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Olympus fears compact camera sales will keep falling

Bloomberg

Olympus Corp. fears sales of its compact cameras may fall by half next fiscal year, extending a decline as consumers increasingly use smartphones to take pictures.

Volume sales will drop to about 1.35 million units as early as the year starting in April, Chief Executive Officer Hiroyuki Sasa said in an interview in Tokyo on Monday. The company forecasts it will sell 2.7 million compact cameras this business year, falling 47 percent from the prior 12-month period.

Olympus joins Canon Inc., the world’s largest camera maker, in projecting shrinking demand for compact models. Increased sales of higher-end mirrorless digital cameras will make up for the earnings shortfall, helping the camera division at Olympus break even this fiscal year, Sasa said.

“The bottom line is that we can’t make a profit from compact cameras,” Sasa, 57, said. “We’ll focus on selling mirrorless models and lenses.”

The camera division will break even in the 12 months through March, ending three years of losses by saving ¥23 billion from steps including job cuts and factory reorganization, Olympus predicted this month.

The unit, responsible for 14 percent of revenue, had an operating loss of ¥23 billion in the year that ended in March, Olympus said May 15. The medical business that includes endoscopes, devices with tiny cameras used to look inside the human body, contributed more than half of sales and recorded a 28 percent gain in operating income to ¥87 billion.

Olympus canceled dividends in 2011 after restating five years of earnings. It also took a $1.3 billion cut in net assets after saying it inflated fees for takeovers and overpaid for three companies to conceal past investment losses.

Steering cameras back to profitability is a condition for restarting dividend payouts, Sasa said.

Annual sales of mirrorless digital cameras at Olympus will probably rise 67 percent to 1 million units in a few years from 600,000 in the 12 months that ended in March, Sasa said, without giving a more specific time frame.

“The market is growing,” Sasa said. “Customers in countries such as Japan, Germany and Singapore are recognizing the value added to our products.”