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Nikon chief looks for way to ride smartphone boom

Bloomberg

Nikon Corp. is looking at ways to tap smartphone growth as a slump in compact camera sales threatens to prevent earnings from meeting forecasts.

Point-and-shoot camera sales across the industry dropped about a quarter in April and May from a year earlier, President Makoto Kimura said Thursday at Nikon’s Tokyo headquarters, citing third-party research.

Shipments of smartphones meanwhile jumped 46 percent last year to 722 million units, according to international researcher IDC Corp.

“The number of people taking snapshots is exploding by use of smartphones that sold 750 million or so last year and are still growing,” Kimura said. “We’ve centralized our ideas around cameras but can change our approach to offer products to that bigger market.”

The company’s first-quarter earnings estimates were set “fairly low” and the results will probably be close or “a little short,” he said. Nikon doesn’t disclose quarterly forecasts and the executive declined to provide more details.

Nikon, whose Coolpix models are offered for as low as ¥5,500 online, projected in May a 53 percent gain in net income for the year started April 1, following a 28 percent decline in profit in the previous year.

The company, whose imaging division generated 84 percent of operating income last fiscal year, expects the compact camera market to shrink 12 percent in the current financial year, according to its May projection. High-end models with exchangeable lenses may gain 9 percent, the company said May 9.

The company doesn’t plan to change the forecasts, Kimura said.

Demand for Nikon’s high-end cameras, like the D4-SLR that retails for about ¥600,000, can help compensate for slower sales of point-and-shoot models at least for several more years, Kimura said, even as the company looks for new ways to generate growth.

Nikon’s imaging division and a new business team are working on products that are expected to be available in less than five years, he said.

“We want to create a product that will change the concept of cameras,” Kimura said. “It could be a non-camera consumer product.”

He declined to say if the company was developing a mobile phone.

Global shipments of compact digital cameras slid 48 percent in May from a year earlier, while more expensive single-lens-reflex sets, or SLRs, declined about 6 percent, according to the Camera and Imaging Products Association in Tokyo.

“Rapid expansion of mobile devices is a change in business environment given to us,” Kimura said. “Our task going forward is to find an answer to that change.”

Nikon may also consider expanding into production of medical devices and aims to start generating revenue within three years, Kimura said.

Canon Inc. and Sony Corp. have announced tie-ups with hospitals and medical equipment makers as they search for growth. Camera maker Olympus Corp. is the world’s largest maker of endoscopes.

Kimura said Nikon hasn’t ruled out acquisitions to expand in medical business, but there are no specific talks under way.