Why Ricoh acquired Pentax? – New Mirrorless Cameras on the Way?

July 1, 2011

Ricoh acquired HOYA’s Pentax as a business move to expand its reach into the digital SLR market.  According to an article on bjp-online.comRicoh has bought Pentax’ digital imaging division for ¥10b ($124.2m / £77m / €85m). Pentax is owned by Hoya. This comes as a surprise for some people because in 2007 Hoya bought Pentax for ten times the price it is being sold right now (¥100b). I must admit that this acquisition is quite confusing. First of all, Ricoh already has its GXR camera system with interchangeable units. The Pentax Q that was recently released is actually a direct competitor to the GXR system. I guess that Ricoh and Pentax have their business meetings prior to Pentax launching the Q cameras. If that’s true, how come Ricoh has decided to jump into a position that it has to financially support two competitive products?

Although I don’t have an answer for the above question, I can understand why Ricoh has decided to acquire Pentax. First of all, it seems that Ricoh had an opportunity to purchase Pentax for a relatively low price. Second, Ricoh hasn’t successfully managed to make a stamp in the mirrorless camera’s market with its GXR camera system. Third, Ricoh wants to enter the mirrorless market and also wants to grab some market share in the digital SLR market.

The digital SLR market is important for Ricoh for a few reasons. First of all, Ricoh understands that they should build a line of cameras which people can grow up into. When people by a mirrorless camera, some of them want to be able to upgrade in the future to a more professional model. It doesn’t necessarily mean to upgrade to a digital SLR, but its all about branding. More exposure for one market segment can elevate sells for another product segment. So if, for example, Ricoh mirrorless cameras become successful, it will help Ricoh sell more digital SLR cameras as well Another reason is related to technology. If I am guessing it right, Ricoh will use Pentax technologies for both the digital SLR cameras and the mirrorless cameras as well By doing so, Ricoh can actually cut out on costs and deliver more products that cheaper and cover more market segments.

That brings me to the Japanese camera market segment. Ricoh is a Japanese company. It understands the Japanese market pretty well. According to what I’ve read on various photography news websites, Ricoh also wants to make complementary products that are technology related to current products that Ricoh manufactures, including expertise in printers. Pentax is a popular brand in Japan. That can help Ricoh start expanding its reach in the Asian market. Building a brand from scratch takes a lot of time and funding. By acquiring Pentax, Ricoh hopes to bring new innovative products to the photography market in just a few months (I assume).

By having some knowledge about the digital camera market, my assumption is that Ricoh wants to enter the Mirror less camera’s market. However, not in the same way it did with the Ricoh GXR interchangeable unit’s system, but with a large sensor based cameras. Ricoh knows that there isn’t any technology that can make small sensors reach the final image quality that APS-C and Micro Four Thirds sensor produce. Even BSI (Backside-Illuminated ) sensors just couldn’t give the superior image quality that DSLR cameras produce.

If I am reading their business map correctly, they will introduce a new line of mirrorless cameras. Interchangeable lens cameras (MILC) that take advantage of a much larger sensor (compared to the Pentax Q and Ricoh GXR). The question that still remains whether Ricoh will just shut down one or both of its current mirrorless camera models lineup. It can just financially support three types of mirrorless camera’s models. Even if it can, it’s a bad business decision. Ricoh should invest in only one line of mirrorless cameras, and do the best it can to answer the market demands.

According to an article on Reuters, Ricoh is competing against Xerox Corp and Canon Inc in printing and imaging solution market. We can also understand that in the future, home printers will become more popular as the digital photography market evolves.  That’s already gives Canon and edge because Canon has built a very popular camera brand and it certainly helps Canon sell more printers worldwide. I assume that Ricoh understand the need to expand its product to the enthusiast photographer’s market in order to expand its business and elevate sells in the printer’s division.

Source: Ricoh press release

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