Shimadzu halts sales of MRI scanners outside of Japanese marketplace

Low level of sales not enough to sustain international efforts

The increased level of MRI purchases hasn’t benefited every vendor. Unable to keep pace with technology and saddled with rising costs, Shimadzu is cutting back its MRI operations.

“We’re halting the sales of MRI scanners outside the Japanese market,” said Don Karle, director of North American sales and marketing for Shimadzu Medical Systems.

The decision, conveyed by Japanese executives to their counterparts at U.S. headquarters in Torrance, CA, on Dec. 2, formally recognizes what has been a problem for much of 1999. The North American arm of Shimadzu has not sold an MRI scanner since the first quarter of 1999. In that quarter, only four units were sold.

“Our sales have fallen off dramatically over the last several years (in North America),” Karle said. “We’re moving between three and five systems per year.”

Shimadzu will continue to produce its Magnex line of Epios MRI scanners in Japan, where MRI sales annually account for 20 to 25 scanners. The scanners, which can be configured with magnets that generate field strengths of 1.5, 1, or 0.5 tesla, are typically included in large package deals that include CT, angiography, RF, and ultrasound systems.

“This provides an economy of scale across the board for these modalities,” Karle said.

The company plans to support its installed base of MRI customers, regardless of their location, through continuing software and coil upgrades. Whether those upgrades come directly from Shimadzu or through cooperative efforts with other OEMs has not yet been decided.

“We still have many loyal customers within the U.S. and Canadian markets,” Karle said. “We will take care of this current customer base, but big decisions have to be made and if we cannot adequately support new users in MRI, we don’t want to bring them onboard at this time.”

The retreat contrasts starkly with the optimism that pervaded Shimadzu’s outlook at the start of the decade, when the company set out to be a major player in all imaging modalities in the U.S. At the time, MRI was seen as a key ingredient for achieving that goal. In 1992, the company expanded its MRI service network through distributors and dealers of its equipment, then focused attention the next year on its 1-tesla product, hoping to attract customers with the general purpose, value-priced, high-field scanner. Shimadzu struggled when the MRI market turned down in 1993. A dedicated MRI sales force was added (SCAN 7/28/93), but then dropped in favor of the distributor and dealer sales network a year later (SCAN 7/13/94).

The company never recovered from the MRI slump, Karle said, as sales slowed to a trickle in the waning years of the decade. A major reason for Shimadzu’s failure in this market was its inability to keep pace with the rapid advancement of MRI technology, which made it difficult for the firm to hold the attention of prospective customers, according to Karle. Other reasons were low MRI sales volume and the rising cost of manufacturing the scanners.

“That’s the catch-22,” he said. “You need the volume to keep your costs down and you need the correct product at the correct price for the market (in order) to keep the volume up.”

Shimadzu might re-enter MRI markets outside Japan sometime in the future, Karle said. Whether and when that happens will depend on the evolution of MRI technology, which is becoming increasingly reliant on software.

“Shimadzu now has over 100 dedicated software engineers,” he said. “So the move from hardware to software could make it easier to bring out new products in the future.”