[Biro]

This entire discussion points, once again, to the fact that Pentax needs a partner. Hoya's CEO said as much last year. Yes, it's true that Pentax - like most of the Japanese cameramakers - is quite cautious and conservative. The truth is, so are most photography enthusiasts. But Pentax also lacks resources and have just become profitable again after closing their last factory in Japan. I'd love to see all the things that Pentaxians want: more lenses, a full-frame camera, a medium-format camera, an EVIL. I myself have railed for some of these. But very little is likely to happen unless Pentax gets a strong partner with deep resources. We can only hope 2010 is the Year of the Breakthrough.

[Kunzite]

"more lenses, a full-frame camera, a medium-format camera, an EVIL" - just those few things?

[Biro]

Well, exactly. Pentaxians have been screaming for a lot from a company with limited resources right now. And everyone says "Don't build what they want; build what I want."

[Art Vandelay II]

Wow, even Canon is now starting to be a rumored future m4/3's partner:
Cateto blog: More brands joining the micro-4/3 system? Canon??!!

I'll believe Canon joining when I see it. However they may not have a choice if Fuji and Kodak join (which I've read a lot of rumors about lately). I don't think even a behemoth like Canon could take on a 4 company partnership all sharing the same mount and lenses...you'd have to be one major Canon fan boy to choose their version using a proprietary lens mount. In 5-7 years our camera options will be as follows (in ascending order):

1. Camera Phones
2. Large sensor compacts (but smaller than the 4/3's sensor)
3. m4/3's
4. Pro-grade DSLR's in both APS-C and full frame varieties (D300, D700, 5D Mk II, 7D, K7, etc)

Pocket size P&S's and cheap entry level DSLR's are going the way of the dodo. I sure wish Pentax would join also (just leave Samsung out in the wind for all I care). It would be great to have glass from Olympus, Panasonic (surprisingly good lenses so far), and Pentax all working together on a Fuji camera and their wonderful sensors.

[Samsungian]

Why is Pentax in need of a partner when Hoya shares sell for 2,570 Yen ?

Hoya is looking to spend another BILLION US Dollars on another aquisition in medical field, for their portfolio.

In the meantime they have now closed all production plants in Japan and offshored production and their Hoya stock is up sharply in past year. Recession, what Recession?

Accelerating Factory Exodus Guts Japan Manufacturing Center - Bloomberg.com



Hoya is shopping for another medical company:

http://www.bloomberg.com/apps/news?sid=aRJv.HxndPMY

[juu]

Hoya is looking to spend another BILLION US Dollars on another aquisition in medical field, for their portfolio.

Exactly, it shows where their focus is! Do we know for sure Hoya will invest in the camera business? Just because they have the money to do it doesn't mean they will. They probably bought it for the other Pentax businesses, after all.

Why is Pentax in need of a partner when Hoya shares sell for 2,570 Yen ?

It may still make sense to have a partner, for example, one with good video and electronics know-how given how EVIL and DSLRs-turned-videocameras are the newest trends and probably are going to stay that way.

[Kunzite]

Do we know for sure Hoya will invest in the camera business?

Yes, we know.

[juu]

Yes, we know.

What do you base this assessment on?

[Kunzite]

Well... Pentax still have an R&D budget, and I don't think that would go away
But, it's not the kind of investment (or, the amount of $$) you'd like. Nowhere near 1 billion $, in any case.

[Biro]

Why is Pentax in need of a partner when Hoya shares sell for 2,570 Yen ?

Hoya is looking to spend another BILLION US Dollars on another aquisition in medical field, for their portfolio.

In the meantime they have now closed all production plants in Japan and offshored production and their Hoya stock is up sharply in past year. Recession, what Recession?

Accelerating Factory Exodus Guts Japan Manufacturing Center - Bloomberg.com

Hoya is shopping for another medical company:

Hoya Eyes $1 Billion M&A to Boost Health Business (Update2) - Bloomberg.com

You must remember that Hoya owns several different businesses that run independently of each other. Each must run at a profit. While losses at a single unit can be subsidized for a while by the others, neither top Hoya executives nor the stock market will tolerate it for long. Hoya's medical business is much larger and much more profitable than its camera business. That's why dropping a cool billion on expansion makes sense.

Meanwhile, there is a big difference between a company's stock price and available cash for research and development. Of course, the markets loved it when Hoya closed the last Japanese factory and opted for cheaper labor elsewhere. And the markets loved it even more when that resulted in the company finally getting back into the black. But Hoya's stock price wouldn't be where it is if Pentax was still losing money - and looked like it would continue to lose money. A company's stock price is a reflection of the market's expectations for it going forward. And the market's definition of success is limited to one thing: making money. It doesn't care if Hoya makes cameras, medical equipment, glass slugs or automatic rice pickers.

Don't think for a moment that Pentax - as a unit unto itself - has deep enough pockets to keep up with the product development we see from the biggest camera makers or the biggest consumer electronics companies.

Hoya's CEO stated publicly - and clearly - last year that his goal was to put Pentax in the black in 2010. He has succeeeded. But he also said - again, clearly - that Pentax needs a partner in order to compete long-term. He was correct and remains correct.

That doesn't mean Pentax is about to fold or anything like that. But without deep enough pockets to mount both a major product push and global advertising blitz, Pentax will continue to slowly fall further behind over the next decade until the red ink flows again. Unless, of course, the company gets a partner that has the money. I'm sure Hoya's CEO is quietly working on it.

For those Pentaxians who say "I don't care about EVILs and cameras that are popular with general consumers. Just as long as Pentax makes cameras with OVFs that I can use my classic Takumars on, I'm happy," all I can say is, that's a sure recipe for Pentax's ultimate demise. Hey, I want those kinds of cameras, too. But Pentax is too small to survive on the hard-core enthusiast market alone.

In order for the company to continue making cameras the enthusiasts want, it must sell a good amount of cameras in the consumer market. It doesn't have to sell as many cameras as Canon, Nikon and Sony, mind you. But it has to gain economies of scale to fund development of future products that will sell and provide still more money for new products and... you get the idea.

[RuiC]

What do you base this assessment on?

Read the Bloomberg link in post #95 :

Quote: "Partnership For Pentax

The Pentax division will have to build a partnership in order to ...

I don’t know whether we’ll go with Samsung or somebody else, but I can say that we’ll have a deeper relationship with some electronics guys,” Hamada said. “There will be consolidation in the camera business and a small player like us will be like a small boat on a rough sea. But let me be clear: we will not shut down this business.” EOQ

Rui

[johnmflores]

I agree 100%. What this group wants or needs is probably very different from what the general public wants or needs and what Pentax wants or needs. The survey I launched in the dSLR forum shows that only ~15% of people here want an EVIL camera while ~50% want a full-frame. Those numbers are in stark contrast to what you see on Amazon's top 25 dSLR list:

- only 2 FF cameras
- In one year Panasonic has gone from having no products of note in this category to two, which is even more impressive considering the fact that it is brand with no SLR tradition marketing two imperfect, first generation, new system products.
- No other brand besides Canon and Nikon has 2 products on the list
- The only other brand on the list is Pentax, with the K-x.

Which brings me to my next point, despite the doomsayers and the gnashing of teeth regarding Pentax's finances and future and the grumbling about SDM and AF and flash performance and whatnot, Pentax introduced two really awesome cameras last year - the K7 and K-x.

Why don't we pause for a moment and give Pentax a well-deserved round of applause....



Hoya has made some smart financial moves, and Pentax is to be rewarded for taking some risks with colors for the K-x. We're not out of the woods yet, but I believe that we are headed in a positive direction.

Let's hope that 2010 bring continued positive momentum with a 645D, a K7s, and an EVIL K-x (make mine blood red)!!!

You must remember that Hoya owns several different business that run independently of each other. Each must run at a profit. While losses at a single unit can be subsidized for a while by the others, neither top Hoya executives nor the stock market will tolerate it for long. Hoya's medical business is much larger and much more profitable than its camera business. That's why dropping a cool billion on expansion makes sense.

Meanwhile, there is a big difference between a company's stock price and available cash for research and development. Of course, the markets loved it when Hoya closed the last Japanese factory and opted for cheaper labor elsewhere. And the markets loved it even more when that resulted in the company finally getting back into the black. But Hoya's stock price wouldn't be where it is if Pentax continued to lose money - and looked like it would continue to lose money. A company's stock price is a reflection of the market's expectations for it going forward.

But don't think for a moment that Pentax - as a unit unto itself - has deep enough pockets to keep up with the product development we see from the biggest camera makers or the biggest consumer electronics companies.

Hoya's CEO stated publicly - and clearly - last year that his goal was to put Pentax in the black in 2010. He has succeeeded. But he also said - again, clearly - that Pentax needs a partner in order to compete long-term. He was correct and remains correct.

That doesn't mean Pentax is about to fold or anything like that. But without deep enough pockets to mount both a major product push and global advertising blitz, Pentax will continue to slowly fall further behind over the next decade until the red ink flows again. Unless, of course, the company gets a partner that has the money. I'm sure Hoya's CEO is quietly working on it.

For those Pentaxians who say "I don't care about EVILs and cameras that are popular with general consumers. Just as long as Pentax makes cameras with OVFs that I can use my classic Takumars on, I'm happy," all I can say is, that's a sure recipe for Pentax's ultimate demise.

Pentax is too small to survive on the hard-core enthusiast market alone. In order for the company to continue making cameras the enthusiasts want, it must sell a good amount of cameras in the consumer market. It doesn't have to sell as many cameras as Canon, Nikon and Sony, mind you. But it has to gain economies of scale to fund development of future products that will sell and provide still more money for new products and... you get the idea.

[juu]

Biro and johnmflores, good posts.

But let me be clear: we will not shut down this business

It's obviously better that he says this than if he doesn't. However, it doesn't mean more than "We don't currently have plans to shut Pentax down, if they stay profitable we won't even have to consider that".

Also, "not shutting down" and "actively investing to keep up with the competition" are two different things.

I look at 645D as an indicator that Hoya is serious about the camera business as even though it was begun pre-Hoya it probably requires a lot of additional investment to launch (which I hope will happen soon). I could be wrong, and I don't know what the lead times are in this industry.

[Art Vandelay II]

Those numbers are in stark contrast to what you see on Amazon's top 25 dSLR list:

- only 2 FF cameras

That has more to do with price then what people actually want. When Canikon release a $1500 FF DSLR (and sooner or later they will) I'd be incredibly shocked if it doesn't out sale $1000-1300 APS-C DSLR's. I've settled for every single APS-C DSLR I've owned just because I can't afford/justify $2500 cameras, not because I prefer APS-C.

- In one year Panasonic has gone from having no products of note in this category to two, which is even more impressive considering the fact that it is brand with no SLR tradition marketing two imperfect, first generation, new system products.

I agree with that, impressive indeed.

- The only other brand on the list is Pentax, with the K-x.

Which brings me to my next point, despite the doomsayers and the gnashing of teeth regarding Pentax's finances and future and the grumbling about SDM and AF and flash performance and whatnot, Pentax introduced two really awesome cameras last year - the K7 and K-x.

Why don't we pause for a moment and give Pentax a well-deserved round of applause....

Yep, Pentax did well for themselves, it seems as though they've got the new "D40" with the K-x (meaning, best and smallest entry level DSLR), but they still need to keep pushing forward. Going against the grain of what everyone else was doing with the K-7 paid off...so they need to keep it up. Currently no one has a high quality EVIL (all are designed at entry level users so far...complete with smile detection and scene modes...barf), so there is a niche to make a poor mans Lecia M9. Also, no one is making a full frame camera even remotely close to portable (5D, D700, and A900 are all beasts). There's another niche. If Pentax wants to have another good year they need to fill these gaps before someone else does.

[audiobomber]

- In one year Panasonic has gone from having no products of note in this category to two, which is even more impressive considering the fact that it is brand with no SLR tradition marketing two imperfect, first generation, new system products.

Panasonic is huge and highly successful electronics company with a lot of relevant resources. They've been very strong in the p&s market for a long time, and an EVIL has a lot more in common with p&s than it has with SLR. In fact I can't think of any way that an EVIL differs from a bridge cam, other than the lens can be detached.

SLR's require highly sophisticated mechanics, especially given today's very high frame rates. P&S and EVIL are comparatively simple technology. Any company that makes a p&s camera can make an EVIL camera, whereas the only way to make a dslr is to buy out one of the existing players.