This Week in Imaging: Canon Hits Slump, Blames Smartphones, Strong Yen; More

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Photo credit: Kathy Wirth

This week, Canon Inc. of Japan yet again reported another difficult quarter, with both sales and net income down. The firm has been reporting lower net income since at least the spring of last year (as have many imaging vendors, though, including many Japanese companies that have been suffering from the effects of a stronger yen, which makes their products less price-competitive overseas).

One thing Canon seems to have been hoping for is that, as more and more people used their smartphones to take photos, it would spike their interest in photography and presumably prompt them to invest in dedicated digital cameras that can produce photos with better image quality. This doesn’t seem to have been the case. Our own anecdotal experience, in the United States at least, is that at sporting events, such as a horseracing, the majority of people use smartphones, while a small minority use expensive digital cameras with expensive lenses costing thousands of dollars. While a few professional photographers can obtain great photos with smartphones, it’s rare to see many from non-professionals. The reasons why consumers are opting for smartphones versus digital cameras seem to be either that the more-expensive digital cameras are deemed out-of-their-budget, or that perhaps a perception that digital cameras are too complex to operate. It could also be that cameras are not considered “cool,” or particularly useful for the selfie crowd.

The bright spot for Canon’s second quarter remains office MFPs, with the firm noting that demand for its office MFPs “remained at around the same level,” while demand and sales for both laser and inkjet printers were down. The bad news is that sales and operating profit for Canon’s six months were also both down – 9.5 and 34.5 percent, respectively. As we’ve heard before, Canon cited the appreciation of the Japanese yen versus both the U.S. dollar and euro as continuing to negatively affect its sales and revenues.

Canon’s woes neatly segue into our story of the week, which involves a bitter revolt by Lexmark employees over the proposed sale of the company to China’s APEX Technology and a consortium of investors. For years, we have admired “light on its feet” Lexmark management and its innovative hardware and software. With the proposed Lexmark sale, now we’re faced with the possibility that U.S. home-grown workflow and security solutions, and possibly toner plants, could be floated overseas in shipping containers.

Konica Minolta also posted its first-quarter results this week, and while Canon cited essentially weak consumer demand (for digital cameras, and laser and inkjet printers used by consumers and small businesses) for its weak results, Konica Minolta cited non-consumer, lower sales of office MFPs. This was somewhat offset by higher sales in its Healthcare Business. For its part, Konica Minolta is looking to generate revenue growth with its acquisitions – for instance, with MOBITIX, a German maker of video-surveillance cameras, which Konica Minolta has a 65-percent stake in. Overall, branching out into other areas – and big shakeups – continue apace in the office-imaging industry.

Financial News

  • Canon Cuts Forecast as Sales, Income, Decline in Second Quarter – Read more here.
  •  EFI Second-Quarter Revenue up 21 Percent to $264 Million, But Net Income Slides – Read more here.
  •  Hit Hard by Stronger Yen, Konica Minolta’s Net Revenues and Profits Decline for First Quarter – Read more here.
  •  Fujifilm’s First-Quarter Profits Decline as Shipments of Printers to Xerox Suffer Sharp Decline – Read more here.

Office-Imaging News

  • Lexmark Employees Warn of 45-Percent Workforce Reduction, APEX to ‘Absorb’ Lexmark R&D, Shift Operations to China’ – Read more here.
  • ABBYY Fine Scanner OCR Scanning Solution Now Available for Android Mobile Devices – Read more here.
  • Other News
  • Ricoh India Chairman and Director Takano Resigns in Wake of Accounting Scandal – Read more here.

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July 2016

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