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Imaging Products Business

As of December 12, 2014

Overview

Main Products

Digital cameras, film cameras, interchangeable lenses, speedlights, accessories, software, sport optics

Consolidated Financial Results

Net Sales

Net Sales for the year ended March, 2014 were 685.4 billion Yen.

Operating Income

Operating Income for the year ended March, 2014 was 64.2 billion Yen.

Market Conditions and Business Trends

The compact digital camera market is expected to continue to shrink. The Digital camera—Interchangeable Lens Type market is expected to make a recovery in the USA and emerging markets in Asia, etc., although conditions would continue to be severe in Europe and China.

Shipments of Digital Cameras

Shipment Units

Shipment Units in 2013 were 62.83 million units.

Shipment Amounts

Shipment Amounts in 2013 were 1,168.4 billion Yen.

  • Source: Camera & Imaging Products Association
  • *Shipment units=domestic shipment units+export units (member manufacturers only)
    Shipment amounts=domestic shipment amounts+export amounts (member manufacturers only)

Shipments of Digital Camera with Interchangeable Lens

Shipment Units

Shipment Units in 2013 were 17.13 million units.

Shipment Amounts

Shipment Amounts in 2013 were 678.2 billion Yen.

  • Source: Camera & Imaging Products Association
  • *Shipment units=domestic shipment units+export units (member manufacturers only)
    Shipment amounts=domestic shipment amounts+export amounts (member manufacturers only)

See Financial and Business Data for the First Half ended September 30, 2014 (November 6, 2014)

Sales volume of Nikon Digital imaging products (Sales & Forecast)

  • Digital Camera with Interchangeable Lens
  • Interchangeable lenses
  • Compact DSC

Business Strategy

Strategic direction

Imaging Products Business
Launch innovative new products.
Introduce new marketing strategy.
Gain more depth and new exposure in emerging markets.
Cut costs from development all the way through sales.

An Interview with the General Manager of Business Unit

In this challenging market environment, we find it is important to use flexible judgment and quick action to build up a string of successes. We will add new value by merging user enjoyment with the reliability of our technology and quality.

Nobuyoshi Gokyu
Senior Vice President
General Manager of Imaging Business Unit

Q1:Could you give us an overview of the first half of the fiscal year ending March 31, 2015?
A1:

In the first half of the fiscal year ending March 31, 2015, the market for interchangeable lens-type digital cameras was sluggish in both Europe and China, and the markets for compact digital cameras also continued to shrink. For that reason, our sales volume decreased compared to previous period.

Under such circumstances, in addition to our continuous cost reduction approach that we initiated in the previous year, our sale of digital SLR cameras, especially the mid-grade D7100 and the high-end and nearly professional-grade D810, was successful. This outcome improved the product mix toward mid/high-end models. In consequence, the operating profit ratio increased from 8.8% to 9.9% although overall income and profit deceased from the same period the previous year.

Q2:What initiatives lie ahead for the Imaging Business Unit?
A2:

We are working on three strategies to boost profits in the medium-to-long term.

The first strategy is to generate market activity by introducing innovative products. This may involve working with other companies. The second strategy is to exploit new marketing techniques to stimulate demand. One such technique is strengthening customer relationship management (CRM), a main point of CLM,* which focuses on the relationship between the customer and the product. With customer data accumulated over the past 10 years on the approximately 200 million items we have sold, we are setting up a system to effectively use this large amount of data to make timely suggestions to customers in purchasing either new products or replacements or adding lenses. We plan to come up with novel products based on an analysis of this data in the hopes of bringing in new customers. The third strategy is to entrench ourselves and to exploit our advantage in developing markets, which we view as strategic markets for business development. Along with China, our most important market, we are pursuing activities in the markets of India, ASEAN countries, Central and South America, and Africa. Our plan for China is to focus on its third- and fourth-tier cities, which are home to 500 million people, thus increasing our presence to win a larger share of the growing Chinese market.

We are reducing costs by scrutinizing the entire supply chain, probing the developments, procurements, and manufacturing of every section while building on the measures each has taken to date. Our ability to enhance profits has two wheels: expanding sales and improving cost competitiveness.

  • *CLM: Customer Lifecycle Management
    An approach using vast amounts of data and information technology to ascertain the "lifecycle" events of customers, such as new purchases, repairs, upgrading, or adding lenses, to prompt the timing of cross-sales or to make fuller contact through support services, for example, thereby enhancing purchases of Nikon products.
Q3:What can you tell us about Nikon's basic thinking on supply chain management?
A3:

The main issue is how to best manage inventory. Although we need to have enough items in stock for growing markets, we are basically aiming to keep our inventories down. To this end, we are moving to weekly planning of manufacturing and sales, which means quantifying trends in worldwide manufacturing and sales based on projected demand and shortening lead times between manufacturing and sales. Reducing inventory even further requires more finely tuned forecasts. By meticulously identifying locally embedded information and being sensitive as we collect it, we can deliver products better tailored to regional needs in a timely way with nothing wasted.

Q4:What is your medium-to-long-term vision for the Imaging Business Unit?
A4:

The imaging industry has the potential to change considerably, becoming more diverse and employing technologies that we cannot yet imagine. For us, such change in the market could translate to promising business opportunities. We have high-level technologies in optics and image processing, and we want to combine these technological strengths with the joy of sharing video and images once they have been taken to provide new value. Regarding the hardware itself, of course, we can still further adjust the basics of taking a picture, but we must focus on making the compact digital camera more distinct from the smartphone with such features as an ultra telephoto function or a waterproof design. Taking a photo is the first step, but how can we make it more fun after the picture has been snapped? How would I more fully enjoy photography? This is what we must think about at all times, incorporating trial and error to offer added value and meet diverse needs.

I think the Nikon brand represents reliability and, even more so, quality. Our goal is to determine how to raise awareness among many more customers of our reliability and to build a lasting appreciation of it over time. Though market conditions may be quite difficult, we are positive and enthusiastically want to offer a variety of products to satisfy our customers. I firmly believe that the road to our great success will be by communicating openly throughout the organization and using flexible judgment and quick action to build up a string of successes.