Nikon wants to expand its medical business due to slumping camera sales

Smartphones these days pack some pretty impressive camera hardware, impressive to the point where it can easily replace your regular compact point and shoot cameras. In fact we’re sure most users would prefer using their phone since it means that there is one less device that they’d have to carry around. Nikon themselves have expressed concern over the shrinking compact camera market and, to help combat the decline in camera sales, Nikon has decided to invest $1.96 billion in other fields, such as medical equipment. “The camera and precision instrument maker also said it would assign 220 billion yen for research and development over three years including the current business year to March 2015. Of that, 50 billion yen will be directed to fields such as medical equipment.”

In a bid to counter a slump in its camera sales, Nikon Corp.’s incoming chief executive said on Tuesday he would aggressively expand his company’s medical-device business through acquisitions. Kazuo Ushida, currently the senior executive vice president, said the Tokyo-based camera maker plans to spend about $2 billion for mergers and acquisitions in the medical and instruments businesses over the next three years. “Merger and acquisition will account for a large part of the initial sharp growth” in the medical business, Mr. Ushida said. “There is a huge potential” in this business, he added. Mr. Ushida, who will take over as CEO pending approval at an annual shareholders meeting later this month, said Nikon will hire M&A experts to compile a list of targets and to handle due diligence and postmerger integration. It also will allocate nearly a quarter of its $2.2 billion in planned research-and-development spending for the medical business and new areas. The transition comes as Nikon grapples with falling sales of its compact digital cameras and digital single-lens reflex, or DSLR, cameras as consumers opt to snap photos on their smartphones.