Sony to muscle into digital SLR camera market

Tokyo, Jun 6: Sony Corp. on Tuesday took the wraps off its first digital SLR, a high-end camera that uses interchangeable lenses, aiming to take on Canon Inc. and Nikon Corp. in the fastest-growing and most lucrative segment of the camera market.

Sony, which recently acquired the digital single-lens reflex assets of Konica Minolta Holdings, plans to launch its first SLR camera globally in July, and aims to grab at least 10 percent of the market in the business year to March 2007.

SLR cameras are generally more expensive and offer better performance than simple point-and-shoot compact models.

Sony is the world's second-largest digital camera maker behind Canon but all of its business has come from selling compact models, having lacked the history selling interchangeable lenses for film SLRs to warrant a push into digital SLRs.

Not having a digital SLR in its line-up has been a weak point for Sony as SLR cameras yield fatter profit margins than compact cameras, which are much easier to make and under intense price pressure due to an influx of low-cost makers.

Sony expects its digital SLR camera to sell for about 100,000 yen (0) in Japan for the body only, and about 120,000 yen for a kit that includes the body and a lens.

That would put Sony's product at the lower-end of the digital SLR market but at the same time make it pricier than entry-level models from rivals Canon, Nikon, Pentax Corp. and Olympus Corp that sell for under 100,000 yen.

Macqaurie Securities analyst Damian Thong said Canon and Nikon are unlikely to lose much sleep over Sony's entry into the high-end digital camera market.

''I do not see this as a huge threat to the core business of Nikon and Canon, historically, which is amongst the professional photographers as well as advanced amateurs.'' He said Sony could find success in gaining support among those consumers that are new to digital SLRs, and therefore not tied by brand loyalty or other factors to Nikon and Canon.

''So the key focus for them is to target people upgrading to entry-level SLRs, which increasingly is where the growth is. I think that will be the core of their strategy.''

CROWDING MARKET

In calendar 2005, Canon held a 53.3 percent share in the global digital SLR market, followed by Nikon with 28.3 percent, according to research firm IDC. In the overall digital camera market, Canon had a 17.2 percent share and Sony 15.0 percent.

''When people talk about camera makers, Sony's name does not pop up very often. This is very regrettable.'' Sony corporate executive officer Yutaka Nakagawa told a news conference.

''With the help of the upcoming launch of a single lens reflex camera, which we have very much longed for, we want to build up a position as a leading camera maker.'' Sony aims to ship 80,000 units of its digital SLR cameras a month initially. In April it forecast it would ship 15.5 million units of its compact digital cameras in the year to March 2007, up from 13.5 million a year earlier.

The new digital SLR camera has an anti-shake mechanism built inside the body of the camera, meaning the function to avoid fuzzy pictures works on any interchangeable lenses compatible with the machine.

''Offering a camera that makes it possible for anybody to take a nice picture. That's what we are going after,'' Nakagawa said.

Sony purchased a portion of Konica Minolta's SLR business earlier this year to enable its push into the market.

Sony's cameras will be based on Konica Minolta's Maxxum/Dynax mount system, meaning that existing owners of those lenses -- Konica Minolta sold about 16 million lenses over the years -- will be able to use them on Sony's SLR.

On top of those existing lenses, Sony will offer six types of new lenses at the time of the camera's domestic launch on July 21 and plans to boost the number to 21 by the end of the year, including three Carl Zeiss lenses.

Another Japanese consumer electronics giant Matsushita Electric Industrial Co. Ltd., maker of Panasonic brand electronics, also plans to introduce its first digital SLR camera this year, gradually crowding the market.

Following the early afternoon announcement, shares of Sony closed down 1.5 percent at 5,110 yen, slightly outperforming the Tokyo stock market's electrical machinery index IELEC, which slid 1.76 percent.

REUTERS