Ricoh is withdrawing from the optical disc drive business, citing price competition and declining sales in Japan, and internationally, as reasons. The company now thinks it cannot make a profit in the optical disc business, according to spokesman Satoshi Aoki. "I guess you could say it was the drop in prices, and the arrival of new makers," he said.

The company has reported that its net income for the first six months fell 15.2% to ?35.8bn as of 30 September compared with last year, on sales of ?876bn, down 1.4% on the same period last year.

Decreased sales of optical discs together with the appreciation of the Japanese yen accounted for a 7.4% in overseas sales, the company said.

The company also predicted a 7.4% drop in its net income to ?85bn for the full year to 31 March 2005.

As well as refocusing on strengthening its main printer and office automation business, Ricoh will continue to produce CDs and DVDs and is now looking at next-generation optical storage technologies.

The company is now considering whether it will develop components and or discs for either the next-generation HD-DVD (High Definition/High Density-DVD) or Blu-ray Disc formats, Aoki said.