Pentax Corporation

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Pentax Corporation

2-36-9 Maeno-cho
Itabashi-ku
Tokyo,
Japan
Telephone: (81) 03 3960 5151
Fax: (81) 03 3960 2063
Web site: http://www.pentax.co.jp

Public Company
Incorporated: 1919 as Asahi Kogaku Goshi Kaisha (Asahi Optical Joint Stock Co.)
Employees: 5,490
Sales: ¥133.56 trillion ($1.2 billion) (2005)
Stock Exchanges: Tokyo
Ticker Symbol: 7750
NAIC: 333315 Photographic and Photocopying Equipment Manufacturing; 423410 Photographic Equipment and Supplies Merchant Wholesalers; 423460 Ophthalmic Goods Merchant Wholesalers; 541512 Computer Systems Design Services

Pentax Corporation is one of the world's best-known names in the camera industry, and has long served as a photographic equipment pioneer. The company continues to produce cameras and other photographic equipment, including its ∗ist D Digital SLR cameras, the Optio-series of digital compact cameras, the MZ range of autofocus SLR film cameras, and the ESPOP-series of compact film cameras. Pentax also produces interchangeable camera lenses and lens adapters, as well as other accessories, and a variety of other optical-related products, including binoculars and telescopes; medical equipment, including endoscopes and fiberscopes; and medical fine ceramics products, including its Apaceram artificial bones and artificial dental roots. In addition, Pentax has developed a number of software and information technology operations, including text-to-speech and related applications. Pentax also continues to produce its original product, optical lenses, through a joint venture with Seiko formed by a merger in 2003. Like many of the former Japanese film camera giants, including Nikkon and Minolta, Pentax has been hit hard by the switch to digital cameras at the start of the new century; the massive consumer shift to the digital format, together with the onrush of new competitors and Pentax's own late entry into the digital market caused a severe drop in the company's revenues at the beginning of the decade. Seeking a larger partner, in late 2005 the company signed a production agreement with Samsung; the first Pentax-designed, Samsung-produced digital camera debuted in January 2006. Pentax is listed on the Tokyo Stock Exchange, and is led by President, CEO, and Chairman Fumio Urano. In 2005, the company posted sales of ¥133.56 trillion ($1.2 billion).

LENS MANUFACTURER IN 1919

Pentax originated as a small manufacturer of eyeglass lenses, Asahi Kogaku Goshi Kaisha (Asahi Optical Joint Stock Co.), founded by Kumao Kajiwara, in Toshima, a suburb of Tokyo, in 1919. Asahi quickly established a reputation for the quality of its lenses, due in part to the company's adoption of polishing techniques more commonly used for microscopes and telescopes. Asahi extended his operations into other lens categories, such as film projection lenses, starting in 1923. By the early 1930s, Asahi had begun to produce camera lenses as well, including for future Japanese photographic equipment leaders Minolta, starting in 1932, and then Konica in 1933. In support of this, the company built a new factory outside of Tokyo in 1934.

Into the 1930s, Asahi's production turned more and more toward the production of camera lenses on the one hand, and production of optical equipment, such as periscopes and gunsights and the like, for the Japanese military. The installation of a military government in 1937, however, placed Asahi's operations under government supervision, and production was wholly turned over to producing optical equipment for the military.

By then, Kajiwara had died, and the company's leadership was taken over by a relative, Saburo Matsumoto, who also had worked for Asahi for several years before starting a career as a printer. Matsumoto had developed an interest in photography—and even owned one of the first German-made single-lens reflex cameras—and had begun to plan Asahi's expansion from the production of camera lenses to the cameras themselves. With Asahi's production placed under military supervision, however, Matsumoto was forced to seek a new outlet for his plans. In 1938, Matsumoto bought a small factory in Tokyo, and renamed it as Asahi Optical Co. Ltd. There, Matsumoto resumed production of camera lenses.

Soon after, however, the new factory's production was turned over to support the country's military effort as well. During the war, the Japanese government discouraged the development of a consumer photography market. Nonetheless, Asahi remained in the photography business, producing aerial photography and related photographic equipment for the military. In this way, the company was able to develop its lens production and polishing technologies during the war.

By the end of the war, the Asahi factories had been destroyed and much of the company's workforce had been killed. In order to pay off the company's debt, and with little hope of recovering the money owed to it by the disbanded military government, Matsumoto sold off the remains of the company's equipment and inventory, freeing himself of debt.

Asahi managed to resume operations by the summer of 1946, when the company received its first orders for supplying binocular lenses for the U.S. occupying force. Before long, the company began to pick up new lens supply and polishing contracts from the country's camera makers.

COMPANY PERSPECTIVES

Your Partner for Sharing Precious Moments. At Pentax, we do everything we can to develop advanced technologies and manufacture user-friendly products in the many fields in which we are active. Our passion is in helping you preserve your precious moments as effortlessly and enjoyably as possible. Our slogan, "For your precious moments," sums up the efforts of all Pentax employees toward the achievement of this goal. No matter how revolutionary or groundbreaking an invention or discovery is, it means nothing unless it can be put to good use by our customers in sharing their precious moments. At Pentax, we keep this in mind by observing technology not only with a sharp scientific viewpoint, but with a keen understanding of everyday life as well. This vision is the source of our inspiration and imagination, and helps us significantly as we work to create technologies and products that will be truly meaningful in your life. Our success depends on how often and well we can help you to share your precious moments, and how we can contribute to the communities where we live and work. In this new century, every company must take on new and broader responsibilities for society and the environment. We are determined to create the new PENTAX technologies and products that will make us an important part of your life.

Matsumoto, however, now became determined to transform Asahi from a mere parts supplier to a full-fledged consumer products manufacturer. Asahi's first product was a telescope, produced in the spring of 1948 specifically for a total eclipse of the sun visible from northern Japan that year. The company's telescope featured a tube made of cardboard, as well as the company's high-quality lenses. The success of the telescope, which was meant as a temporary product only, led the company to look for something more permanent. Matsumoto quickly settled on the production of binoculars, a small but promising market in Japan at the time. By the end of the year, Asahi had launched its highly popular "Jupiter" compact binoculars, which became a huge consumer hit not only in Japan but overseas as well. The success of the Jupiter was credited, in large part, to the company's commitment to high quality. As part of the design of the Jupiter, the company had helped develop a new lens coating technique, in conjunction with Nagoya University, which produced a sharper and more durable lens.

PHOTOGRAPHIC PIONEER BY 1951

Matsumoto now turned his attention to developing Asahi's first camera. For this, Matsumoto was determined to develop the company's own technology, rather than imitate the industry-leading German camera designs of the time. Matsumoto gathered a small design team and set out to create a new single-lens reflex (SLR) camera that would work with the 35mm film standard. With no SLR cameras from which to work, Asahi's research and development team was forced to invent the camera from scratch. Nonetheless, by the end of 1949, the company had succeeded in creating a working prototype.

By 1951, Asahi had succeeded in developing a finished product, dubbed the Asahiflex. The company at first attempted to market its camera to store directly, but met with refusal from storeowners to carry the camera. The company continued to make improvements to the Asahiflex's design, and in 1952 reached a distribution agreement with Hattori Tokeiten (the future Seiko Corporation). The camera, the first of its kind in Japan, proved a huge hit, and before long the company stepped up its production from 200 units per month to more than 500 per month.

KEY DATES

1919:: Kumao Kajiwara founds Asahi Kogaku Goshi Kaisha (Asahi Optical Joint Stock Co.) to produce eyeglass lenses.
1923:: Production of lenses for film projectors begins.
1932:: Production of camera lenses begins.
1937:: The military government forces the company to convert production for military purposes.
1938:: Under the leadership of Saburo Matsumoto, the company acquires a small factory, renamed as Asahi Optical Co., in order to continue to produce camera lenses.
1946:: With the factories destroyed, Asahi relaunches production of lenses for the Occupation forces.
1948:: Asahi Optical launches its first consumer product, a telescope for viewing the solar eclipse in northern Japan; the company then launches its first full-fledged consumer product, the Jupiter binoculars.
1949:: Development of the first SLR camera begins.
1951:: The first Asahiflex camera is released.
1957:: The new "Pentax" SLR camera, featuring a pentaprism, is launched.
1962:: The company opens its first European sales subsidiary in Belgium.
1971:: Asahi Optical is listed on the Tokyo Stock Exchange.
1973:: The company opens its first foreign manufacturing plant in Hong Kong.
1975:: A manufacturing plant in Taiwan is opened.
1976:: The company establishes its first U.S. sales and distribution subsidiary.
1982:: Further expansion is under way in Europe, with subsidiaries in Switzerland, Sweden, and The Netherlands.
1983:: The company launches its first medical ceramics product, the Apaceram artificial tooth root.
1986:: The first compact zoom camera is launched.
1990:: The company establishes a manufacturing plant in the Philippines, and begins licensed manufacturing in China.
1994:: A manufacturing plant in Vietnam is opened.
1999:: Camera sales drop as competitors introduce the new digital camera format.
2001:: Fumio Urano becomes CEO and chairman and leads the company on a strategic review.
2002:: The company changes its name to Pentax and begins developing its own digital camera technology.
2003:: The successful Optio digital camera line is launched.

Asahi continued to make improvements to the Asahiflex, such as adding a pre-set aperture ring in 1953. This ring gave the photographer greater ease while focusing. By 1954, the company had launched the next generation of Asahiflex cameras. In the meantime, the company began developed of a new camera design, the world's first SLR camera to incorporate a pentaprism. This camera was launched in 1957 as the Pentax, and it thrust Asahi onto the world camera stage.

The success of the Pentax was immediate, and by the mid-1960s the company had sold more than one million SLR cameras. By then the company had added a new innovation, the Spotmatic, which took exposure measurements through the camera lens. The Spotmatic helped further boost Pentax sales, which topped two million units sold by the beginning of the 1970s.

INTERNATIONAL PRODUCTION: 1980–2000

By then, Asahi had opened its first distribution subsidiary in Europe, in Belgium, in 1962. The company opened a new factory in Tochigi in 1968, and by 1971 had gone public with a listing on the Tokyo Stock Exchange. Two years later, Asahi opened its first foreign manufacturing plant, in Hong Kong. This was followed by the opening of a factory in Taiwan in 1975, and sales and distribution subsidiaries in the United States (1976) and Canada (1978).

By then, too, Asahi had begun to diversify its operations, entering the computer market with the launch of its Photoplotter automatic drafting system in 1973. Into the 1980s, the company's diversified interests expanded to encompass the field of medical ceramics, notably with the 1983 début of its Apaceram artificial tooth root. In 1985, the company added another medical product, Apatite, an artificial bone filler.

Asahi's international development continued as well, with new subsidiaries established in France in 1981, and Switzerland, Sweden, and The Netherlands in 1982. The company also expanded its eyeglass lens sales, with the launch of Pentax Vision Inc. in the United States.

In the meantime, Asahi remained a leading innovator in the camera market. Among the company's successes were the launch of the world's first compact zoomlens camera in 1986, and the first autofocus SLR to feature built-in autoflash in 1987. In that year, as well, the company adapted its camera technology to the medical market, launching production of a its first electronic endoscope.

Toward the end of the decade, the company began to shift more of its production outside of Japan. The company reached a licensing agreement in Gansu Optical Instruments Industrial in China, which began producing Pentax-branded compact autofocus cameras for the Chinese market. That year, Asahi set up its own production facility in the Philippines Mactan Export Processing Zone, where it began producing its lower-priced camera range. The company continued opening new production facilities through the 1990s, adding a plant for the manufacture of eyeglass lenses in the Philippines in 1992, and a new optical device facility in Vietnam in 1994.

GOING DIGITAL IN THE NEW CENTURY

Throughout the 1990s, Asahi continued to turn out new Pentax camera models, including 1997's 645N, the world's first medium-format autofocus SLR. Yet the company's commitment to film cameras, a policy held to by the founding Matsumoto family still in control of the company's direction, was to cost it dearly into the new century. The arrival of the first digital cameras caught the company off guard; by the beginning of the 2000s, the company's camera sales had dropped in half.

Fumio Urano, the company's top design engineer, was brought in to lead the company in 2001, becoming company president, CEO, and chairman. Urano led the company on a strategic turnaround, not only embracing the new digital format, but becoming determined to become a technology leader. As part of that review, Asahi changed its name to the more well-known Pentax name.

The company quickly held true on its promise. In 2003, for example, the company launched its Optio line of extremely compact digital cameras. By 2004, the company had introduced its latest innovation, the ∗ist DS line of single-reflex digital cameras, which became the smallest and lightest cameras on the market to allow interchangeable lenses. The company also launched a new low-priced digital camera line that year. The new models helped restore the company to profitability.

Yet the rise of a raft of new competitors, including low-priced competitors from China, but also such unlikely camera producers as printer manufacturers Hewlett Packard and Epson, and appliance manufacturers such as Panasonic, continued to place Pentax under pressure. In response, Pentax sought further extensions to its diversified operations. In 2004, for example, the company acquired Microline Inc., based in the United States, which allowed it to enter the market for laparoscopic instruments. In late 2005, the company began exporting its video endoscopy systems to the global market, and in January 2006, the company acquired Voiceware Co., a producer of text-to-speech software technologies.

Pentax also sought to protect its corporate position. In 2005, the company adopted a "poison pill" defense in order to protect itself from a potential hostile takeover attempt. Later in that year, the company aligned itself with Korea's Samsung Corporation, in order to take advantage of that group's massive marketing and distribution capabilities. Under that agreement, Samsung launched its own digital camera, based on Pentax's ∗ist D format, in January 2006. In this way, the Pentax name appeared certain to remain an industry pacesetter into the twenty-first century.

PRINCIPAL SUBSIDIARIES

Pentax (SCHWEIZ) AG (Switzerland); Pentax (Shanghai) Corporation; Pentax Benelux B.V. (Netherlands); Pentax Canada Inc.; Pentax of America Inc.; Pentax Cebu Philippines Corporation; Pentax Europe GmbH (Germany); Pentax Europe N.V. (Belgium); Pentax France S.A.; Pentax Fukushima Co., Ltd.; Pentax Hong Kong Ltd.; Pentax Imaging Company (United States); Pentax Industrial Instruments Co., Ltd.; Pentax Medical Company (United States); Pentax Optotech Co., Ltd.; Pentax Scandinavia AB; Pentax Service, Co., Ltd.; Pentax Tohoku Co., Ltd.; Pentax U.K. Ltd.; Pentax VN Co., Ltd. (Vietnam).

PRINCIPAL COMPETITORS

Tomoegawa Paper Company Ltd.; Canon Inc.; Fuji Photo Film Company Ltd.; Sony USA Inc.; Ricoh Company Ltd.; Xerox Corporation; Eastman Kodak Co.; Konica Minolta Holdings Inc.; Olympus Corporation; Nikon Corporation; Agfa-Gevaert Group; SAGEM S.A.; Oce N.V.; 3M Deutschland GmbH.