Japan’s Hitachi Ltd. (6501), which quit making televisions in 2012 to focus on industrial-power and infrastructure units, is poised to surpass Canon Inc. (7751) in market value as sales of cameras are sapped by smartphones.
The CHART OF THE DAY tracks the market capitalizations of Hitachi, Canon, Sony Corp. (6758) and Panasonic Corp. (6752) since February 2004, when Canon was in a rally that peaked in July 2007, shortly after Apple Inc. started selling the iPhone. Hitachi is the only company in the group worth more than when Lehman Brothers Holdings Inc. filed for bankruptcy in September 2008. It overtook Sony and Panasonic in 2011 and is on pace to pass the world’s biggest camera maker.
“It’s just a matter of time before the market caps of Hitachi and Canon flip,” said Nobuyuki Fujimoto, senior market analyst at SBI Securities Co., Japan’s biggest online brokerage. “Companies focusing on infrastructure business like Hitachi are healthy and preferable to consumer-technology firms.”
Hitachi generated 37 percent of sales in the quarter ended September from power and industrial systems, up from 28 percent in the same three months of 2008. The proportion from digital-media and consumer products fell in the same period to 8.6 percent from 12 percent, based on the most-recent financial statements. Canon, which reported full-year results on Jan. 29, generated 26 percent of revenue last year from cameras, little changed from 28 percent in 2009.
Increasingly-sophisticated smartphone cameras led to Canon’s first annual drop in shipments of single-lens reflex models last year. Hitachi, which ended 56 years of TV making in August 2012, is capitalizing on growth in countries such as India to sell products including construction machinery and industrial air-conditioners. Hitachi’s shares jumped 58 percent last year as Canon’s fell 0.3 percent. Canon spokesman Richard Berger declined to comment. Hitachi spokesman Tadashi Hisanaga said changes in value are important but decided by the market.
“As smartphones become more popular and advanced, fewer people want to bother with a digital camera,” Fujimoto said. “Hitachi’s industrial and civil-infrastructure business is expanding. Many investors value how the company changed.”
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