Konica Minolta today stunned the industry by announcing that it will be exiting the camera business. Unlike Nikon, which announced just a week ago that they were exiting most of the camera market, Konica's exit is complete. The company will withdraw from both film and digital camera market. In addition, Konica will also exit the camera film business. Sony will acquire Konica's camera technology and will also provide service and support to existing customers.

Over the past year, Konica Minolta's camera business was pummeled by inexpensive digital SLRs from the likes of Canon and Nikon. Some of Konica's high-end consumer cameras compared favorably with professional cameras. For example, the "Dimage" series had body-integrated anti-shake technology, high-resolution LCD monitor and could shoot up to seven frames a second.

Konica Minolta said that it will now focus on their traditional and most profitible business of high-end copiers and fax machines. Analysts reacted in a postive way to the announcement: "Withdrawing from the camera and photo-processing businesses is positive as it allows the company to better focus resources on office equipment," said Nobuhito Owaki, a Nomura Securities analyst in a conversation with Bloomberg.

Konica Minolta's exit may have been foretold by the firm's announcement last November which included a departure from the low-end of the camera arket. But a shift towards the increasingly competitive higher-end market may have come too late.

Current Konica Minolta camera owners will receive future service and support from Sony. In addition, Sony's future high-end cameras will be compatible with Konica Minolta lenses.

According to a press release, Konica Minolta will stop production of all cameras by March 31. It will also exit the camera film market by March 31, 2007. About 55% of the photo divisions 5900 employees will be laid off.

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