoping to exploit and lead to a boost in imaging division profits for next year.

As of March of this year, Nikon still managed to sell more cameras than they did through March of 2004. At the end of the most recent fiscal year Nikon sold 6.6 million digital cameras, up 1.2 million cameras from 2004.

Nikon expects world-wide sales of digital cameras to increase by roughly one million units by March of 2006.

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