Matsushita Electric Challenges Leaders in SLR Cameras

"Even if we achieve modest success in digital home appliances, where the pace of technological progress is so rapid, we could lose our lead at any time," explained a spokesperson for Matsushita Electric Industrial Co, Ltd of Japan. "Now that we've achieved a degree of success in compact cameras, we think it's time to build a powerful brand name in the field."
Matsushita, buoyed by the success of its DMC-FX7 compact camera with optical wobble-correction mechanism, plans to ship single-lens reflex (SLR) digital cameras with interchangeable lenses in 2006. The cameras will comply with the "four thirds system" mounting standard pushed by Olympus Optical Co, Ltd of Japan, and the firms will jointly develop products and key components.

The digital SLR market is currently dominated by name-brand firms Canon Inc of Japan and Nikon Corp of Japan. Between them, these two companies commanded 60% of the Japan market as of December 2004, by volume (see Fig). Much of the reason for their current position is the strong demand by users who want to use the interchangeable lenses from their older silver nitrate film cameras in new digital cameras.

Matsushita's move to challenge these established market leaders is being made by releasing a flagship product: a digital SLR camera, which it is hoped will provide a major boost to the firm's digital camera business. According to Nikkei Market Access, the company's global shipments for digital cameras in 2004 reached only 3% by volume.

Development Speed

There are two key reasons why Matsushita decided to enter the digital SLR market. The first is that consumers who either don't own silver nitrate film SLRs or don't use them are likely to make up the majority of demand for digital SLRs in the future. It is expected that this type of user will be less likely to need cameras capable of using their existing interchangeable lenses.

The second reason is that with the four thirds system and the proprietary high-density packaging technology used in the DMC-FX7, Matsushita believes it will be able to produce bodies and lenses smaller than those used on silver nitrate cameras. In fact, many engineers in the field agree that the four thirds system is technically superior for use in compact digital SLRs. For Matsushita, the lack of compatibility with legacy interchangeable lenses does not represent any obstacle to its entry into the field.

The development effort required to enter the digital SLR field was very short - less than a year. As a source at the firm pointed out, though, "Speed is essential to success in the digital appliance market. With the assistance of Olympus Optical we will make full use of our accumulated technical resources."

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