Superb article in the latest Forbes.
Someone please comment on the following:
Sanyo this fall will introduce a new kind of compact magneto-optical storage device that will cost only a sixth as much as the flash memories now used; it will have ten times the capacity--enough to hold over 500 pictures at highresolution.
forbes.com
That digital camera in your future is likely a Sanyo. Photo Finish
By Benjamin Fulford
THE CONTEST TO DOMINATE THE exploding market for digital cameras involved billions of dollars in investment and pitted a dozen of the world's top corporations against one another. Now, just as sales of digital cameras are on the verge of surpassing those of film cameras, a winner has emerged. The prize does not go to Sony or Fuji or Kodak, but Sanyo. The unheralded Japanese maker, usually associated with clock radios and cheap rice-cookers, has taken at least a 40% share of a $3 billion market that is growing at a rate of 60% a year.
The man behind this dark-horse victory is Hiroshi Ono, head of Sanyo's Video Imaging Systems division. Utterly defeated in a campaign to wrest the videocamera market from mighty Panasonic and Sony in 1995, Ono found himself with an army of digital image engineers who had nothing to do. He decided to charge into the digital camera market that had just begun to take off.
Realizing that Sanyo's brand image problem would spell defeat in the new battle as well, Sanyo lifer Ono, 57, approached Japan's venerable camera makers with a proposal to make cameras for them. It worked beyond expectations. Consumers prefer to buy an Olympus or Nikon brand-name camera even though what is essentially the same device, with extra features such as the ability to record moving pictures, can be bought at a similar or lower price under the Sanyo brand name.
Ono's strategy: Get the economics of scale now and worry about the Sanyo brand later. By selling under other names Sanyo has been able to finance the research and development and factory investment it needs for sophisticated output. "Digital cameras are basically a lump of semiconductors, so market share is very important," Ono says.
This year, as new semiconductor plants come on line, digital cameras are expected to pass the 4-million-pixel threshold. That will mean pictures good enough to be hardly distinguishable from those taken with film, even when blown up to poster size. By 2002 or 2003, Ono predicts digital cameras will overtake film in resolution. It will take another couple of years beyond that to match film's "latitude," the feeling of depth in the pictures, he added. At that point, he says, the alliance with the camera companies will mean extra benefits, as lens quality becomes more important
Sanyo this fall will introduce a new kind of compact magneto-optical storage device that will cost only a sixth as much as the flash memories now used; it will have ten times the capacity--enough to hold over 500 pictures at highresolution. At $20 per 730-megabyte disk, you'll pay about 3 cents to store a picture, making digital storage far cheaper than film. The cameras have the added advantage that they can be plugged into your computer or mobile phone. You'll be able to call that snapshot to Grandma straight from Old Faithful. These cameras also can double as audio recorders.
The improved quality means more than 10 million digital cameras, almost all made in Japan (Polaroid is making its in Taiwan), will be sold worldwide next year, compared with 5.4 million sold in 1999 and 7.5 million this year. In Japan digital cameras will outsell film cameras for the first time ever in 2001, while in North America this will happen in 2002, Ono says, adding, "Film cameras are likely to disappear by 2005, or 2010 at the latest."
Sanyo's surprise victory in digital cameras is just one of several recent successes by an underrated company. Sanyo's poor brand and market image dates back to 1950, when the company was started up by the brother-in-law of Konosuke Matsushita, founder of Matsushita. In order to sell its products then, it resorted to discount pricing, creating a cheap image that lingers today. In fact, Sanyo is the number two TV brand in the U.S., world class in lithium ion batteries, a growing power in mobile phones and a leader in display technology. Its stagnating white goods division is also being restructured and, in a repeat of the camera strategy, Sanyo will begin making household appliances for Maytag.
With a market capitalization of $7.4 billion, less than half its projected $17.6 revenues, Sanyo doesn't trade like a tech giant. Although its profit in the year to March should be a meager $65 million, there's a way that could perk up quickly. A Sanyo spokesman says it will shrink its work force by 6,000 employees, or 10%, by March 2002. |
