Samsung to Boost Pentax Partnership

Park Sang-jin, center, CEO of Samsung Digital Imaging, and models pose in front of Samsung’s new cameras at a press event held in Samsung Electronics’ headquarters in Seocho-dong, southern Seoul, Tuesday.

/ Courtesy of Samsung Electronics

By Kim Yoo-chul
Staff Reporter

Samsung Digital Imaging (SDI), a camera-producing affiliate of Samsung Electronics, Tuesday denied the possibility of an M&A deal for further external growth in the camera business.

The company is competing with Japanese makers such as Canon, Sony and Nikon. It is currently the world's No. 3 maker of compact cameras.

The affiliate, however, is planning to strengthen a partnership with Japan's Pentax in a bid to sharpen lens and photo-related chips ― key components for enhancing camera capabilities.

"Amid the global recession, the time is not ripe to push an M&A deal," Park Sang-jin, chief executive of the company said in a press conference at an event to unveil new camera models held in Samsung's headquarter, Seocho-dong, southern Seoul.

"Samsung Digital Imaging has made much progress in the development of lens and image processing chips, independently," Park added.

"We have already secured complementary metal-oxide semiconductor (CMOS) technologies to handle more data volume," according to the executive.

Citing a solid partnership with the Japanese camera maker, the executive said Samsung and Pentax have also been engaged in additional talks to expand this mutual partnership.

"Further details over the Samsung-Pentax partnership in the digital single lens reflex (DSLR) camera category will be unveiled, soon," Park said.

Samsung is lagging competitiveness behind Japanese camera makers in the DSLR camera market, which is gaining in popularity and is more profitable than the compact camera segment.

By riding on Samsung Electronics' solid distribution channels in developed markets, the camera unit is aiming to increase its global market share in compact cameras to 12.5 percent in 2009 from 10.4 percent in 2008.

"Camera shipments by SDI in the first quarter will rise 12 percent year-on-year as the unit is selling the products using Samsung Electronics' solid outlet channels in China, India and South America," Kim Do-han, an analyst at Samsung Securities said.

Also the affiliate, which separated from Samsung Techwin and is 33 percent-owned by Samsung Electronics, is set to boost its digital imaging product sales to five trillion won or some $3.6 billion by 2012.

Camera sales in 2008 were worth two trillion won, according to the company.

SDI is developing a high-end hybrid model, which would feature the small body of a compact camera with exchangeable lenses.

"An internal partnership with Samsung Electronics in development, marketing and design will help us boost our global share. Premium products are another card for a bigger share," Park said.

Samsung Electronics has steadily been increasing its budget on the camera business as the consumer electronics maker hopes to make it its next growth engine, analysts say.

"The camera business won't bear immediate profits. But Samsung will never give up the segment as it needs more consumer gadgets that consume memory and NAND flash chips," Park Young-joo, an analyst at Woori Investment said.

Samsung Electronics is the world's biggest producer of DRAMs and NAND chips. DRAMs are used in traditional PCs, while NAND chips go into high-end portable devices such as MP3 players and digital cameras.

But some say camera makers appear to have reached a crossroads as they are finding their earnings power weakening rapidly.

"That's why compact camera makers are now competing with innovative functions after the competition for higher resolution that expanded the digital camera market to this point reached its limit," said a high-ranking industry source.

yckim@koreatimes.co.kr

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