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08-05-2010, 09:24 AM   #61
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QuoteOriginally posted by falconeye Quote
Don't think so. Canikon would and so, their offers for Pentax would be small.

But Sony wants to grow to be at least same size as Canikon. They can buy the Pentax market if they manage to maintain product compatibility (K-mount, either native or via adapters) and if they incorporate the Pentax genes (great ergonomics, small, outdoor, primes etc.).
And the path to growth is to have n incompatible systems? Sorry, but (IMO) it doesn't make any sense. Sony's future is in the NEX series, not with starting all over again.
Also, I doubt Canikon would spend that much money just to kill Pentax. Remember, Pentax is growing; Hoya won't sell them for nothing (I have doubts they'll sell Pentax at all). This means any strategy that begins with "buy Pentax cheap" can't be implemented

Aristophanes: "Pentax is NOT upmarket.[...] The 645D is at the lower end of the MF digitals, so int at realm Pentax is the low-end." Yeah, sure - even a Rebel is more upmarket than the 645D, riiight?

08-05-2010, 09:40 AM   #62
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QuoteOriginally posted by GLXLR Quote
Hey Aristophanes. Although I'm not experienced in economics as some of the users here are, I would like to point out that Hoya's products are mainly used by consumers indirectly, much like steel: no one goes out to buy steel these days, only big companies use the steel and turn it into something else like Carnegie (US steel). Intel doesn't sell processors much directly (ofc some of us here have custom built computers ;D ) yet its name is everywhere because its computers are so important and daily used while I think Hoyas products like medical equipment and optics in CD drives and lasers etc aren't nearly as daily and occupy a small niche of people, with most of those people not even caring about where these optics came from. So in my mind, I don't think Hoya needs/can get public attention and I think should be in a large part scratched out from Hoya's interest in Pentax.

Please correct me if I'm wrong. Not trying to offend anyone here although i love reading this discussion!
The reason why Intel branded itself was partially to boost its profile amongst those brands (Compaq, Dell, HP, etc.) looking for a cheaper source or processors from AMD, TI, etc. This is called co-branding, and it began in the mid-1990's. There's lots of it around now, like Dairy Queen with Oreo cookies.

At times, it can be more economically efficient to outsource your supply chain. Why invent a new cookie crumble recipe to mimic Oreos when you can share profits by co-branding?

But that cycle appears to be coming to an end. Point in fact, Apple buying its own semiconductor design and manufacturing businesses. Intel also hedged its bets with regards to semiconductors by making Intel so well known that if the company had to branch out to B2C products, it would be ready.

For Hoya/Pentax, it's hard to say. Their issue is not the optics, but the sensors. Canon, Samsung, Sony, Fuji, and now Nikon (limited) make their own because it is now more efficient to do this all in-house and vertically integrate development. So for Hoya the Pentax venture includes both a mass market retail presence not in their DNA, but also they need to source very large volumes of materials like sensors from external sources, possibly at higher prices and with less control than the in-house manufacturers. This can go wrong, as well, for vertical integration. Fuji appears to be stumbling, for example, and Canon is getting some market feedback that they have too many P&S models, swamping supply and choking off their higher-margin units.

Last edited by Aristophanes; 08-05-2010 at 06:54 PM.
08-05-2010, 10:19 AM   #63
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Good points, Mr. A.

To go on a bit further: Co-branding assumes that both brands have significant consumer value and also assumes that the brands will complement one another. Co-branding may offer lower-cost components or it may simply be a way for both firms to stretch their marketing budgets.

I'm not sure what "Pentax" means to the mass-market consumer who is not a student of the camera marketplace and its history. I suspect it brings little to any equation here in the US, but then I'm only familiar with that market.

The mass market (other than eyeglasses in Japan, perhaps) is not in Hoya's DNA. But they certainly know that it's a much different market than B2B and requires much different skills. It's particularly difficult when there are many geographic and cultural markets to understand.

Their filter line is quite different - a series of technical products sold to educated consumers. There are not many cultural differences in how a filter is perceived and no difference in how it's used. Cameras as systems present entirely different marketing and distribution challenges.

As you note at the end, sensors are a key differentiator among cameras/brands. Without large market share, Pentax cannot afford to operate a competitive and affordable sensor R&D operation. Even if they outsourced the fab, they're still not going to get the economies of scale that others enjoy.

That means that Pentax is dependent on whatever sensors other firms, perhaps direct competitors, will develop for their own purposes and also be dependent upon which sensors the makers will agree to sell to Pentax. As Pentax share grows, at the expense of others, the situation becomes even more tricky. Pentax could still be too small to do their own sensors at a reasonable cost but too large to get first crack at their competitors' sensors.

Hoya's track record suggests that they want to have a large enough share that they help drive a market rather than have so small a share that they can only follow it.

Unless, of course, they can get Pentax to margins of 20-30%. And I just don't see any way that can happen as long as Pentax is seen as a value brand.
08-05-2010, 10:41 AM   #64
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QuoteOriginally posted by Pål Jensen Quote
Why would it make more sense than buying Konica-Minolta?
Wouldn't. But buying KM wasn't sufficient, it seems.

QuoteOriginally posted by Kunzite Quote
And the path to growth is to have n incompatible systems? Sorry, but (IMO) it doesn't make any sense. Sony's future is in the NEX series, not with starting all over again.
That may or may not be the case.
To integrate Pentax wouldn't be easy. But I wouldn't foresee incompatible systems. Rather mount adapters or variants in cameras and lenses during a transition phase, maybe as long as mirrors aren't made obsolete.

Sony's future may be the NEX series indeed. But they purchased KM to get access to more ambitious photographers incl. the pros actually.

It's pure speculation on my part anyway and I don't say that buying Pentax would actually make sense for Sony. But then even less for anybody else.

08-05-2010, 10:54 AM   #65
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QuoteOriginally posted by glanglois Quote
Good points, Mr. A.
Hoya's track record suggests that they want to have a large enough share that they help drive a market rather than have so small a share that they can only follow it.

Unless, of course, they can get Pentax to margins of 20-30%. And I just don't see any way that can happen as long as Pentax is seen as a value brand.
Somewhat pradoxially, Hoya could still be interested in keeping Pentax even if only for being a marketing vehicle, as Pentax cameras are sold to so many more end users than many other Hoya products and carry a clear Hoya - owned brand name. Pentax products carry for Hoya the values and message of quality, novelty, uniqueness and affordability to so many users and that has a potential for expanding the Hoya brand recognition. In this regard Hoya and Pentax could be sharing a two way mutual benefit.
08-05-2010, 11:15 AM   #66
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QuoteOriginally posted by Pål Jensen Quote
Why would it make more sense than buying Konica-Minolta?
The big thing is that the actual name, 'Konica-Minolta' stayed with Konica-Minolta. Sony ended up with the TM name α(alpha). I could see Kodak doing will by acquiring Pentax.
08-05-2010, 11:21 AM   #67
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This speculation about Sony is depressing. I really can't overstate how much I despise Sony consumer products in general -- cheaply made, plasticky, expensive, and full of proprietary nonsense where better standardized solutions exist. (Betamax, anyone? Memory stick? i.LINK, ATRAC, MiniDisc, UMD, I could go on and on.)
08-05-2010, 11:22 AM   #68
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QuoteOriginally posted by Blue Quote
The big thing is that the actual name, 'Konica-Minolta' stayed with Konica-Minolta. Sony ended up with the TM name α(alpha). I could see Kodak doing will by acquiring Pentax.

Gosh... I hope it is not kodak, which is usually associated with low-end consumer products like the throw-away camera. If Hoya really decide to sell to another Japanese Co., I hope it is Hitachi rather than Sony; and whoever buys it should also keep the Pentax brand instead of killing it like Sony did to K-M.

08-05-2010, 11:26 AM   #69
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Falconeye, then in your opinion Sony would kill Pentax. A system can't be maintained only with adapters.
OK, buying KM wasn't "sufficient" - but doing the same thing twice would be? If it doesn't work, try again, and again, and again? Why not investing the huge amount of money required to buy another company/division into R&D and marketing?
And don't forget, buying K-M was required (in order to enter on this market). Buying Pentax, it's both unnecessary and a crazy idea. Sony already have all the technology they need and two systems to take care of.
08-05-2010, 12:12 PM   #70
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QuoteOriginally posted by Kunzite Quote
Buying Pentax, it's both unnecessary and a crazy idea.
I agree it's a crazy idea :ugh:

QuoteOriginally posted by Kunzite Quote
Why not investing the huge amount of money required to buy another company/division into R&D and marketing?
That's a question I ask myself for each and every M&A I read about. IMHO, for a manager to think in terms of M&A is a way to express his incompetence. But then, I didn't create the thread, right?
08-05-2010, 01:48 PM   #71
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QuoteOriginally posted by Aristophanes Quote
Pentax is NOT upmarket. Maybe there is some trend here with the Limited lens series, but not the bodies. The 645D is at the lower end of the MF digitals, so int at realm Pentax is the low-end..
Nothing could be further from the truth. The fact is that the 645D is the most advanced MF DSLR on the market with an enormeous margin. In addition it is the most solidly made of them all and it is the only weather sealed one. The fact that the competition cost more tells more about the competition than the 645D...
08-05-2010, 01:58 PM - 1 Like   #72
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QuoteOriginally posted by falconeye Quote
But Sony wants to grow to be at least same size as Canikon. They can buy the Pentax market if they manage to maintain product compatibility (K-mount, either native or via adapters) and if they incorporate the Pentax genes (great ergonomics, small, outdoor, primes etc.). And another source for great lenses would help too. Cameras like the K-x with an "old" Sony sensor outselling everything Sony has on offer must make them make shake their heads. Sure that joining forces with Pentax would make sensir for Sony. At least as long as they aren't doing better in the system camera segment.
I've read one criticism that Sony is a big subscriber to the "not invented here" mentality. I suspect that part of their initial failure to make a splash in the market (and theirs subsequent move to a new mount) are in part their refusal to run with what they picked up from Minolta.

QuoteOriginally posted by falconeye Quote
There actually could be a long-term perspective within Hoya if you consider Pentax to be world-market leader for extreme image quality cameras (aka medium format) which they soon may become.
With popular APS-C cameras to sell in sufficient numbers to pay the bills for the time being...

QuoteOriginally posted by falconeye Quote
And maybe, just maybe, Hoya managers keeps Pentax to spice up their boring lives. I mean, what greater opportunity to meet models do they have
Heh heh. One problem with that logic .. have you been to Japan? Do you know how these guys blow off steam? Entertaining Japanese businessmen is a big industry both in Japan and overseas.
08-05-2010, 01:59 PM   #73
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QuoteOriginally posted by aleonx3 Quote
Gosh... I hope it is not kodak, which is usually associated with low-end consumer products like the throw-away camera. If Hoya really decide to sell to another Japanese Co., I hope it is Hitachi rather than Sony; and whoever buys it should also keep the Pentax brand instead of killing it like Sony did to K-M.
I guess you forgot the Kodak was the major player in film? I guess you realize that the sensor in the 645D is a kodak sensor? Furthermore, one more time, Sony didn't kill the Konica-Minolta brand. They never had it to kill because Konica-Minolta is still using the name. The just got out of the camera business. That was part of the problem Sony had. They tried to use alpha in its place. Hitachi has nothing to offer except maybe marketing.
08-05-2010, 02:39 PM   #74
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QuoteOriginally posted by falconeye Quote
I agree it's a crazy idea :ugh:


That's a question I ask myself for each and every M&A I read about. IMHO, for a manager to think in terms of M&A is a way to express his incompetence. But then, I didn't create the thread, right?
I think I did.

I was not suggesting that any company would benefit from buying the Pentax IP and operations. I don't know that any would. I opened it for a discussion to which you helpfully added. I certainly agree that many mergers and acquisitions are fueled by management's lack of imagination/skill multiplied by pressure from owners rather than being driven by keen business sense.

I was only noting an analyst's assumption that Hoya would sell. And a sale implies a buyer, barring the unlikely spinoff. The buyer may be making an error in the long run but (as you note) that doesn't always prevent the sale.

If it's not a good deal for anyone, and they all see that, then I'm confident that Hoya will work diligently at growing the Pentax business.

I did not intend to put a cat among the pigeons but simply to have a discussion of other ways that Pentax could fit into a post-Hoya world. Didn't seem to get much of that.

In any event, I expect to keep shooting Pentax for a long time. The sky is not falling. I am not in panic mode. Nor should one be. I have no doubt that I will make another significant investment in my Pentax kit before the end of this year. It's OK.

Last edited by glanglois; 08-05-2010 at 02:41 PM. Reason: Correction
08-05-2010, 06:16 PM   #75
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You don't read between the lines! it is not his assumption whether they sell or not THAT IS A FACT! the assumption comes in the upside or downside risks in it. So the division is up for sale, the analyst assumes if it sells early then it is an upside risk for Hoya if late then it is downside . Only the ones who know that timeline are able judge if those assumption are in line or not, but the FACT remains : Pentax is up for sale. just my two cents..rob
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