Finally some good news: Sony and Fujifilm report rising revenue from camera sales
posted Thursday, July 31, 2014 at 4:07 PM EDT
For the past couple of years, the digital camera market was on a downward slope in both sales and revenue generated. This could mainly be attributed to the rising use of smartphones and consequent drop in sales of compact cameras, but also partially to a saturation of the market in general. We reported multiple times on this topic, and in 2014 we've seen a partial rise in sales and revenue for the first time in years.
The most recent good news came from Olympus, and now it's Fujifilm and Sony who report that in the past fiscal year, both sales and earnings generated by their imaging businesses have risen. Again, it's pretty evident what this can be attributed to, namely both companies' orientation away from compact cameras and towards premium models, especially interchangeable-lens cameras.
In the case of Fujifilm, the annual fiscal report which was recently released states that revenue generated by the company's imaging division amounts to a total of JPY373.6bn, which is about US$3.6bn. This is a rise of 8% as compared to the previous fiscal year, amounting to JPY3.6bn (US$35m) in operating income. While that is technically not an awful lot of profit for a company such as Fujifilm, it's a stark improvement over previous years, in which its imaging business continually made losses.
In Sony's case, the situation of the imaging division wasn't as dire as that of Fujifilm in the previous fiscal year, but it's still good to hear that their income, as well, increased despite a decline in sales. While overall sales have dropped by 9%, the imaging division's operating income rose from JPY9.1bn in Q1 of the fiscal year 2013 to JPY17.4bn (US$169m) in Q1 of the fiscal year 2014. Once again, the drop in sales can be accredited to even lower demand for compact cameras.
While Sony doesn't explicitly state so, it is probably safe to assume that like the case with Fuji, the the focus on higher end camera models such as the new full-frame E-mount cameras or the RX10 helped Sony counteract the effect of the continuously shrinking compact camera market. In Fuji's case, it was the X-T1 and its X-series brethren that contributed most to the increase in revenue.
It's evident in the case of both Fujifilm and Sony, but also in that of Olympus on which we reported earlier, that the shift from lower-end to higher-end camera models showed the very effect that the companies had hoped for: an increase in revenue. With smartphone upgraders ready to pay a premium price for premium quality, even with overall lower sales, the camera makers can still drive home a nice profit, which ultimately helps keep their camera divisions alive.