Nikon shares plunged 14.29 percent Friday after the Japanese giant warned that compact camera sales were falling through the floor as consumers increasingly turn to picture-taking smartphones.
The soaring popularity of smartphones is crushing demand for point-and-shoot cameras, threatening the once-vibrant sector as firms scramble to hit back with web-friendly features and boost quality.
On Thursday, Nikon largely blamed slumping digital camera demand to explain a 72 percent on-year decline in its April-June net profit, while slashing its sales and profit outlook for the fiscal year to March 2014.
“The results are negative for Nikon shares as they came in below market consensus and sales for both its compact and mirrorless cameras were poor,” Yoshihiro Okumura, general manager for research at Chibagin Asset Management, told Dow Jones Newswires.
By Friday’s close, Nikon shares had lost 14.29 percent to 1,726 yen. The firm published its weak earnings after markets had closed on Thursday.
“We expect the business to remain tough,” Junichi Ito, Nikon’s chief financial officer, told a news briefing Thursday
Digital camera shipments tumbled almost 43 percent in the first six months of 2013 from a year earlier, according to industry figures.
Just as digital cameras all but destroyed the market for photographic film, the rapid shift to picture-taking smartphones has torn into a camera sector dominated by Japanese firms including Canon, Olympus, Sony and Nikon.
While the drop has been less drastic, Nikon said demand has also been falling for its more profitable interchangeable lens cameras.
Nikon shares dive on weak demand for digital cameras
