Canon 2012 Annual Report Download - page 50

Strategy Business Units Management System FINANCIAL SECTION
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placed serious constraints on Canon’s 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
foreseeable future. Canon’s strategies to address these chal-
lenges include boosting the added value of products, pressing
forward with 100% internal production leveraging the econ-
omies of scale that come with being the industry leader, and
building an optimum cost structure to combat the pressures
that might return should the yen strengthen again.
The main recording media for digital camcorders has
become flash memory and the shift from SD to HD is ongo-
ing. The market for conventional camcorders has been
shrinking primarily because many popular devices include
a movie function. On the other hand, new categories like
web cameras and action cameras are emerging and expand-
ing. Canon aims to expand sales in this market with a robust
product lineup including higher added value based around
Canon’s distinctive high-definition, high-resolution technol-
ogies also found in Canon’s professional line. Canon plans to
expand lineup of “CINEMA EOS SYSTEM” in the business-use
digital video camcorder field. CINEMA EOS SYSTEM consists
of new interchangeable lens digital cinema camcorders, EF
Lenses and new EF Cinema Lenses. Canon is widely aiming
to solidify its top position in the motion picture production
market by introducing a new series of interchangeable lens
cinema camcorders and cinema lenses to the market not only
cinema but also broadcast, sports, documentary, etc. as the
CINEMA EOS SYSTEM.
In 2012, Canon experienced robust growth in the field
of projectors for business applications, and in particular
brighter, installation type projectors. In this installation mar-
ket, Canon launched the new install-type WUX5000, WX6000
and SX6000 with great success in 2012. Moving forward,
Canon expects to extend its competitive product lineup based
around the optical technology on which the company prides
itself, and push for expanded sales.
In the field of network cameras for industrial surveillance
and management applications, the fiscal year 2012 achieved
double-digit growth. The four HD-compatible products
Canon launched in the second half of 2011 have increased
the importance of mega-pixels and image analysis and also
achieved significant growth in terms of both units sold and
monetary amount.
In the broadcast TV lens market, gradual market expan-
sion has continued due to market growth in emerging
economies although demand arising from the switchover
to high-definition broadcast formats in developed countries
dropped off. Despite the economic slump in Europe, the slow-
down of exports to China and the progressive lowering of
equipment prices, Canon still has a large share of the TV lens
market with high value-added products. Canon’s success-
ful introduction in 2012 of a new field lens for international
level sporting events contributed to increased revenue.
In 2012, the consumer inkjet printer market declined com-
pared to 2011, due to a worldwide economic downturn and
competitor’s withdrawal from the business. Vendors intro-
duced new product functions which make it easy to print from
smartphone, tablet PC and the cloud computing environment,
as well as functions which improve operability for users.
Such vendors also expanded their lineup of products from
conventional home use to emerging market and business
area use.
The large-format inkjet printer market decreased slightly
in 2012 from the previous year, amid the situation of drop-
ping in capital spending caused by the downturn in the
European economy and the slowdown of the growth rate in
the Asian economy. In this environment, Canon was able to
increase sales of large-format inkjet printer units in 2012
compared to 2011. In the first quarter of 2012, Canon was
unable to supply enough units to the market primarily as
a result of supply delays caused by the floods in Thailand.
However, owing to a keen focus on recovering production
quickly, Canon has been able to exceed unit sales levels for
each quarter from the second quarter of 2012 compared
to the same quarter in the prior year. Because the overall
market declined in 2012, Canon was accordingly able to
increase its share of the market. Canon increased the unit
sales of large-format inkjet printers in part by launching
new products for the graphic art market and expanding
sales channels.
Industry and Others Business Unit
In fiscal 2012, the market for semiconductor lithography
equipment decreased approximately 30% from the previous
year. In the memory segment, equipment investment by chip
makers remained low primarily because supply continued to
outweigh demand. However, image sensor, logic device and
automotive device makers steadily increased their equipment
investments, drawn by the growing market for smartphones,
tablet PCs and hybrid cars. At the same time, some manufac-
turers started to invest in i-line steppers for small diameter
wafers used in power devices and LEDs, as well as for new
markets such as 3D mountings for silicon Via (TSV).
As a result, Canon’s shipments of semiconductor lithogra-
phy equipment in 2012 slightly decreased from the previous
year. Shipments for memory makers remained low while
i-line steppers for image sensor production enjoyed brisk
sales. In addition, Canon released new i-line stepper FPA-
3030i5+ suitable for the production of the green devices
such as LEDs and power devices, which currently occupies a
high share of automotive device and LEDs markets. Canon
also released new KrF stepper FPA-6300ES6a with greatly
improved productivity compared to conventional equipment.
In 2012, the market for FPD lithography equipment gen-
erally slowed because of a deterioration of panel makers’
earnings. Overall the market for 8th generation large-sized
panel production declined 60% from the previous year while