Q: Please explain about the current conditions of Pentax-related business and your prospect of the profit recovery program for the next fiscal year. The decline in profit margin of the actual performance was not as significant as I had expected, despite the negative impact of the strong yen, though I personally predicted that the deficit would have accumulated further. What is the background of Pentax’s total deficit of 1.4 billion yen while there was a deficit of 3.5 billion yen in the camera segment? What are your prospects for profit and loss in endoscopes, digital cameras, and opto-devices for the next fiscal year? If we set the goal of posting a deficit of approximately 10 billion yen for this fiscal year, by what extent are you planning to reduce the deficit for the next fiscal year?
A: (COO Hamada) We are now in the process of formulating the figures for the
next fiscal year. For the camera business in Pentax (including parts), we have closed some bases in Japan, which will be transferred overseas. We have also accelerated the disposal of product inventories, the production of which was launched two years ago, with the aim of achieving a recovery with a rising intonation in the next fiscal year. I think we must take the plunge and trim off the fat. I predict that the scale and marketing share will decline compared to a few years ago when Pentax had momentum. With the impact of the strong yen in mind, we should focus on profitable countries and regions. The selection and integration of regions and products, including personnel and bases, will also be promoted in a straightforward manner.
If they're smart, they're going to continue avoiding Canon and Nikon's markets. Bad news for everyone who wants camera features that Canikon shooters currently enjoy...
Just sounds like 'intergration' to me, there will be some losses associated with the process, usually charged to 'purchase accounting' i.e. the new parent company will fund the changes, layoffs, closing down costs where the intergrationswith the parent have taken place. Just usual stuff, nothing to worry about.
I gave up on Hoya-speek a long time ago. What they say "in translation" never seems to really be what they do.......
Always remember................. Forward-looking statements are based on the judgment of the
company and corporate group obtained based on information obtainable at the time the
statements are made and they also contain risks and uncertainties. The company does
not guarantee the completeness or accuracy of the content.
If they're smart, they're going to continue avoiding Canon and Nikon's markets. Bad news for everyone who wants camera features that Canikon shooters currently enjoy...
Metaphors just don't cross language barriers well. I'm not sure which fat is plunging where.
It seems that they're shedding inventory of cameras from 2007. Are those K200D and some older P&S? Is there K10D inventory left, still trickling out and blocking K20D sales?
If the yen is strong, then moving production to weak-currency countries makes sense. The way things are going in banking, Poland comes to mind(!) but I think he means .... where? Phillipines? The yen is stong compared to which currencies? Japan's economy has not precisely flourished over the last 10-15 years.
Lastly, for Pentax, which are the profitable geographic regions? This may mean regions in which pricing is not so competitive. Are there countries in which manufacturers can mandate minimum pricing? Which are they? Does this approach result more money or just fewer unit sales?
Are there regions to be avoided in which distribution is expensive owing to national regulation of trade, or lack of it?
I'm afraid I'm way over my head here but hoping the many Pentaxians over the planet can help and also hoping that the US is a region that Pentax will aggressively pursue.
1. Pentax still have too many unsold cameras and lenses sitting around because they lost momentum (due to all the uncertainty caused by our protracted takeover negotiations). We'll flog em off cheap to get rid of them before we ship any new models (expect discounts on old stuff but not new stuff).
2. We'll scale back production rates of new models to meet market projections (so we dont end up in the same position).
3. We'll centralise production in 2 facilities in Philippines and Vietnam and shut down everything else in Japan and China except the Head Office and R&D (we'll also move some Hoya production there as well). Everything we dont make in these facilities will be outsourced.
4. We'll stop supplying markets that cannot support the volume to justify the cost of distribution and support given the new currency situation (Guess that wont include the EU, NA, Japan because they account for 99% of the volume and are distibuted centrally, but may include just about everyone else. They have never done that well in China and Samsung own Korea so the other big Far East markets are non available to them, Russia is a small market still with a nosediving currency and South America is far too expensive to export to).
5. We will cut reps, dealers and distributors who sit around on their idle *sses and dont shift stock and in the meantime we will ramp up internet sales.
6. We will shelve development of any technology that has no immediate future (645, FF).
5. We will cut reps, dealers and distributors who sit around on their idle *sses and dont shift stock and in the meantime we will ramp up internet sales.
This is happening in Italy right today. PentaxItaly keeps medical, photography is going to another distributor.
1. Pentax still have too many unsold cameras and lenses sitting around because they lost momentum (due to all the uncertainty caused by our protracted takeover negotiations). We'll flog em off cheap to get rid of them before we ship any new models (expect discounts on old stuff but not new stuff).
Whether this is wise or not highly depends on what new models Pentax had developed over the 13 months after the current gen launch. If they have NOW replacements almost done and competitive on the 2009 market it's not only stupid but IMO tragical not show them. On the other hand if they only have white versions with a different neck strap, why bother?
These new models (or at least the flagship model) will have nothing to do with the current price range. Yes, maybe 10% of people who want a K20D now at 700 USD will give up and wait for a K30D at 1500 USD but in all fairness it's like saying one won't buy a Golf now because he waits for the new BMW 7 series.
2. We'll scale back production rates of new models to meet market projections (so we dont end up in the same position).
Again this would be a mistake IMO because the new models (if they are done right) may sell well better than current ones and intercalation of new and old could actually benefit Pentax by providing a broader range of models for customers to chose. On the other hand whatever is highly competitive now against 450D and D60 may not be so cool against their successors so waiting could be MUCH worse than launching now.
3. We'll centralise production in 2 facilities in Philippines and Vietnam and shut down everything else in Japan and China except the Head Office and R&D (we'll also move some Hoya production there as well). Everything we dont make in these facilities will be outsourced.
Very wise I think!
4. We'll stop supplying markets that cannot support the volume to justify the cost of distribution and support given the new currency situation (Guess that wont include the EU, NA, Japan because they account for 99% of the volume and are distibuted centrally, but may include just about everyone else. They have never done that well in China and Samsung own Korea so the other big Far East markets are non available to them, Russia is a small market still with a nosediving currency and South America is far too expensive to export to).
I don't think any current markets will be abandoned all together but I think many current dealers have big reasons for concern.
5. We will cut reps, dealers and distributors who sit around on their idle *sses and dont shift stock and in the meantime we will ramp up internet sales.
See above and I also think that Pentax will better invest in EU more than in any other area because this is its fair chance to revive in the near future. Countries like France with above 11% market share, the new emerging markets in the EU's East were people have less allegiance to brand name and value more the bang they get for the buck are Pentax's best fields to sow for the future.
6. We will shelve development of any technology that has no immediate future (645, FF).
Again, IMO it highly depends upon what stages this projects are it will be more damaging to shelve a near completed design (perhaps 645D) that could in theory bring prestige and not lose money at all.
Pretty much what I would do in the circumstances
I would also add to this the S(amsung) factor. We don't know their plans and the nature of relation taht they are with Hoya atm. But, let's not forget that Pentax has a 3 model range and Samsung only the GX20 and older models made with Sony sensors and I imagine they are not very happy about that.
1. Pentax still have too many unsold cameras and lenses sitting around because they lost momentum (due to all the uncertainty caused by our protracted takeover negotiations). We'll flog em off cheap to get rid of them before we ship any new models (expect discounts on old stuff but not new stuff).
Whether this is wise or not highly depends on what new models Pentax had developed over the 13 months after the current gen launch. If they have NOW replacements almost done and competitive on the 2009 market it's not only stupid but IMO tragical not show them. On the other hand if they only have white versions with a different neck strap, why bother?
These new models (or at least the flagship model) will have nothing to do with the current price range. Yes, maybe 10% of people who want a K20D now at 700 USD will give up and wait for a K30D at 1500 USD but in all fairness it's like saying one won't buy a Golf now because he waits for the new BMW 7 series.
Basic law of manufacturing - unsold inventory is a direct loss. You only write it off as a last resort - its much better to sell it on otherwise you have to sell a new camera for every old one in stock before you get back into profit and thats suicidal. Much better to sell at a discount and position new models so as not to compete directly.
Pentax are already discounting the K20D and I reckon they are planning a summer or fall shipment for its replacement - lots of time to move stock and indeed they could keep it in the lineup as the K30D is likely to move upmarket (vis D200 and D300 still both listed).
The model that cannot be released until the K20D is sold out is the K300D as it will come it at the outgoing K20D price (like Km and K200D).
2. We'll scale back production rates of new models to meet market projections (so we dont end up in the same position).
Again this would be a mistake IMO because the new models (if they are done right) may sell well better than current ones and intercalation of new and old could actually benefit Pentax by providing a broader range of models for customers to chose. On the other hand whatever is highly competitive now against 450D and D60 may not be so cool against their successors so waiting could be MUCH worse than launching now.
Read what I said again. Why would I make MORE cameras than my market projections say I can sell? Thats suicidal, as is having too many models in a small product range with nothing to distinguish them.
1. Pentax still have too many unsold cameras and lenses sitting around because they lost momentum (due to all the uncertainty caused by our protracted takeover negotiations). We'll flog em off cheap to get rid of them before we ship any new models (expect discounts on old stuff but not new stuff).
Whether this is wise or not highly depends on what new models Pentax had developed over the 13 months after the current gen launch. If they have NOW replacements almost done and competitive on the 2009 market it's not only stupid but IMO tragical not show them. On the other hand if they only have white versions with a different neck strap, why bother?
These new models (or at least the flagship model) will have nothing to do with the current price range. Yes, maybe 10% of people who want a K20D now at 700 USD will give up and wait for a K30D at 1500 USD but in all fairness it's like saying one won't buy a Golf now because he waits for the new BMW 7 series.
Basic law of manufacturing - unsold inventory is a direct loss. You only write it off as a last resort - its much better to sell it on otherwise you have to sell a new camera for every old one in stock before you get back into profit and thats suicidal. Much better to sell at a discount and position new models so as not to compete directly.
Pentax are already discounting the K20D and I reckon they are planning a summer or fall shipment for its replacement - lots of time to move stock and indeed they could keep it in the lineup as the K30D is likely to move upmarket (vis D200 and D300 still both listed).
The model that cannot be released until the K20D is sold out is the K300D as it will come it at the outgoing K20D price (like Km and K200D).
2. We'll scale back production rates of new models to meet market projections (so we dont end up in the same position).
Again this would be a mistake IMO because the new models (if they are done right) may sell well better than current ones and intercalation of new and old could actually benefit Pentax by providing a broader range of models for customers to chose. On the other hand whatever is highly competitive now against 450D and D60 may not be so cool against their successors so waiting could be MUCH worse than launching now.
Read what I said again. Why would I make MORE cameras than my market projections say I can sell? Thats suicidal, as is having too many models in a small product range with nothing to distinguish them.
I can read an nauseum what you said but I still think Pentax just like Panasonic for example could sale 3% market share of uninspiring cameras late into 2009 or 10% m.s. of very good ones. Exactly like Panasonic increased many times it's market share from L10 to G1. IMO there is no "market prediction" only action sooner or regret latter.
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