Canon Raised Profit Outlook For Full Year 2017

Having been a Canon user for over a quarter of a century and an observer of the company for years, this comes as no surprise since Canon is a well diversified firm and heads-and-shoulders over its other photographic competitors, including Sony and Nikon.


Japan's Canon Inc on Wednesday lifted its full-year operating profit forecast after reporting strong first-quarter results on the back of earnings from a medical equipment unit it bought from Toshiba Corp last year.

The camera and printer maker forecast profit of 270 billion yen ($2.43 billion), up from 255 billion yen estimated in January. It reported profit of 228.9 billion in the previous twelve months.

The upbeat outlook suggests Canon's strategy to diversify has begun to reward the company after the $5.8 billion acquisition of the Toshiba unit and the $2.8 billion takeover of Swedish video-surveillance firm Axis AB.

Canon also said the two existing businesses that have long dragged its earnings - laser printers and cameras - are also showing signs of bottoming out.

A recovery in the Chinese and other emerging economies is pushing up demand for laser printers, while continued popularity of so-called mirrorless cameras is driving camera sales, Executive Vice President and Chief Financial Officer Toshizo Tanaka said at an earnings briefing.

For the January-March quarter, Canon said operating profit jumped 88.8 percent to 75.67 billion yen from 40.09 billion yen a year earlier.

That was above a consensus estimate of 58.80 billion yen from six analysts surveyed by Thomson Reuters I/B/E/S.

Tanaka also said the company is not in a situation to consider joining the bidding for Toshiba's prized flash memory unit.

Toshiba wants to sell most or all of the unit, the world's second-largest NAND chip maker behind Samsung Electronics Co Ltd. It has narrowed bidders to SK Hynix Inc, Western Digital Corp, Broadcom Ltd and Hon Hai Precision Industry Co Ltd (Foxconn), people familiar with the process have told Reuters.

To keep the technology in Japan, however, the government is calling for domestic companies to join the bidding and team up with state-backed funds, sources have said.

CIPA Published 2016 Results and 2017 Outlook For Camera and Lens Sales

CIPA published their 2016 results and 2017 outlook for camera and lens shipments. Participating companies include Canon, Nikon, Sony, Sigma, Olympus, Casio, Panasonic Fujifilm, Ricoh, Tamron, Kenko, Tokina, Zeiss and Xacti.

• Total shipments decline 31.7% year on year; interchangeable lens camera shipments as percent of total shipments grow to 48%
• Shipments of interchangeable lens cameras contract 11.1% year on year
• Shipments of interchangeable lenses shrink 11.4%
• Total shipments (the cumulative total of shipments from January to December) of digital cameras in 2017 are projected to be 21.70 million units, a year-on-year decline of 10.3%.

Below is the detailed report :

2017 Outlook on the Shipment Forecast by Product-Type Concerning Cameras and Related Goods
The Camera & Imaging Products Association (CIPA, President: Hiroyuki Sasa) has announced the outlook on the shipment forecast by product-type concerning cameras and related goods for the 2017 term.

1. Track record of shipments 2016

Total shipments decline 31.7% year on year; interchangeable lens camera shipments as percent of total shipments grow to 48%

Total shipments of digital cameras in 2016 (the cumulative total of shipments from January to December) fell 31.7% year on year to 24.20 million units.

Since CIPA began compiling records in 1999, digital camera shipments recorded steady growth, surpassing 100 million units for the first time in 2007. However, shipments fell for the first time in 2009 due to the global recession. Although shipments returned to growth in 2010, they fell again in 2011 because of the serious impact on production from the Great East Japan Earthquake and flooding in Thailand. Since then, shipments have continued to decline, and experienced a year on year decrease of more than 30% in 2016.

The impact of the Kumamoto Earthquake in April, 2016 was not minor, causing the big factory of major digital camera parts to shut down its operation temporarily by the direct hit. However, shipments showed a remarkable recovery trend after the autumn when supply of the parts resumed. Based on this trend, 2017 is regarded as a promising year for the rebound of the industry, and for getting off a good start with keeping the pedal to the metal from the beginning of the year.

While the total shipments continued to fall, those of digital cameras with interchangeable lenses which are high-added-value and high-price products, are accounting for a greater and greater share of total shipments–––27% in 2013, 32% in 2014, 37% in 2015, and 48% in 2016, coming close to 50%. The industrial structure has changed.

Shipments of interchangeable lens cameras contract 11.1% year on year

Shipments of digital cameras with a built-in lens (so called compact digital cameras) declined 43.7% year on year to 12.60 million units.

Although shipments ended up being extremely weak, it cannot be stated definitely that the weak shipments reflected real ability when considering the influence of the Kumamoto Earthquake. We will hope for expansion, including new products of each company after this spring.

Shipments of digital cameras with interchangeable lenses fell 11.1% year on year to 11.60 million units. Shipments remained low, at about 70% of the previous year’s, immediately after the Kumamoto Earthquake, but they recovered by around 90% in autumn, reaching double-digit growth toward the end of the year, and total annual shipments also reached nearly 90% of the previous year’s.

Broken down by regions, shipments of digital cameras with built-in lenses to Japan contracted 31.6 % year on year, while shipments to regions outside of Japan fell 45.8%. As for shipments of digital cameras with interchangeable lenses, those to Japan shrank 21.2% year on year while those to regions outside of Japan declined 9.6%. Shipments of digital cameras with interchangeable lenses to regions outside of Japan are driving the recovery.

Digital cameras with built-in lenses have faced fierce competition with the smartphone. However, digital cameras with interchangeable lenses provide picture quality that is different from that of smartphones and demonstrate unrestricted expressiveness when combined with highly individualistic interchangeable lenses, and sales of these cameras remain firm.

On the other hand, with respect to smartphones, various statistics are published concerning the aspects that are different from those at the time when the smartphone made an incredible leap forward. We would like to keep a close eye on the trend of the product-type, whether it will be a favorable wind for digital cameras with a built-in lens, which produce images worthy of authentic cameras.

Models that propose fun that surpasses that by smartphones are being put into this product-type one after another, including 360-degree panorama or VR cameras, waterproof action cams, and cameras with high-magnification zoom lenses.

Shipments of interchangeable lenses shrink 11.4%

Digital cameras with interchangeable lenses are not only high-added-value products but also system products that demonstrate their full capabilities when used with interchangeable lenses.

Shipments of lenses for these cameras totaled 19.20 million units, a year-on-year decrease of 11.4%.
Although it was impossible to avoid a link with the sluggish production of digital cameras with interchangeable lenses, the paired body for those lenses, the previous trend, shipment volume about 1.6-1.7 times that of digital cameras with an interchangeable lens, has been maintained.

2. Outlook on shipments in 2017

Total shipments (the cumulative total of shipments from January to December) of digital cameras in 2017 are projected to be 21.70 million units, a year-on-year decline of 10.3%.

Broken down by product-type, shipments of digital cameras with built-in lenses are projected to be 10.50 million units (a year-on-year fall of 16.7%). Of those, shipments to Japan and those to regions outside of Japan are projected to be 1.80 million units (a year-on-year decrease of 18.2%) and 8.70 million units (a year-on-year decline of 15.5%), respectively. Shipments of digital cameras with an interchangeable lens are projected to be 11.20 million units (a year-on-year fall of 3.4%). Of those, shipments to Japan and those to regions outside of Japan are projected to be 1.20 million units (a year-on-year decline of 7.7%) and 10.00 million units (a year-on-year decrease of 2.9%), respectively.

Shipments of lenses for cameras with interchangeable lenses are projected to fall 6.2% year on year to 18.00 million units. Of those, shipments to Japan and those to regions outside of Japan are projected to decline 8.0% year on year to 2.30 million units and 6.0% year on year to 15.70 million units, respectively.

In addition to the step-up demand from users who have come to enjoy taking photos because of smartphones and want digital cameras, expectation for another step-up demand from the existing users of digital cameras who replace with or buy better digital cameras will remain high. Therefore, it is expected that demand for digital cameras with interchangeable lenses will remain firm compared to that for digital cameras with built-in lenses.

CIPA Data Shows Camera Sales Are Declining Again

It is probably the worst kept secret to anyone following the photographic industry but camera manufacturers have been experiencing declining sales for the last few years. The main reason is due to changing customer preference and the advancement in many smartphone cameras.

Canon, the largest photographic equipment manufacturer in the world has experience a drop in profits in their latest few quartera. They are hardly alone and based on data published by CIPA, the Japan-based Camera & Imaging Products Association, published the charts below illustrating the trend in camera sales over the past decade.

The latest CIPA (Camera & Imaging Products Association) numbers for the last 3 years are out. It indicates camera shipments of all types have increased slightly earlier in the year but is beginning to decline again. 2016 figures are in Orange, 2015 in Black, 2014 in Blue.

It seems mirrorless cameras offered the industry a bright spot for about two years but now sales are leveling off and the increase in sales may have been at the expense of the traditional DSLR market.
There is no question smartphones have taken away some sales from the low end point-and-shoot and DSLR camera segment, but the best way to keep a photographic company relevant is to come out with the state of the art product to convince serious photographers why it is still the traditional DSLR camera that takes the best photos. What is more important than the number of DSLR sold is the mix of the sales, since low end cameras like the Rebel and SL series bring considerably less profit than the higher models like the EOS-5 and EOS-1 bodies.

The Yen has started to 'weaken' against the U.S. Dollar and other currencies. This will present some tailwinds to companies like Canon, Sony and Nikon, which are major exporting firms, selling their products overseas. Nevertheless, Canon is expected to announce more products for 2017 and beyond. Read my earlier post on Canon's roadmap for the next few years.

CIPA Report Shows All Camera Sales Up Slightly

The latest CIPA (Camera & Imaging Products Association) numbers for data up to April 2016 are out. It indicates camera shipments of all types have increased slightly so far this year, but still down compared to previous years. 2016 figures are in Orange, 2015 in Black, 2014 in Blue.

The Yen has again 'strengthened' against the U.S. Dollar and other currencies even though the Japanese economy is in the doldrums. This will present headwinds to companies like Canon, Sony and Nikon, which are major exporting firms, selling their products overseas.

Nevertheless, Canon is expected to announce more products for the remainder of 2016. The long awaited, EOS-5D Mark IV is out for field testing, and should be announced some time in August, plus more EOS-M mirrorless cameras and lens are coming.

Canon #1 In DSLR and Compact Camera Sales 13 Years Straight

TOKYO, March 29, 2016 - Canon Inc. announced today that the Company’s interchangeable-lens digital cameras (digital SLR and compact-system cameras) have maintained the No. 1 share of the global market for 13 consecutive years from 2003 to 2015.

Canon, which develops the key components featured in its interchangeable-lens cameras - the CMOS image sensors, image processors and interchangeable lenses - employs these cutting-edge technologies across its entire product lineup, from entry-level models to professional-use flagship cameras. Through its robust product lineup that effectively responds to the needs of a wide range of users, Canon has continuously secured the top global share within the industry.

In 2003, the dawn of digital SLR cameras, Canon introduced its breakthrough EOS Kiss Digital (EOS Digital Rebel or EOS 300D Digital in other regions). This groundbreaking camera, which was competitively priced and featured a compact, lightweight design, captured the top share of the global market and set the stage for growth in the digital SLR market. Since that time, Canon has continued to launch a range of epoch-making products, including the professional-model EOS-1D series and the EOS 5D series which, equipped with a 35 mm full-frame sensor, paved the way for digital SLR video recording.

During 2015, Canon introduced an impressive lineup of new interchangeable-lens camera products that supported the Company’s achievement of a 13th consecutive year at the top of the global market. In June, the Company released the EOS 5Ds and 5Ds R digital SLR cameras, which realize the world’s highest pixel count with approximately 50.6-megapixel resolution; while in April the EOS 8000D (EOS Rebel T6s or EOS 760D) and EOS Kiss X8i (EOS Rebel T6i or EOS 750D) digital SLR cameras were released. Also, in March, Canon launched the EOS M3 compact-system camera.

Additionally, further bolstering Canon’s product lineup designed to meet the specific needs of a diverse user base, the Company announced in February this year the introduction of the EOS-1D X Mark II, capable of high-speed 14 frame-per-second continuous shooting, and the EOS 80D, which combines full-fledged still image-capture performance with exceptional movie-shooting operability. Also, the extensive EF lens-series lineup, production of which surpassed the 110 million unit mark in June 2015, currently comprises a total of 98 models and represents one of Canon’s biggest strengths, supporting the EOS series by enabling a wide array of shooting possibilities and rich expressive capabilities.

Through the further refining of its diverse imaging technologies, based on the Company’s core optical technologies, Canon will continue striving to create attractive and reliable products aimed at contributing to expanding the culture of photographic and video imaging.