Nikon Corp, Japan's sixth-biggest digital camera seller, said it will beat its forecast for digital camera sales by as much as 18 percent this business year on better-than-expected demand.
Digital camera sales will total between 3.2 million and 3.3 million units in the year ending March 31, up from its November forecast of 2.8 million, Nikon spokesman Yasuhiro Katagiri said in an interview, without providing monetary details.
Makers of digital cameras including Sony Corp benefited from consumers' appetite to replace their film-based cameras. The market is dominated by Japanese companies because they develop the products with Japanese chipmakers, which have core technology for digital camera components.
"Japan has the market," said Hiroyasu Sato, an analyst at Daiwa Institute of Research Ltd, who has a "neutral" rating on Nikon's stock. "Production capacity determines who the winners are because they can sell all they make."
Digital camera sales in Japan and exports from the country, which Sato estimates has 90 percent of global sales, rose 66 percent to 24.6 million units last year, according to the Camera & Imaging Products Association. For this year, Sato estimates sales of more than 30 million units.
Nikon targets selling 4.5 million to 5 million digital cameras in the next business year, he added. To match surging demand, the company is building a plant in China. Nikon Imaging China will start operating in April with annual output of 400,000 digital cameras. In two or three years, the factory is expected to make 2 million units.
Taiwan is the only country besides Japan that last year had digital camera makers, including Premier Image Technology Corp (普立爾科技), Sato said. Other electronics makers, including South Korea's Samsung Electronics Co, may enter the market this year, he added.
"The most important thing for Japanese manufacturers is not to leak their technology for chips and lenses to foreign rivals," Sato said. "That's the core technology Japanese companies now keep for themselves."
For example, charged couple devices, semiconductors that capture images in digital cameras and camcorders, are produced only by Japanese companies such as Sony, Sharp Corp and Sanyo Electric Co.
The market for camera lenses is also "pretty much dominated by Japanese camera makers" such as Canon Inc, Nikon, Hoya Corp and Fuji Film Co, Sato said. Premier Image and Eastman Kodak Co also make lenses.
Nikon, which makes film-based cameras, semiconductor-making equipment and microscopes, will not revise its earnings forecast for the year ending March 31 because sales of steppers -- machines that print circuitry onto silicon wafers -- will miss its November forecast, offsetting higher sales of digital cameras, Nikon's Katagiri said.
Nikon forecasts it will break even this business year, rebounding from a ¥3.5 billion net loss a year ago. Sales will probably fall 0.6 percent to ¥480 billion.
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