[Samsungian]

Maybe this will prove to be an opportunity for Pentax since they've cut production facilites and jobs already due to Hoya TakeOver. This link is about Canon profits being way down and mentions Sony being in the red:

Canon profit tumbles, predicts further slide - Yahoo! News

[nostatic]

A couple of random thoughts. First off, they still posted a profit - a lot better than other businesses these days. Their cameras were down 7% in sales, and perhaps we're starting to see a bit of market saturation in addition to the economic woes. Their trajectory is south though, and there is no end in sight - that's what really worries them. Plus the biz machine sales will likely tank as layoffs increase.

This is where Pentax may have a bit of an advantage - they don't have other divisions pulling them down (depending on how they are structured at Hoya). If they have cash reserves and patient management they can hunker down and try and ride things out. That's what they'll all be doing, as it is a bit of a perfect storm for the Japanese industries at the moment. It'll be interesting to see the other numbers from other companies as they will include Q1 CY09 which will be the most brutal of all. Q4 CY08 at least had holiday sales included in the numbers.

[zntgrg]

Hoya's report is scheduled for next week, we'll see. Anyway this economic crisis takes more on big player, so hopefully shouldnìt hit SO much.

[Gooshin]

Canon profits way down, Good For Pentax?

no

10char....

[kenyee]

Ditto...no.
If the big guys not doing well, you can pretty much assume the little guys are doing badly too :-P

[Ratmagiclady]

Nah, I don't think it directly means anything good for Pentax, ...All kinds of big companies are reporting losses and declines given the global economic situation. It seems all the camera-makers are being forced to raise prices, and in a time when a lot of people have a lot less money than they did when a lot of these corporations got so big, particularly on the consumer electronics: that six thousand dollar Sony plasma TV isn't going to be something Americans are running up the credit cards on

I don't expect you'd see this translating into any immediate *benefit* for Pentax, either, but since they were already streamlining some things, they may not be needing to close factories or lay off a bunch of people. I'd still be surprised if they were posting big *profits* right now, though. Who is, after all, outside certain sectors.

What we might just *possibly* see is that times of a bit more frugality might translate into some loyal customers later, who got into photography when Pentax was positioned as makers of affordable-but-durable stuff for students. I think that's a place the company knows pretty well.

[*isteve]

Maybe this will prove to be an opportunity for Pentax since they've cut production facilites and jobs already due to Hoya TakeOver. This link is about Canon profits being way down and mentions Sony being in the red:

Canon profit tumbles, predicts further slide - Yahoo! News

This is not "good" news for Pentax but it could be a lot worse.

Because they did not announce any major new high-cost models prior to the market crash, they can tune the specs and batch size of the new models due next year to a recessionary sales forecast and this means they will not be sitting on large inventories of unused components or unsold bodies which have not recouped their development costs. They will also be able to drive down component costs and force better deals from suppliers.

Everyone else has not only overinvested in high end bodies ina frantic effort to sink the other, but has overproduced in anticipation of higher demand when growth forecasts were still positive. They will be forced to undersell to reduce inventory (this is even harder with exchange rate swings being so violent) and will have to delay new model development, so what do they do with all those factory workers? Well, as we see they are laying them off to cut costs.

Pentax really dont have that many costs to cut any more, they have done all the hard work. A slowdown in the pace of development and turnover of new models will enable Pentax to compete on more even terms with the other players who have yet to consolidate their model lines.

So, although Pentax can't ride on the back of market growth to grow volume, they could exploit their relative lack of exposure to consolidate their market position and maintain viability.

Of course a lot depends on Hoyas overall business forecasts. All I know is that Canon and Sony are staring at a very bleak corporate outlook (office products and consumer electronics) as are Nikon (steppers and scientific instruments). Pentax is a very small part of Hoya and I would assess they are much less exposed to the fortunes of their parent.

[Jonson PL]

That's what they'll all be doing, as it is a bit of a perfect storm for the Japanese industries at the moment.

How do you mean ?

[nostatic]

How do you mean ?

Yen stronger, worldwide economic slowdown (heavily in consumer goods), increasing unemployment abroad, recent relatively high-dollar product launches, market saturation in consumer cameras, rising costs, likely high parts inventories sitting.

The biz machine market will likely go seriously into the toilet. That will leave Canon and Ricoh pretty bruised. With discretionary income falling consumers will not be buying the newer/faster model. That would have been ok a few years ago when digital camera penetration wasn't as high as it is now. Far fewer people buying their first, and most less likely to upgrade. The yen strengthening is killing them on the exchange rate and consumers will not bite at higher prices. Even at low prices demand is/will be down. With price increases it'll stagnate.

The companies that have the lowest inventories and least amount of R&D costs to try and recover (along with decent cash reserves) should be able to ride it out. It'll be interesting...

[kenyee]

you know things are going badly when Toyota and Sony say this is the first year in their entire existence they've had a loss...

[Gooshin]

you know things are going badly when Toyota and Sony say this is the first year in their entire existence they've had a loss...

why do people always assume that everything should be on the rise all the time??

*ohh no, toyota is losing mooniieesss, the skiiee is faaallinngg ahhhhh*

look up economic trends

[kenyee]

why do people always assume that everything should be on the rise all the time??

Err...it's because these companies are
a) extremely well run (contrast with GM/Ford/Chrysler who *lose* money in good economic times)
b) have huge amounts of profit as long as people are buying

The problem is (b). People are no longer buying.

As for why (b) is happening, it's
A) they don't have money or have no jobs
B) are bunkered down because it seems like everyone is having layoffs
C) can't get a loan (which may be because of banks doing this same set of things)

So, no it's not the same thing IMHO...

[Gooshin]

do you know of the term "economic profit"


a company that finishes the year having paid all of its employees a salary, and having provided the world with goods and services that they need, is still "successful" even if its NET costs overshadow their NET profits

i am aware of a certain company that has been making almost zero net profit for the last 5 years, yet somehow business is flourishing and everyone gets a nice constant salary, gee wiz.


people either forget, or have never learned, or simply dont realize that it is conceptually possible for a company to push forward while losing money.

the companies that go bust are the one that do so on borrowed money, and well, thats their fault.

you bring GM into the argument, well, the last thing i read in the news about the subject matter that cought my eye, was a statement from the american car manufacturers that went something along the lines of "in the past we just kept making cars and assumed people would buy them, no we will fix that, and work towards better planning and only building according to demand"

WHAT??

anyway...

If toyota is not turning in a big profit its because the harsh realities have finaly hit americans who are now buying less, because its finally occuring to people that you cant own a 2 story house and a car on a mcdonalds salary.

you are right, btw

a) they dont have money or jobs

btw, few americans ever had "real" money, a quick google search tells me the average american income is like 35 grand....

b) bunkered down

yeah because finaly reality is catching up

c) cant get a loan

because everyone is loaned up to their throats, its about time people stopped getting loans and buying things that are WAY beyond their income bracket, status, position, social standing etc, take your pick of terms.

[awo425]

you know things are going badly when Toyota and Sony say this is the first year in their entire existence they've had a loss...

Modern Toyota car looks like a piece of cheese to me. maybe this is one of the reasons
And don't get me started with Sony cameras, I owned a few ...

[kenyee]

Modern Toyota car looks like a piece of cheese to me. maybe this is one of the reasons

I agree...even more so Honda/Acura of which nothing excites me :-)
Doesn't mean that most people buy them because they're great worry-free toasters though