Good News or Bad?

Sony today announced that they're closing the Minokamo plant, which makes DSLR (Alpha mount) lenses and also lenses for mobile electronics such as phones. Production of DSLR lenses will be moved to the Kohda site (which has mostly been involved with compact cameras, camcorders, and printers), while mobile product lenses will shift to the Kisarazu site. The Minokamo site will close in March 2013. 

Sony is in the midst of a giant cost-cutting campaign, attempting to reduce employment at headquarters by 20%, and headcount overall by 10,000 or more this year. 

So what does this mean for NEX? 

Rumors have been brewing out of Sony for awhile now that they will OEM lenses from other companies rather than produce them all themselves. Reducing their lens production capacity seems to be a signal that the rumor might be true. By OEM, we're not referring to things like the Zeiss 24mm, which may be a Zeiss design but is a Sony manufactured lens; we're talking about lenses completely produced by other companies that Sony then stamps their name on. Tamron, partly owned by Sony, is the usual company mentioned in this context. The recent investment in Olympus also opens up the possibility that we may see Zuiko glass with the Sony name on it some day.

The good news is that Sony is clearly moving forward on reducing cost structures and trying to return their consumer goods businesses to profitability. The bad news is that this cost cutting is hitting the imaging group fairly directly now. There will be impacts on the product lines. The only question is what those impacts will be.

Note that the Alpha line hasn't made a dent in the Canon/Nikon duopoly in DSLRs. Likewise, Sony compact cameras are on the decline (Nikon's aren't). The one bright spot in Sony's imaging lineup is NEX, which is one reason why so many of the Sony Imaging announcements, both still and video, are about NEX. 

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