Konica Minolta 2004 Annual Report Download - page 9

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Q. What is your strategy for the strategic Optics business?
A. The home information appliances market continues to exhibit strong growth as products
such as liquid crystal display (LCD) TVs and digital cameras gain increasing acceptance.
Given these circumstances, Konica Minolta is well placed to maintain a top position on the
back of its unrivalled technical expertise, competitive advantage, and overwhelming share in
optical pick-up lenses. We will also secure a leading share in growth fields such as lens units
for digital cameras, lens and camera units for mobile phones, and micro lens units. In the
Optics business, where we anticipate the synergy benefits of integration will be most promi-
nent, we will maximize these synergy benefits, reinforce investment in facilities and personnel
with the aim of becoming the world’s leading optical device maker.
Q. Please outline your strategy for the Photo Imaging business, a field you have identi-
fied as requiring fundamental restructuring.
A. The silver halide photos sector faces harsh operating conditions impacted by the growth in
digital cameras. There are of course the die-hard fans of film cameras, however their numbers
remain fixed and there appears to be little hope for future growth. Under these circumstances,
we will review our strategies and create a profit-oriented business structure in development,
manufacture and marketing, even as the market shrinks, while also searching for new opportu-
nities in digital photo imaging, such as in net printing and inkjet paper. We will also pursue
development of the digital camera business, a market, which is attracting increasing attention
and wider acceptance as digital camera functions continue to evolve. Price, however, is a
major issue. Intense competition is placing significant downward pressure on prices. To offset
these difficult conditions, we implemented restructuring measures and consolidated our Group
film and camera businesses, integrating operations to Konica Minolta Photo Imaging, Inc.
While conducting comprehensive cost reductions, we will develop unique cameras leveraging
our unrivalled lens and anti-shake, superior auto-focusing technologies. Through these means,
we aim to restructure our Photo Imaging business and to secure a platform for sustainable profit.
Q. What benefits have you seen from the management integration and in which business
areas?
A. As we had first envisaged, the benefits to flow from management integration are most
noticeable in the Business Technologies and Optics businesses. In the Business Technologies
business we have successfully consolidated the development expertise of Konica and Minolta
and enhanced our product lineup. The impact on revenues from an overlap in sales networks
was of considerable concern to us, however, we have promptly addressed this issue and main-
tained the strengths of each companies’ marketing capabilities to the benefit of sales. I believe
this reflects the positive response by our overseas sales network and customers to the integra-
tion. On the earnings front, I believe the full-scale effects of our rationalization program will
emerge from and after April 2006. In our Optics business the signs of reinforcement to the
development function are just now coming to light. For example, the new organization has
been strengthened by the integration of the former Konica’s superior expertise in the field of
>
>Becoming the world’s
leading optical device
maker
Restructuring the Photo
Imaging business to
secure a platform for
sustainable profit