Konica Minolta is pulling out of the wet photography market. In an announcement made today - more than 100 years after it produced Japan's first photographic paper - the company outlined its plans for withdrawing from the camera and photo arenas, a move that will see over one-tenth of its 30,000 workforce out the door by October next year.

Explaining the move, the company says, "The traditional silver-halide photographic market is shrinking astonishingly by the surge of the worldwide digitization. In today’s era of digital cameras, where image sensor technologies such as CCD is indispensable, it became difficult to timely provide competitive products even with our top optical, mechanical and electronics technologies".

"In such a changing world, profits for camera and photo businesses worsened in recent years, and it became necessary to drastically reform [the] business structure for the further growth of Konica Minolta. Ever since we decided and announced restructuring guidelines of our businesses on November 4, 2005, we have been considering [a] practical and detailed plan."

What the company has decided to do, in effect, is to get right out of almost every business sector that involves film cameras, film or photographic paper. It will, however, still be involved in a half-hearted way in producing digital SLR cameras and interchangeable lenses for Sony in a joint venture with the consumer electronics giant.

KM says that, come March 31, Sony will receive "certain assets from Konica Minolta PI that are necessary for the development, design, production" of digital SLR cameras compatible with the Konica Minolta Maxxum/Dynax lens-mount system. Further, "Sony will accelerate development of new digital SLR cameras based on and compatible with the Maxxum/Dynax lens mount system with a view to marketing these models this summer."

The idea is that Sony will develop digital SLRs compatible with KM's lens-mount system and that existing Maxxum/Dynax users will have the chance to continuing making something with their investment by using their lenses on the digital cameras that Sony brings to market.

On the film and paper side, the company says there will be a "step-by-step" reduction in its output, with color film and color paper production stopping by the end of fiscal year ending March 31, 2007. KM's minilab business, though, will be wound up much earlier - by the end of fiscal year ending March 31, 2006 - but with support in place from third-party companies for "maintenance and customer services".

Job losses, the firm says, will affect not just the Konica Minolta holding company but also "five business companies and two common function companies in Japan" but largely be accounted for by early-retirement schemes.

KM also states that expenses incurred in restructuring are already included in its forecast for fiscal year ending March 31, 2006.

As the dust starts to settle KM reckons it will be free to concentrate on non-consumer "core" business technologies including optics and display devices, and will see growth in the medical imaging and sensing sectors - resulting in increased corporate value.

All very sad, but kind of inevitable, we think. For more numbers, check out KM's official statement and another relating to the assets transfer. Then join us over in the HEXUS.community to discuss this news and other changes that are likely to happen as a result of the fast-accelerating move towards digital photography and the digital home.