Mirrorless shipments surge....

Started Nov 1, 2013 | Discussions thread
Eamon Hickey
Veteran MemberPosts: 3,170
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no, they know they need profits from cameras
In reply to Abrak, Nov 1, 2013

Abrak wrote:

Luckily Olympus seems to think that cameras are 'terribly important' and seems keen to continue making them despite horrendous losses.

They do. And I hope they continue (although not with losses) because I like their cameras, too.

Their management have even been quoted as saying that cameras never need to make a profit

They did not say this. They said that despite its losses, one countervailing benefit of staying in the camera business was that R&D done for the camera business sometimes had crossover benefits for medical and other businesses. In reality, this is just a statement about one of the benefits of product diversity -- it's true that having a range of businesses can produce unexpected R&D cross-pollination that companies who are in only one line of business don't get. It's an important idea, but it's not a new revelation or specific to Olympus in any way -- every company knows it.

As for cameras, Olympus management makes ritual pledges at every earnings announcement to get cameras back to profitability. They insist that they can and will. But they haven't, and the pressure mounts.

Earlier this year, in fact, their CEO, Hiroyuki Sasa, said that the company would not pay dividends to its investors until cameras were once again profitable. This is not the action of a company that believes cameras don't need to make a profit. Here's the article where Sasa was interviewed.

http://www.bloomberg.com/news/2013-05-21/olympus-compact-camera-sales-to-extend-drop-next-year-ceo-says.html

It's interesting to note that they were at that time relying on a significant increase in ILC sales to bring them back to profitability. As you know, so far this year, overall ILC sales are down significantly and there's exactly zero reason to believe that Olympus is the one major exception. Barring a minor miracle, they will find themselves in May 2014 once again having to explain why their predictions of camera profits were wrong again. Note that it doesn't make me happy to say that, but facts are facts, as you know.

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