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Konica Minolta to withdraw completely from the photographic business

Konica Minolta to withdraw completely from the photographic business - Assets for the photographic side of their business will be transferred to Sony who will continue to produce SLR cameras with the Minolta Dynax/Maxxum lens mount.

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Konica Minolta to withdraw completely from the photographic business
Press Release:
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 worlds first autofocus cameras. In 1962, our camera, well-accepted for its high reliability, boarded on the USs first manned spaceship Friendship 7. Also, ever since introduction of the worlds 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 todays 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 Japans first photographic paper in 1903, and Japans first color film in 1940, thus pioneering joy of photography for more than a century. In 1984, we introduced the worlds 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:

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 Sonys 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 todays 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 Please 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.

Personnel management
As a part of Konica Minolta Groups 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 Groups 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.

Ouline 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 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, injet 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

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Comments


mdpontin 10 6.0k Scotland
19 Jan 2006 1:59AM
A very sad day, although perhaps not entirely unforeseen.

At least existing users are not left completely stranded, and who knows, maybe Sony can expand market share for the Dynax system?

Doug

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Tonyd3 10 1.0k 15 United Kingdom
19 Jan 2006 2:33AM
Very sad day i had 3 minolta 9000's which apart from my current Digital Nikon D2x i regards as the best camera i ever had, the metering was superb.

I offer everyone in Minolta UK the very best for the future.
theorderingone 10 2.4k United Kingdom
19 Jan 2006 4:46AM
There is a thread in the forum discussing the implications of this news here
19 Jan 2006 4:47AM
Living in Buckinghamshire I wish everyone who will be leaving K-M at Milton Keynes, best regards for the future. I agree with the comment regarding the 9000 SLR being a fantastic camera (still going strong in my kitbag as well as the superb 7000). It is sad for the employee's, industry & fans like some of us here BUT I would say that Sony have my support to continue to do what they do well - manufacture great sensors - & now put them in future Minolta lens mount DSLR's. I can see a 15Meg K-M lens mount DSLR for a 800 price point before the end of '06... any bet's? Minolta is not dead, its just resting before embarking on a assured market top 3 position.
19 Jan 2006 5:18AM
Living in Buckinghamshire I wish everyone who will be leaving K-M at Milton Keynes, best regards for the future. I agree with the comment regarding the 9000 SLR being a fantastic camera (still going strong in my kitbag as well as the superb 7000). It is sad for the employee's, industry & fans like some of us here BUT I would say that Sony have my support to continue to do what they do well - manufacture great sensors - & now put them in future Minolta lens mount DSLR's. I can see a 15Meg K-M lens mount DSLR for a 800 price point before the end of '06... any bet's? Minolta is not dead, its just resting before embarking on a assured market top 3 position.
u08mcb 10 5.8k
19 Jan 2006 10:34AM
Sucks. I wonder what they will name these cameras now?
19 Jan 2006 10:47AM
Very sad news. My first 'real' camera was a Minolta SRT-101 SLR back in the early '70's
20 Jan 2006 1:55AM
My guess is that the Konica-Minolta name will soon become but a memory, once Sony have absorbed the brand successfully (or not).

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