Will Pentax exit Digital Camera Manufacturing?

On the 17th May 2006, three experts in Japanese equities in Tokyo gathered at the International Herald Tribune to discuss the stock market, the global competitiveness of Japanese companies, and trends to watch. Participants in the discussion, which was moderated by Miki Tanikawa, were: Robert Alan Feldman, chief economist, Morgan Stanley (Japan). Ryoji Musha, Vice Chairman, Deutsche Securities. Shuhei Abe, President and CEO, SPARX Asset Management

Interestingly, Shuhei Abe from SPRAX Asset management which holds a 21% stake in Pentax has this to say:

"Let me discuss Pentax, of which we hold 21 percent. Pentax is an optical technology company that is known for making single-reflex lenses. Japanese camera makers have their roots in lens making and optical technology. Leveraging its technological strength, Pentax has diversified into endoscopy, an area that Japanese companies monopolize. The neat thing about the endoscope business is that once you become a supplier, you have a lock on demand for parts replacement the same way copy machine makers benefit from continuing demand for, say, toner. The mistake that Pentax and other camera manufacturers made was in digital cameras, which as a business are not like cameras but more like home electronics, with short product cycles. It's not an efficient business for camera manufacturers to be in. We have been in talks with the Pentax management and have been suggesting that they exit from digital camera manufacturing. This also represents a new way of communicating and relating with the management as shareholders. There are lots of Japanese companies that can improve through an arrangement whereby shareholders, management and employees share in the benefits"



Source: International Herald Tribune