Ricoh exits optical drive business

Optical drive maker Ricoh has decided to withdraw from the optical drive business citing fierce competition and declining sales in Japan  and internationally. Ricoh has concluded that it will not longer be able to make a profit in the Optical drive business with the current drops in prices and arrival of new competition. 

The company has reported that net income for the first 6 months of this year fell 15.2% to Â¥35.8 Billion yen (£176 million pounds) compared to the year before. Sales hit Â¥878 billion yen down 1.4% from the pervious year, decreased sale of optical discs along with appreciation of the yen accounted for 7.4% of overseas sales. The company expects a 7.4% drop in net income to Â¥85 billion yen for the year ending 31 March 2005

Ricoh will now refocus its efforts on its printer and office automation divisions but will still produce CD and DVD discs. The company will be looking into the new Blu-Ray and HD-DVD optical technologies and will decide if it will make components or discs for either of the next generation technologies.

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 Â¥35.8bn (£176m) as of 30 September compared with last year, on sales of Â¥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 Â¥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.

Looks like another optical maker hits the end, we have already lost Yamaha now Ricoh i wonder who else will be dropping out in the future.

Source: Computer Weekly