Hiroshi Komiya, who heads the imaging systems division at Olympus Corp, is urging his staff to deliver the best possible quality and design for the company's new digital, single-lens reflex camera due to hit the market this autumn.

The product will be priced at just over 100,000 yen.

Poor sales forced Olympus to withdraw from the market for the film, single-lens reflex cameras in 2002. Komiya was one of the Olympus officials who made the decision to pull out of the market segment in the belief that consumers, who were buying mainly compact digital cameras at the time, would later develop more interest in digital, single-lens reflex models.

In autumn 2003, Olympus marketed such a camera called E-1, which cost over 200,000 yen. Canon Inc, meanwhile, became the first to sell a digital single-lens reflex model for a little more than 100,000 yen. The product called EOS Kiss Digital was followed by Nikon Corp's D70 model.

Olympus has yet to disclose the details about its new single-lens reflex camera due to be released this autumn but it will likely offer the popular features of the E-1, such as automatic removal of dust from the charge coupled device when lenses are being changed. Komiya claims the new camera will offer unique capabilities that will set it apart from Canon and Nikon products.

According to an estimate by the Camera & Imaging Products Association, shipments of digital, single-lens reflex cameras will jump 130% this year to some 2 million units worldwide. Canon expects the figure to be as high as 2.3 million.

While Olympus ranks third in the global market for such cameras, Pentax Corp, in eighth place, also marketed a model costing over 200,000 yen in autumn 2003. Pentax plans to launch cheaper products in the belief that cameras retailing for more than 200,000 yen cannot expect to reach a wide segment of consumers.

Pentax will likely distinguish its new camera from rival firms' products by making it more compact and lighter. The price could be as low as 100,000 yen, as it will be manufactured in the Philippines.

At both Olympus and Pentax, digital camera sales are rising in line with growth of the overall market. But most of their products are compact models, whose profit margins are being eroded by an ongoing price war.

Olympus saw its average product price drop to 31,000 yen in fiscal 2003, down 3,000 yen from a year earlier and the imaging systems division that makes digital cameras saw its profit slump 17%. Pentax's digital camera operations are believed to have broken even, but the company offset a 14% drop in the average product price by higher sales. Therefore, the success or failure of its higher-margin, single-lens reflex models will be crucial for the earnings performance of its camera business.

In the lower-priced digital, single-lens reflex camera market, Olympus and Pentax, both of which lag behind Canon and Nikon, still lead other manufacturers, such as Sony Corp and Matsushita Electric Industrial Co Ltd, because they have been in the camera business longer and, therefore, have better technological expertise and branding power. Both Olympus and Pentax aim for 10-20% of the global market for lower-priced single-lens reflex cameras.

Konica Minolta Holdings Inc is also betting its future on a similar camera it is due to release this autumn. As competition intensifies, Canon and Nikon might try to consolidate their dominance by introducing products costing well below 100,000 yen. The race continues for manufacturers to deliver ever cheaper and better cameras on to the market.

From NEAsia