Matsushita Electric Industrial Co. and Olympus Corp. said on Thursday they will jointly develop technologies and devices for digital SLR cameras, a high-end segment of the market poised for strong growth.
The Japanese companies will work together to create technologies and key components based on an industry standard supported by Olympus, Matsushita, Eastman Kodak and others, though they will develop finished products on their own.
Digital single lens reflex (SLR) cameras are high-performance models with interchangeable lenses and more advanced features than simple "point and shoot" cameras. Nikon Corp. and Canon Inc. dominate the digital SLR market.
Matsushita said it planned to develop a digital SLR and sell it under its own brands, which include Panasonic, expanding its product lineup beyond compact models and helping it achieve its goal of having 10 percent of the global digital camera market in two years. "Launching a digital SLR will do much to strengthen our brand in the digital camera market," Fumio Ohtsubo, senior managing director at Matsushita, told a news conference.
Matsushita, a relatively small player commanding some 3 percent of the global digital camera market, said it would introduce a new digital SLR at the Photo Marketing Association (PMA) convention in the U.S. in February 2006. Olympus also plans to show off a product incorporating their joint efforts at PMA.
The alliance comes as Olympus and other digital camera makers struggle to make money in the $24 billion market, mainly because of intense price competition in compact models and short product life cycles, which have boosted development costs.
Olympus, the world's third-largest vendor of digital cameras after Sony Corp. and Canon, expects its camera division to show an 18 billion yen loss this business year as it disposes of excess inventory and copes with steep price falls.
When asked if there was a chance the partnership would expand into compact cameras, Hirohide Matsushita, group executive director of Olympus Imaging Corp's marketing division said: "We will do our best on our own. That is all I can say at this time."
Matsushita, which vies with Sony for the title of world's biggest consumer electronics maker, is a latecomer to the digital camera market but has been gaining traction thanks to strong sales of recently launched compact models featuring image stabilisation technology that compensates for hand shake.
Ohtsubo told reporters on the sidelines of the news conference that Matsushita would aim to sell about 4 million digital cameras in the next business year starting April 1, double the 2 million units it sees for the current year.
Matsushita is also strong in charge-coupled devices (CCDs), image-capturing semiconductors used in digital cameras and video cameras, and in the development of thin and very small cameras -- an area where Olympus has lagged.
For its part, Olympus has lens and other technologies honed during its long history in the camera business, and has enjoyed brisk sales of a digital SLR launched in December that uses ultrasonic technology to remove dust from the CCD.
Under the agreement, Matsushita and Olympus said jointly developed devices would be based on the "Four Thirds System", an open standard that specifies the size of the image sensor and lens mount, ensuring compatibility of lenses between products. Four Thirds was established by Olympus and Eastman Kodak in 2002. Other supporters are Fuji Photo Film, Sanyo Electric and Sigma Corp.
Matsushita and Olympus issued a forecast for the global digital SLR market, predicting that sales would double to 2.7 million cameras in the current fiscal year to March 31 and climb 67 percent to 4.5 million in the following year.