Canon 2011 Annual Report Download - page 54

52 F I N A N C I A L S E C T I O N >F I N A N C I A L O V E R V I E W
lization function, so as to expand sales and market share.
Overall, the compact digital camera market shrank year-on-
year due to the ongoing economic stagnation in the developed
world, but there was considerable growth led by Southeast
Asia and other emerging markets. Notwithstanding the Great
East Japan Earthquake and collateral events, as well as the
floods in Thailand, Canon managed to maintain a high mar-
ket share consistent with that of the previous fiscal year. The
size of the compact digital camera market in 2012 is expected
to be consistent with that of the previous fiscal year in the
developed world, while positive growth is expected to con-
tinue in emerging markets, adding up to a slight expansion in
market size worldwide.
In the digital camera market, Canon faced intense price
competition. This combined with the value of the yen
remaining at historical highs throughout the year, placed
serious constraints on our profit margins. Throughout the
industry, there has been a strong tendency toward reliance
on EMS (electronic manufacturing services), and intense
price competition is expected to continue for the foresee-
able future. Canon’s strategies to address these challenges
include boosting the added value of products, pressing for-
ward with 100% internal production leveraging the
economies of scale that come with being the industry
leader, and building an optimum cost structure to combat
the pressures of the strong yen.
In the digital video camcorder market, there was at one
point rapid diversification on a global scale of recording
media such as DVD, HDD and flash memory. During fiscal
year 2011, it became clear that flash memory was becoming
the dominant format, and that the move toward high defini-
tion would continue to progress. Despite the global economic
stagnation that began in the second half of 2008, the markets
for HD and flash memory have continued to grow steadily
year-on-year. At the same time, in the North American mar-
ket and elsewhere, a new product category, web cameras
priced at under $200, has emerged, and sales of such cameras
have been increasing. Canon will aim to expand sales in this
market with a powerful product lineup including higher
added value based around our distinctive high-definition,
high-resolution technologies.
In the business-use digital video camcorder field, Canon
announced its full-fledged entry into digital high-resolution
motion picture production by launching !Cinema EOS
System,"which consists of new interchangeable lens digital
cinema camcorders. EOS Movie has rapidly expanded the
demand for interchangeable lens digital cameras in the digital
cinema market. By introducing a new series of interchangeable
lens cinema camcorders and cinema lenses to the market as
the !Cinema EOS System,"Canon is aiming to solidify its top
position in the motion picture production market.
In 2011, we experienced robust growth in the field of pro-
jectors for business applications, and in particular the
transition to wide format. In this wide-format market, we
launched the new install-type WUX4000 prior with great suc-
cess in 2011. Moving forward, Canon expects to extend its
competitive product lineup based around the optical technol-
ogy on which the company prides itself, and push for
expanded sales.
In the field of network cameras for video surveillance and
monitoring applications, the fiscal year 2011 showed double-
digit growth compared to 2010. In the second half of 2011,
Canon introduced four HD-compatible models to the market,
building on improvements in image resolution and image
analysis technology and industry-wide action command stan-
dardization. As a result, Canon achieved double-digit
year-on-year growth in terms of both units sold and monetary
amount in 2011.
There was gradual recovery overall in the broadcast TV
lens market. While specialized demand due to digitalization
of broadcast formats, and market growth in emerging
economies, contributed to increased revenue, the persistently
strong yen and the progressive lowering of equipment prices
accompanying downsizing meant that profits in 2011 were
nearly flat year-on-year. From 2012 onward, while specialized
demand is expected to drop off due to the switchover to digi-
tal broadcasting in developed countries, continued market
growth in emerging markets means that the overall global
market is expected to show gradual expansion.
In 2011, the inkjet printer market was declined slightly
compared to 2010 due primarily to downward pressure by
the economic stagnation in Europe and other regions, as well
as the effect of the Great East Japan Earthquake and the
floods in Thailand. Vendors expanded their lineup of prod-
ucts to meet increased demands for cloud solutions and
wireless networking functions in this market. In response,
Canon enhanced its lineup introducing new models which
make printer operation more user-friendly for diversified
users. With an advanced printer lineup, Canon expanded its
unit sales and its consumables excluding adverse affects from
currency fluctuations compared to 2010.
In 2011, the Canon inkjet printer business was adversely
affected both in terms of sales and production by the Great
East Japan Earthquake and collateral events, as well as the
floods in Thailand. Canon was able to limit the affect from
the earthquake by implementing expediting recovery
actions. In addition, although some factories were forced to
close operations as a result of the floods in Thailand, Canon
has taken prompt measures to switch production to other
factories and implemented recovery measures to restore
affected factories. Owing to the swift actions, production at
the damaged facilities was resumed within the year.
Industry and Others Business Unit
In fiscal 2011, the semiconductor device market continued to
recover strongly from the economic downturn which began
in the second half of fiscal 2008. There were noteworthy
improvements for semiconductor device market categories
such as NAND-flash memories and image sensors, due to
strong sales of smartphones and media tablets, as well as the
so-called !green"products such LEDs and power devices
attracting attention in the environment-related fields. This
was partially offset by the fact that DRAM makers tended to
reduce equipment procurements in 2011 due to the continu-