Konica Minolta Leaves Photo Industry

January 19, 2006 | Mark Goldstein | Global | 24 Comments |

Konica MinoltaSome shocking news to wake up to this morning - Konica Minolta has announced that it is leaving the camera and photo business (both digital and film) by March 31st 2006. I’d heard a couple of days ago that Konica Minolta had dropped out of the Focus on Imaging UK trade show - now it transpires that the company is pulling out of the photo industry for good. Digital SLR camera assets concerning Konica Minolta’s Maxxum/Dynax lens mount system have been transferred to Sony, although it’s unclear yet exactly what that means. Konica Minolta has made some great cameras, with their recent 7D and 5D digital SLRs being particularly good, but it seems that they just haven’t been able to compete with the bigger players.

Konica Minolta Press Release

Konica Minolta Announces Withdrawal Plan for Camera Business and Photo Business

Konica Minolta has long been a leading company in photo imaging business covering wide range of imaging from input to output. In addition, we have provided inspiring products and services by fusing our unique technologies.

In camera business, we have expanded picture-taking opportunities by developing innovative technologies such as the world’s first autofocus cameras. In 1962, our camera, well-accepted for its high reliability, boarded on the US’s first manned spaceship “Friendship 7.” Also, ever since introduction of the world’s first body-integral autofocus SLR camera, Maxxum/Dynax series, in 1985, SLR cameras have become more popular among picture-takers, and we have succeeded in selling 16 million units of interchangeable lenses since then.

However, in today’s era of digital cameras, where image sensor technologies such as CCD is indispensable, it became difficult to timely provide competitive products even with our top optical, mechanical and electronics technologies.

In photo business, represented by the silver-halide photography such as color film and color paper, we have produced Japan’s first photographic paper in 1903, and Japan’s first color film in 1940, thus pioneering joy of photography for more than a century. In 1984, we introduced the world’s first compact washless photofinishing system known as a minilab system. The minilabs contributed to the expansion of worldwide photographic market by making photos closer to consumers and amazingly shortening delivery time.

However, traditional silver-halide photographic market is shrinking astonishingly by the surge of the worldwide digitization. In such a changing world, profits for camera and photo businesses worsened in recent years, and it became necessary to drastically reform business structure for the further growth of Konica Minolta. Ever since we decided and announced restructuring guidelines of our businesses on November 4, 2005, we have been considering practical and detailed plan, and we would like to announce our decision made today as follows:

1) Camera Business
In camera business, we have reached an agreement with Sony Corporation(Sony), having numerous image sensor technologies such as CCD and CMOS, to jointly develop digital SLR cameras in July 2005. In order to continue to have our customers use Maxxum/Dynax lenses, and to maximize possibilities of the optical, mechanical and electronics technologies accumulated through development of SLR cameras in the years to come, we came to the conclusion that it was best to transfer assets concerning camera business to Sony. Since then, we have been negotiating with Sony, and as a result, we have reached an agreement with Sony to transfer a portion of assets regarding digital SLR camera system to Sony*1. In this relation, we have decided to withdraw from camera business*2, such as film cameras and digital cameras, within Konica Minolta Group as of March 31, 2006.

Sony is planning to develop digital SLR cameras compatible with Maxxum/Dynax lens mount system, so that the current Maxxum/Dynax users will be able to continue to use them with Sony’s digital SLR cameras. In addition, we will consign camera service operations for Konica Minolta, Konica,Minolta brand cameras and related equipment to Sony.

*1   Pease refer to the news release, “Partial Transfer of Assets Related to Digital SLR Cameras “, separately announced today.
*2   Except for digital SLR cameras and interchangeable lenses produced for Sony.

2) Photo Business
In today’s shrinking photographic market represented by color film and color paper, we have been considering to scale back and to continue photo business at an appropriate size; however, when we foresee the photographic market, it is quite difficult to maintain profitability in this field, and we have decided to withdraw from photo business. As schemed below, we will, as much as possible, avoid causing any inconvenience in providing products to our worldwide customers in the course of withdrawal.

For color film and color paper, while considering our customer needs, we will step-by-step reduce product lineup and cease our color film and color paper production by the end of fiscal year ending March 31, 2007.

For minilab business, we will cease production of the system by the end of fiscal year ending March 31, 2006; however we will have such company as Noritsu Koki Co., Ltd to provide maintenance and customer services so as not to cause any inconvenience to our customers.

*1   Pease refer to the news release, “Consignment of Service and Maintenance Operations for Minilabs “, separately announced today.

In line with the above scheme, with consideration to our customers and regional situations, we will step-by-step reorganize our sales offices and withdraw from all of our photo sales activities by September 30, 2007.

3) Personnel Management
As a part of Konica Minolta Group’s restructuring, we will proceed with withdrawal plan for camera and photo businesses and aggressively shifted their management resources to other Konica Minolta Group companies. While continuing this effort, in order to rationalize a number of employees, we have decided to reduce worldwide Konica Minolta Group employees by 3,700 from the current 33,000 including early retirement offering by September 30, 2007*.

*  The early retirement offering is for Konica Minolta Group’s holding company, five business companies and two common function companies in Japan.

The expenses to be incurred with this restructuring are already included in the forecast for fiscal year ending March 31, 2006.

Konica Minolta Group will make our utmost efforts not to cause any inconvenience to our customer due to the decision we made this time. At the same time, camera and photo businesses are our traditional businesses ever since our founding, and we wish to express our heartfelt appreciation to the worldwide Konica Minolta fans for their patronage to our products for more than a century.

Konica Minolta Group is aiming to become more powerful corporate group by swiftly meeting market changes and pursuing “selection and concentration”. We will, from now on, be concentrating our business resources on non-consumer businesses, such as the core “business technologies” field, the strategic “optics and display devices” field, and the growth expected “medical imaging” and “sensing” fields, increase competitiveness, and endeavor to further expand corporate value.

Outline of camera business Main business: Manufacturing, sale, and related services of photographic equipment such as digital cameras, film cameras and lenses
Fiscal year ended March 31, 2005: Net sales: 117,000 million yen (Forecast for fiscal year ending March 31, 2006 is 75,000 million yen)
Operating Loss: 7,300 million yen

Outline of photo business Main business: Manufacturing, sale, and related services of consumer and commercial photographic materials, inkjet media, and related equipment
Fiscal year ended March 31, 2005: Net sales: 151,500 million yen (Forecast for fiscal year ending March 31, 2006 is 110,000 million yen)
Operating Loss: 1,400 million yen


Partial Transfer of Certain Assets Related to Digital SLR cameras

Since July 2005, Sony Corporation (Sony) and Konica Minolta Photo Imaging, Inc. (Konica Minolta PI) have been working on the joint development of digital single lens reflex (SLR) cameras. Sony, Konica Minolta Holdings, Inc. and Konica Minolta PI are pleased to announce that they have decided to transfer a certain portion of Konica Minolta PI ’s assets related to digital SLR cameras to Sony, and at the same time, that Konica Minolta PI will consign its customer service operation for Konica Minolta cameras and related products* to Sony. Agreement to this effect was reached today.

Under this agreement, on March 31 2006, Sony will receive certain assets from Konica Minolta PI that are necessary for the development, design, production and so forth of digital SLR cameras compatible with Konica Minolta PI’s “Maxxum/Dynax lens mount system”.** Sony will accelerate development of new digital SLR cameras based on and compatible with the Maxxum/Dynax lens mount system with a view to marketing these models this summer.

On the basis of its ongoing “selection and concentration”, Konica Minolta Group will concentrate on its core “business technologies” field and its strategic “optics and display devices” field and withdraw from camera business*** as of March 31, 2006. At the same time, Konica Minolta PI will partially transfer certain assets related to digital SLR cameras to Sony.

From April 1 2006, Konica Minolta PI will consign the customer service operations for Konica Minolta cameras and related products* to Sony, and Sony will implement service operations from that date onward.

* Konica Minolta, Konica and Minolta brand film cameras, digital still cameras, lenses, accessories etc.
** An original lens mount system to connect camera body and lens adopted in Konica Minolta Maxxum/Dynax series SLR cameras
*** Excludes production of digital SLR cameras and interchangeable lenses for Sony



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24 Comments | Newest Oldest First | Post a Comment

#1 Nicholas

Just maybe K-M discovered what Olympus' "Suprize" is going to be on January 26 and they threw up their hands declaring 'We can't beat that'.

(tounge in cheek, but it is possible)

Regards, Nicholas

3:02 pm - Thursday, January 19, 2006

#2 Josh

I am shocked and surprised that a company that's been able to make 2 very good Digital SLRs is leaving the market where other manufacturers are able to compete with simply rebadged cameras, and no digital SLRs.

3:49 pm - Thursday, January 19, 2006

#3 Jason

Ironically enough, Canon produced it's 30 Millionth EF-mount lens today

http://www.dpreview.com/news/0601/06011902canonef.asp

3:58 pm - Thursday, January 19, 2006

#4 AA

GOODBYE, MINOLTA........
(I'm leaving the Konica bit out, because I think that is what sank the consumer camera division in the end, this partnership that led to the K-M company to go towards copiers and industrial equipment).

Minolta were the first company ever to release a full-automatic SLR in 1986! I owned the 7000 myself!

Oh well -
hey at least this means that there will be more the Sony chips available in the future for use by other companies as there'll be that much more material left over, so there shouldn't be such a wait when it comes to getting a camera like the Nikon D200 ready in numbers, right?

But, with KM leaving, does that mean they're also scrapping their film scanners too? I'm assuming yes.

6:02 pm - Thursday, January 19, 2006

#5 Asher

This is not bad news for consumers. There may be some good bargains on KM gears and Sony will be providing the support and honouring warranties, etc. Sony will then bring new cameras with compatible lens mount so there will be a migration path and news lenses.

Recently KM has been very slow with bringing new lenses to market and the 7D has been well overdue for a replacement.

6:45 pm - Thursday, January 19, 2006

#6 Marek

But the 1981 XGM keeps going on silver halide...it's sad to see an innovative company quite the scene, but they just didn't take digital seriously enough early on.

11:31 pm - Thursday, January 19, 2006

#7 Dario

I partly agree with Asher.
This anouncement does bring a certain fear to a consumer if they were planning to buy a KM DSLR. This may drive away some consumers and thus lowering the price of the system.

But I'm not sure if Sony would continue to push the KM system. It seems that Sony is a big enough company to just stick all the technology in a drawer, forget about it, and not worry about losing some money.

What I want to know is, what is this Olympus "suprize?"

-Dario

4:09 am - Friday, January 20, 2006

#8 nick in japan

Dario..I think the Olympus suprise is the announcement of Olympus and Panasonic getting in bed with each other to produce DSLRs. A few other manufacturers are assisting with production of components that will be compatible with the system called "Four Thirds". Alot of interesting news to start the new year off, sure hope someone comes up with a noiseless CMOS sensor for a compact... SOON!

11:54 am - Friday, January 20, 2006

#9 Badger

Perhaps we will be seeing Minolta by another name?

TOKYO: Sony Corp said it would aim for 20-25 per cent of the digital single lens reflex (SLR) camera market.

12:07 pm - Friday, January 20, 2006

#10 nick in japan

Personally, I would prefer the trend to escape from interchangeable lenses, and move more towards the non-removeable concept.. The technology is there but economics will dictate that lens makers, and others, get their piece of the pie, and we consumers will suffer. There is a suspicion by myself that progress is calculated to keep us all wanting more, when in actuality, it can be done now! Why produce a noiseless, Image stablized camera, with a fast lens that zooms from 24-240mm, with 2-3 gig internal memory, 16x9 aspect ratio CMOS, and adequate flash? Everyone would buy it and they would be happy , and alot of folks would be out of business!
I sure hope it gets better in the noise department! I think the first company that does it in the compact camera area will establish a firm foothold for the future!
Lottsa jockeying for position going on, gotta think Nikon and Canon will stay on top, unless Panasonic cleans up their "noise"... Kodak is lookin real good too!

12:44 pm - Friday, January 20, 2006

#11 Nicholas

I suspect that the Olympus "Surprise" is going to be a camera with their implementaion using Sony's R-1 chip ( just as almost every manufacturer did with Sony's F-828 8MP chip).

Nick in Japan is right, we are all on a treadmill reaching for the perfect camera.
Luck for us it is getting very intereting.

Regards, Nicholas

1:32 pm - Friday, January 20, 2006

#12 dawn

As a long-time Minolta film SLR owner, a current Sony prosumer owner and a hopeful future DSLR owner, this did shock me. I've been patiently waiting for KM and Sony to bring out their combined DSLR. Hopefully Sony will carry on the tradition of Minolta and bring us continued quality.

3:17 pm - Friday, January 20, 2006

#13 Zoltan

Shocking to see one of the Japanese big five go... Minolta has been renowned for a host of photographic inventions in the past four decades or more. Not to mention lots of great cameras and lots of great lenses. Sure Sony can make fine cameras too, but they just do not have the kind of photographic history that Minolta has.

3:33 pm - Friday, January 20, 2006

#14 nick in japan

IMHO, history and tradition has kept some of the Japanese companies in a rut! The future is gonna give us stuff that we can't even imagine now. The ultra sensitive sensor, that was just reported on, will change the entire way we look at ASA/ISO factors, as well as lens abilities. Kinda exciting being at this place,and time, in the history of photography/ imaging. Competition will get fierce, I'm sure. Cosina has been a company that has shown alot of progressive ideas, I'm anxious to see were they will fit into the puzzle.
Speaking of old technology, one of my favorite cameras in my collection is a Konica 1, from 1946.

4:06 pm - Friday, January 20, 2006

#15 Dario

I'm afraid for Olympus too; could they have the same fate?
I've always been fascinated by their cameras. I bought an E-300 before I returned it for an XT. The 4/3 is so small that it generates too much noise! I'm sure this will change in the future, though not on par with others; eg. Canon 5D.

But it's not really about whether or not their equipment is really great. Otherwise KM wouldn't have gone under so suddenly; from what I've heard their DSLRs were greatly designed.

4:14 pm - Friday, January 20, 2006

#16 Craig

I have to believe that all of this talk of failure in the market has some cultural significance in allowing Sony to look like the saviour of the system.

If it were two American companies involved I think we would be seeing a release touting the benefits of this new, stronger and healthier camera system benefiting by two top players in the field of photography and electronics.

Sony is gaining a coveted successful and established SLR camera system so that they can reap the maximum rewards possible from their CCD and CMOS technology.

KonicaMinolta is gaining a lot of Sony stock.

Users get a system that is maintained and possibly improved due to the partnership.

My only doubt is that the lens mount will maintain the mechanical connections that control focus and aperture control. A very expensive endeavor in this world of electronically controlled miniaturized motors. Maybe a second mount for just Sony lenses that uses the same bayonet but not the mechanics of the Maxxum/Dynax mount lenses.

-Craig

5:53 pm - Friday, January 20, 2006

#17 GARY POGODA

Man, are you people gullible !!! Konica Minolta purposely scheduled
their last day in the camera business for March 31, just so that they
could announce the next day, "April Fools !!!"

I am surprised nobody else saw through this hoax. :)

6:57 pm - Friday, January 20, 2006

#18 nick in japan

There was a huge rally scheduled in Tokyo for the protest of the dissolvement of KM, it was scheduled for this weekend. Invitations were sent to KM purchasers in 13 countries. unfortunately one supporter got the flu, and another, from London did too, and the remaining person, that really cared about it, didn't want to go alone, so it was cancelled!

11:55 pm - Friday, January 20, 2006

#19 Tor Weatherstone

Learning Konica Minolta is leaving the photo business is a sad thing. Both companies have delivered many epoch-making products over the years who has revolutionized the phot industry. It enough to mention build-in flash, autofocus, automatic film advance and more.
However,for those of us who have been following the market closely the last 2-3 years and have seen the development of digital imaging it should not come as a surprise though. Most photo divisions within Japanese companies is loosing money because of the tough price competition, and many models are OEM made as well. My prediction is there will be just 3 photo manufacturers left in Japan with in short time. To be honest, I'm not sure Olympus will be among them. They make the big money in other fields.

11:58 pm - Saturday, January 21, 2006

#20 Kevin Day

The loss of the Minolta name to photography is a great shame and it underlines the fact that large companies if they cannot make money will close a business.
Surely it will be Olympus next. We are heading for just Canon and Nikon in the serious end of the market - just watch!!
RIP Minolta !!!!!!!

12:17 am - Sunday, January 22, 2006

#21 nick in japan

Olympus has their fingers in alot of other optial venues, I dont see them failing, just a smaller nitch. I wish Sony had gone with a Pentax mount, I have alot of fairly good 6X7 lenses, and with the adapters available, the entire range of pentax is available. Telephoto work with the old Spotmatic bodies was very popular.

4:46 am - Sunday, January 22, 2006

#22 Tor Weatherstone

"Nick in Japan" don't have to wait long for a Pentax partner. Samsung is there already!
And that's how it ends up. Sony take care of Minolta, Panasonic will take over the 4:3 hegemony. If Olympus is not able to gain a reasonable profit in the compact camera field they will withdraw as well from that part of the market and let Panasonic take care of the SLR business.

It's difficult to predict the future, and
the rapid change from conventional, filmbased photography to digital has taken the industy by surprice. While photography has been around for more than 170 years it's a fact digital imaging in the form we know it today occured only 25 years ago and is still in it's childhood. The next 2-5 years will give us new products and combinations we even don't dream about.One of the big players will be multimedia, internet and softwarebased companies to bring this forward.

Of traditional Japanese photographic companies Canon, Nikon and Fuji are the most likely to survive in camerabusiness( because of their deversified industrial profile). Among the Japanes electronic based companies I will say Sony, Panasonic and Casio probably will be those to follow close in the future.

2:49 pm - Sunday, January 22, 2006

#23 Andrew

:vampire:

I'm glad KM are now part of the Sony family as I work for Sony and can now afford a decent Digital Camera - hurray!

5:56 pm - Thursday, September 7, 2006

#24 nick in japan

Andrew, am I reading your comment correctly in that sales increases due to the merge of KM with Sony have allowed your wages to increase, and, because Sony didn't give you an employee's discount on a purchase of a camera, you can now buy a Canon DSLR, or a Panasonic LX-2?
Congratulations! We are all awaiting the good news and your review!

10:41 pm - Thursday, September 7, 2006