Canon’s Q1 Profits drop 88%, but is Ricoh a non-profit orginization?
May 2, 2009The buzz in the industry this week is that Canon’s Q1 profit fell 88%. That is big news and I am sure that it is very troubling to Canon. And every article you read about Canon’s profit falling all reference Ricoh’s purchase of Ikon as the contributing factor. And we would all agree that that Ikon going from selling 30% Ricoh (when they were independent) to 90% Ricoh in January 2009 would account for the drop in Canon’s profit. So everyone is wagging their tongues about maybe Canon made a mistake NOT buying Ikon.
And now the rest of the story (My apologies to the late Paul Harvey), Have you seen Ricoh’s financials for Q1 2009?
Ricoh’s Net profit margin for Q1 2009 was -4.39%
While Canon’s profit dropped by 88%, Ricoh is loosing money at least Canon did make a profit. And remember Ricoh bought this huge distribution channel, the once mighty Ikon and they are still losing money. Does this make Ricoh a Non-Profit Organization? Maybe they can get in line to get Federal bailout like every one else who has a failing business. It won’t be long until this administration starts bailing out international companies too.
So I am sticking to my opinion that Canon and not Ricoh made the correct decision regarding the purchase of Ikon. And while the industry pundits are chattering about Canon’s Q1 profits dropping, when you line them up next to Ricoh’s Q1 losses I will restate my belief that Canon’s decision to not purchase Ikon will prove (in the long run) to be the right decision. Time will tell.
That’s My $0.02
Vince McHugh
vince.mchugh@yahoo.com
MFPs, MFDs, PRINTERs & COPIERs 
I agree, Ricoh has to be the most dysfunctionally run organization in this industry. The acquisition to purchase IKON will become and has become a disaster. I think in the long run Canon will indeed bounce back stronger than Ricoh. In the meantime Ricoh will and could lose some strong dealers do to the Ricoh shake out.
At Ricoh, Dealer Division always supported Direct Division (where profit is non-existent). With a shift away from Independent Dealers (Ricoh, Savin, Lanier) and a clear focus on supporting the IKON endeavor with whatever it takes, Ricoh will find it tough to make profits while they turn their back on Dealers.
Just so you know – if you want to discuss the losses that someone is experiencing, the correct spelling is ‘losing’ NOT ‘loosing’.
David,
Thanks for the correction! It’s always good to have an english major proof reading the blog.
Vince
Update on Ricoh:
Ricoh announced its last quarter’s financials:
total revenue declined from 579 billion yen to 523 billion yen
copier/printer revenue down 10.6%
copier/printer profit down 90%
operating margin was negative 2.3% , as compared with 9% last year
net income declined form a profit of 21 billion yen to a loss of 23 billion yen
More bad news for Ricoh.
“After bad press from JP Morgan, Ricoh’s stock sank 5% to 1206 yen.”
http://mfpsolutions.blogspot.com/2009/06/mfp-weekend-industry-notes-from-62109.html
Vince
So Vince,
I think I have possibly figured you out. You worked for Ricoh for 2 years 4 months. Seems like two things are causing your blog to become littered with misinformation (See are Ricoh employees paying the price) and hate of IKON/Ricoh.
First would be that IKON has ruled the area you have worked in for so long. IKON have ruled because of our talent and business model. If it doesnt work, why so much marketshare. Look at the ratio of IKON/RICOH information on your website. Seems to me that you would look at them as your greatest competitor. Hence all the bad press you post.
Most importantly, what happened when you were at RICOH? You did not stay for very long and it seems as though you have some bad feelings. I understand, I used to work for a different company as well. I hate to lose to them (not that it happens often.)
Mainly, I am just trying to say, dont be so transparent, its almost to the point where you are trying to bash Ricoh/IKON and can never be good for business. Best of luck
Hey Manny,
It’s good that you are finally getting to put your degree in Psychology to use (figuring me out). That could become a full time job 🙂
Unlike some who post here (not you), I do not try to hide where I work or who I represent. I am upfront about that. I also have worked at Ricoh, which you will soon get to do. So I can speak about what I have seen or heard over there with some first hand knowledge.
And I have competed against Ikon for many years. As a competitor it is my job to point out their weaknesses and our strengths. This is not personal. This is the business that we have chosen. I actually like a lot of the people that I worked with at Ricoh, I stay in touch with many of them. And I have even hired a few of them since leaving.
I do think that Ricoh handled the Lanier merge poorly, and may have made a mistake purchasing Ikon (at least for what they paid). But only time will tell on that one. I am also very interested in to see how the Ricoh \ Ikon merge will work out. In my opinion there will be a lot of good and talented people scrambling for work when that happens. Again, only time will tell.
Thanks for your post!
Vince
Vince,
It doesnt look like you answered any of the points I spoke about. You stated the article I referenced as fact, which it is not. I would take a look at it and verify your information before it becomes an issue for you.
Also, is IKON not been your largest competitor and arent they the ones to thank for the Canon branding and Marketshare?
Did you abandon the blog like Canon tried to abandon its customers? or just do not want to respond. The RPCS driver commentary is awful, and totally untrue. Even the UFRII being decent.
Manny,
This may be a foreign concept to you, but some of us actually work for a living.
Regarding the RPCS driver, I speak from first hand experience. I have personally heard the Ricoh Tech support help line tell “ME” that they did not recommend that the RPCS driver be loaded on a Print Server and pushed down to workstations. I personally lived through the flakey behavior of the icons disappearing on the RPCS drive, and the Ricoh Tech support people telling us the only “fix” was to reload the driver each time that it happened.
I am guessing that your only first hand experience with the RPCS driver is reading the Ricoh press release. Have you ever even installed the driver, or any print driver? I am a network engineer by trade and know a poorly written driver when I see one. And if it was soooo good as you propose, then why did Ricoh just announce that they are abandoning it? I didn’t hear your comment on that.
And let’s not rewrite history. It was Ikon who broke their contract with Canon by selling out to Ricoh. They knew what the contract said but like a spoiled child they thought if they held their breath and stamped their feet they would get their way, they were wrong. It was and is Ikon who abandoned their Canon Customers.
Canon and the Canon Dealers are still here for the Canon customers. And they are coming over.
Vince
Your sarcasm is funny, I sell more consistently than your entire teams probably do for all of Rhode Island.
As for RPCS abandonment I see nothing other than your “article” on the matter. I have seen the new RPCS driver work and work well, many times better than PCL in most cases on a Midsize server. It has been a while since you have been at Ricoh and things change.
As for my experience, I have a degree in Computer Information Systems and have years of hands on experrience. I had the choice of selling Canon and Ricoh at the same time, and the majority of my sales were Canon only at first (quite a few years ago) until Ricoh became a superior product from a service and reliability standpoint. Dont believe me, run a 5055 next to a MP6000 or 5800, 5180, 5185, or a MPC6000. 2880I next to a MPC2550, want me to keep going? I could pretty much go through the entire line and there are few examples of where the Canon product is better than the Ricoh Product.
Oh and I didnt even have a chance to talk to your comment about the Merger. Canon had a choice, pull out on IKON (and in turn pull out on those customers) or support them until they no longer upgrade with Canon. You say “Why would Canon support another manufacturer” well, would Canon not get big money for those parts.
That incrimental income could certainly assist with all of the money that is being thrown around trying to get IKON sales professionals to come over to their team just in case NECS drops the Canon line and leads with Konica. Less than 2 weeks and Canon will be setting up shop less than 2 miles from you in Rhode Island. Best of luck. Hope your office doesnt suddenly become empty when Foley and Cruz recruit everyone from your office to work direct.
Manny,
Of course Canon had a choice. And they chose to honor the terms of the contract which Ikon signed. The CEO of Ricoh stated publicly that it was Ricoh’s intention to “upgrade” (and I use the term loosely) all of the Ikon \ Canon equipment to Ricoh in the next three years. And you think that Canon should help them accomplish this task? That doesn’t make a whole lot of business sense.
Did this cause the Ikon Canon customers some problems, YES! But it was Ikon that sold them out. When those customers contracted with Ikon they were and Authorized Canon Dealer. They had a contract with Canon and Canon honored that contract. It was Ikon and not Canon who broke the terms of the contract which lead to Ikon loosing it’s status as an Authorized Canon Dealer. Canon is working with their Authorized Dealers to help out any Ikon Canon customer that wants to stay with Canon.
I am sorry to be the one to break it to you, but contracts are binding, and decisions have consequences. That may not be fashionable to say today. But stop crying over not getting to have your cake and eat it too. Ikon made a decision to break the terms of their contract with Canon. Canon responded by terminating their Authorization. End of story.
I would like to point out the inconsistency of your statement with the actual facts. Ikon sold twice as much Canon as Ricoh product when they had the option to sell both. Now that they don’t have the option to sell Canon, Ricoh has suddenly “improved” to the greatest product on earth. Sounds like Sales spin to me.
Ikon will get many of their customers to follow them to Ricoh. When I went over to _BS we brought over a number of customers to Ricoh. But after a few years of using the Ricoh products and having to hear their end users complain about their lack of dependability and how difficult they are to use these customers are coming back to Canon.
So I have no doubt that you will be able to convince some of your long term customers to follow Ikon to Rioch. The real story will be told if you can sell them Ricoh the next time the lease is up. We shall see.
Vince
I have been Selling Ricoh now for 5 years, just so happens your reps are missing the boat and arent in on the deals. $108k on the log this month, All Ricoh. You can say IKON sold mostly Canon, but you cant say I sold mostly Canon. Its an inferior product, with inferior support from Canon. Even when we used the same channels as you for customer support. Its just to bad there is so much bad information on this site, hopefully the customer is smart enough to see through the crap.
Manny,
You MUST be a good salesman to sell that much RICOH equipment.
Was there any profit in the deal?
Vince
Everyone got a fair deal. No one got pillaged. No one got the farm for free. I just did my job and did it well with a good product that speaks for itself and doesnt rely on their brand. Must say though even in my retail position, I hardly ever go against anyone that sells Canon other than your new counterparts at Advanced. Speak of giving away the farm…They are worse than both of us.
ricoh is losing to xerox over and over again. Layoffs to come soon.
WOW, this blog is a classic read. It appears the competitive nature of ‘copier’ sales is alive and well all around the world!
I commend the Ricoh Global Exec on their recent acquisition strategy. Hitachi, IBM Printing Systems and IKON.
Living in a smaller country we tend to be a little more informed about issues facing the industry around the world. We aren’t smarter we just tend to be really nosey 🙂
Seriously though, as a Ricoh dealer in a small market it is crucial to back a winning vendor. Winning means more likely to acquire opposed to being acquired.
Hand on Heart here, Ricoh are heading towards a bright future and dominant position through Europe, the Americas and Asia Pacific.
Get on board or diversify.
And feel free to spread the rumor, Ricoh are buying Konica Minolta.
Later
Doug (AKA ‘KM KILLA’)
Guys, Get your facts straight….
Ricoh says to beat 2009/10 profit estimate by 44 pct
Wed, Apr 21 04:53 AM EDT
TOKYO, April 21 (Reuters) – Japanese copier and printer maker Ricoh Co (7752.T) said its operating profit would be 44 percent larger than previously forecast for the financial year ended last month due to cost cuts and recovering demand.
The higher profit forecast also beats the market consensus by about 30 percent and could point to a brighter earnings outlook for Ricoh’s competitors, which include Xerox Corp (XRX.N), Konica Minolta Holdings (4902.T) and Canon Inc (7751.T).