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Olympus-new CEO and disappointing financial report

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Bilgy_no1 said:
I think the biggest challenge is to get the cameras on the relevant store shelves and have salespeople recommending their cameras (PENs vs. DSLRs).
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Yes. I never observed and experienced that a salesperson recommends by himself a m4/3 system. Only if you specifically ask for it, they show it to you and explain it. Even then they tell the people, that they should also have a look at this and that DSLR system, which has the following advantage: bla, bla, bla. The usual arguments are that a larger sensor is better, that a DSLR is quicker, and that the lens system is larger. All this is true. However, size and weight arguments are downplayed and rarely raised at all. That everything depends largely on the intended use, is usually not discussed. In 90 out of 100 cases, the customer leaves the shop with one of the lower end DSLR kits.
Bilgy_no1 said:
Alexsfo said:
Even though they have such succesfull PEN product line; it's probably still more of a niche market...I would assume that their P&S cameras don't sell nearly as well as Canon, Lumix or Sony...The competition in this area is so tough that it requires some significant resources to survive. I still want to see what E-P3 will have to offer.
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http://www.flickr.com/photos/bilgy_no1
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Thomas
 
Not upgrading the DSLRs had a reason: they were even less successfull for many reasons (IQ, viewfinder, marketing, release policy, features, product line image).

The reported numbers come from a quarter were the economy is growing quite well. It is even more scaring that it is the quarter, where sales should be especially good due to the holidays season. A 30% loss of sales around Christmas in Europe cannot be explained with the economic crisis in 2008 and 2009. The reasons are deeper and more related to the products and the marketing. Other vendors were more successfull.
sderdiarian said:
Not upgrading the E-620 and essentially abandoning the DSLR class of cameras couldn't have helped, especially with its impact on lens sales. But this also corresponds with the biggest international economic downturn since the Depression.

I'm hopeful a western CEO will make this company more in tune with its international customer base, not just Japanese, and help rid it of what at times comes across as arrogance bordering on deafness.

Their recent compact intros including the XS-1 and the slim SZ-10 superzoom are promising, as is the E-PL2. A full-featured mFT body (built-in EVF, flip 3" OLED, AF assist, IBIS) would certainly help as well. We'll see.
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Sailin' Steve
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Thomas
 
No. But you sell (or close), when you can't stop the trend. It is the fourth consecutive quarter with losses in imaging with a growing tendency. I am sure that this is something the new CEO will focus on.
amalric said:
MichaelKJ said:
The big question for Oly is how the new CEO will view the camera division. Hopefully, he will see it as an opportunity to enhance his status by making it profitable. However, as an outsider with a reputation as a cost cutter, the pessimistic view is that he could decide that the best way to increase the stock price and make the company more profitable is to sell off the imaging division.
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Would you sell a division only because of a fall in profits for the first quarter? Because if you look at the profits column there was a strong recovery between 2009 and 2010.

Selling might be a consideration, but the last I read from Oly camera div. was that they gave themselves 5 years to double profits. So LT expected sales and Market Share might be a consideration too.

Am.

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Photostream: http://www.flickr.com/photos/amalric
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Thomas
 
Bilgy_no1 wrote:
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Bilgy_no1 said:
Maybe, the change hasn't been radical enough. E.g. the PENpal is a good idea, but why isn't there an Android App to communicate with the E-PL2? There are many ways in which Olympus can build on the PEN foundation. Wonder if the new CEO is going to make any changes in the DC division, but it seems almost obligatory.
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I doubt that Olympus can be successfull with being more "electronic". The competition (Sony, Samsung, Nikon) will be much better in the gadget business. I would think that Olympus should concentrate - as Leica - on the ambitious photographic business and on high end. The race for the cheap compact crown is too risky and the market is already saturated.
Bilgy_no1 said:
Bilgy_no1 said:
Olympus started life as an optical company and has been obliged to develop skills in the electronic fields. By contrast Sony and Panasonic are the other way round. They have developed their own electronic technologies and formed collaborations with optical companies. Panasonic wisely decided to collaborate with Leica and in the m43 and smaller fixed lens camera fields we have seen some great lenses coming from this collaboration.
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http://www.flickr.com/photos/bilgy_no1
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Thomas
 
BigBarney said:
I think their new CEO will have to come to terms with options for the imaging business such as:
  • outsourcing all camera and lens production to countries with weaker currencies than Japan.
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I'm not sure where their lenses are made, but I do recall some people over at the Oly SLR forum who were up in arms a couple of years back when Oly decided to move camera production to China (as well as their consumer-grade lenses, I think). Perhaps the pro-grade lenses are still made in Japan.
BigBarney said:
  • severe pruning of imaging product lines.
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Possible. I suspect once Olympus has released their pro-grade m4/3 body, the 4/3 division will be let go.
BigBarney said:
  • raising prices on 'successful' niche products.
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Not my cup of tea, but a big possibility. Hoya did this with Pentax, though I'm not privy to their financial data to know how they're faring now.
BigBarney said:
  • focusing Research and Development effort onto fewer product lines.
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I suspect Olympus will be putting many of their eggs in the m4/3 basket.
BigBarney said:
  • more technology sharing with Panasonic on m43 systems. Imagine what we could have if both companies worked together and competed more effectively against the likes of Sony!
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That would be great, though I wonder how cooperative Olympus and Panasonic are with each other, really, aside from Oly buying sensors from Panasonic and both sharing a common mount. Panny seems intent to keep their quick AF tech for themselves - perhaps Oly doesn't have tech that interest Panasonic?
BigBarney said:
  • selling the imaging business or even the whole business.
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That would be sad, really.
BigBarney said:
Olympus started life as an optical company and has been obliged to develop skills in the electronic fields. By contrast Sony and Panasonic are the other way round. They have developed their own electronic technologies and formed collaborations with optical companies. Panasonic wisely decided to collaborate with Leica and in the m43 and smaller fixed lens camera fields we have seen some great lenses coming from this collaboration.
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It's a win-win for Panasonic and Leica. Panasonic gets some serious lens design expertise while Leica has a stable cash cow to allow them to keep developing for the well-off enthusiasts. And with the extreme adaptability of the m4/3 mount, Leica may even be getting a couple more sales of their lenses.

Thanks for the insights - very interesting.
 
Since Olympus made the E-1, people said : "Olympus is dead"

It made me smile :-)

Since then, they made a lot of nice cameras that were enjoyed by many photographers that made many nice pictures.

Moreover, a decrease in profits does not mean that they are non profitable, they just made less profits.

Don't worry, Olympus will continue to make cameras for a long time.

You know the meaning of FUD, right?
--
Cheers,

Frederic
http://azurphoto.com/blog/
 
tgutgu said:
tgutgu said:
Maybe, the change hasn't been radical enough. E.g. the PENpal is a good idea, but why isn't there an Android App to communicate with the E-PL2? There are many ways in which Olympus can build on the PEN foundation. Wonder if the new CEO is going to make any changes in the DC division, but it seems almost obligatory.
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I doubt that Olympus can be successfull with being more "electronic". The competition (Sony, Samsung, Nikon) will be much better in the gadget business. I would think that Olympus should concentrate - as Leica - on the ambitious photographic business and on high end. The race for the cheap compact crown is too risky and the market is already saturated.
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Well, what you say clearly shows. They're going in that direction with the PENpal accessory: it's made for integration of social media. But the way they did it, it's only a halfhearted kind of integration. It's just an example, and Olympus management team should make a good choice about strategic positioning and the related marketing strategies.
tgutgu said:
tgutgu said:
tgutgu said:
Olympus started life as an optical company and has been obliged to develop skills in the electronic fields. By contrast Sony and Panasonic are the other way round. They have developed their own electronic technologies and formed collaborations with optical companies. Panasonic wisely decided to collaborate with Leica and in the m43 and smaller fixed lens camera fields we have seen some great lenses coming from this collaboration.
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http://www.flickr.com/photos/bilgy_no1
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Thomas
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http://www.flickr.com/photos/bilgy_no1
 
Rather than employing full time trolls like Lin...B. I tell you what...if Oly can improve the auto focus , their sales will double.
MichaelKJ said:
TOKYO, Feb 10 (Reuters) - Japanese camera and endoscope maker Olympus Corp (7733.T) said its next chief executive officer would be British-born Michael Woodford, 50, who oversaw a restructuring of the firm's European operations

Olympus on Thursday cut its operating profit forecast for the year ending in March by 9.4 percent to 48 billion yen ($582.8 million), as its digital camera business was hit by a strong yen and intensifying competition.

The revised forecast was below an average estimate of 49.6 billion yen in a poll of 14 analysts by Thomson Reuters I/B/E/S. ($1=82.36 Yen) (Reporting by Isabel Reynolds; Editing by Edmund Klamann

http://www.reuters.com/article/2011/02/10/olympus-idUSTOE71904620110210

Third quarter camera sales for 2010 were 36.9% below third quarter 20009 sales.





http://www.photoscala.de/Artikel/Olympus-Neuer-Chef-soll-es-richten

http://www.olympus-global.com/en/corc/ir/brief/pdf/n110210aE_n.pdf
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Pixnat2 said:
Moreover, a decrease in profits does not mean that they are non profitable, they just made less profits.
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You mean, a loss of 12 billion yen is still profitable?
 
Indeed. It you break by countries you will see that actually Oly had a 8.8 turnover increase in Japan (43rumors).

The worst hit was America, followed by Europe.

That is probably caused by the demise of their dSLR division, since in the USA and EU mirrorless penetration is very little, about 1/5th of what it is in Japan.

So sorry Panny fanboys, don't expect to see the Pens go away so soon :)

Am.

PS Panny might have done better in the US, the Gxx acting as dSLR substitutes for dSLR addicts, which are the ILS market in the US. Not that I care about them, but perhaps they have a point.
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Photostream: http://www.flickr.com/photos/amalric
 
amalric said:
don't expect to see the Pens go away so soon :)
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I don´t expect it, I´m afraid of it. I really would like an Olympus µ43 with integrated EVF!
 
VLampa said:
BigBarney said:
  • selling the imaging business or even the whole business.
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That would be sad, really.
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Well, I think that depends who they sold it to. I don't think whoever buys it will buy it just to close it down, that makes no sense. It could easily be a good thing.

I mean Pentax getting sold to Hoya may have raised prices somewhat, but overall you feel made the brand a lot more stable.
 
Your analysis seems sound. I would have given them three options 1. restructure and invest in the camera business; 2. Merge with another company (Panasonic is the most obvious); 3. Cut their losses and get out of the business. Panasonic seems, to me from a distance, to be dipping their toes into a niche area of photography while Sony has decided to become a player. Samsung may also decide to become a player. A year or more ago Olympus, when they had a DSLR market, had something to offer Panasonic to help them to become a player. Today I don't see that Olympus has much to offer any partner. So they can restructure and try again or, perhaps, become a Sigma and sell lenses and niche cameras. Or for the optimists out there, they may have a new amazing product in the lab (such as the iPad) that will take the market by storm.
 
BigBarney said:
As well as being an amateur photographer, I once worked professionally in the medical imaging busness, so I will try to keep this simple. Endoscopes essentially come in two main flavours/flavors:
  • those that are inserted into the upper end of the alimentary canal.
  • those that are inserted into the lower end of the alimentary canal.
The lower ones are the most frequently used at present. However these medical applications are rapidly becoming obsolete as they are replaced by fast X-ray CT scanning. This newer technique is both more patient friendly and sensitive and specific in detecting early signs of bowel disease.

In short the market for large bowel endoscopes is as attractive in the long term as the market for kerosene lamps was when Swan and Edison came onto the scene.
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FYI...Fiber-optic scopes are not medically limited to the exploration of the small and large bowel.

Minimally invasive surgery, which is where surgical medicine is going at a major rapid clip, depends on fiber-optic scopes, and that is where Olympus has its focus:

http://www.olympussurgical.com/

This is a HUGE and growing field, and I guarantee you is where Oly is both innovating and growing, and will continue to grow.

Now, the problem, as I see it, with the camera division, is in marketing in the US. Oly needs to have field training with reinforcements and some kind of corporate incenctives (spitffs) for US retail salespeople as well as a catchy ad campaign to bring their products out of the niche market and get them into people's hands. In this regard, having someone who has a direct experience in non-Japanese markets at the helm might be just the thing to inspire a marketing strategy that will be more successful in those markets than it has been up until now.

Time will tell; I hope they do not give up on the consumer division or sell it...Or, if they do sell it, hopefully someone who has a clue about this stuff will take it and develop it properly.

-Janet
 
Developing a camera plattform with lenses, which comes to a halt after only seven years, while being more or less in agony for some years already, is not FUD. That only "many" photographers enjoyed some camera models of Olympus, does not mean that this is a commercial success. They had too many inventions, which were not successfull (i.e. the E-1, E-3xx bodies). Not successful is not equal to not good.

Olympus might not be dead, the digital camera department though might be very close to being dead. Which part will survive is no foreseeable. The new management can even decide to drop out of m4/3, because sales are not inline with taken and required investments.

Maybe they catch up in the next quarters. But to downplay the results of the last quarter does not help, especially because when you are already on the slope downhill people will loose confidence in the products even more.

Leica could only survive with a completely revised product strategy (M9 and S2), which was quite risky. As it looks, they did well.
Pixnat2 said:
Since Olympus made the E-1, people said : "Olympus is dead"

It made me smile :-)

Since then, they made a lot of nice cameras that were enjoyed by many photographers that made many nice pictures.

Moreover, a decrease in profits does not mean that they are non profitable, they just made less profits.

Don't worry, Olympus will continue to make cameras for a long time.

You know the meaning of FUD, right?
--
Cheers,

Frederic
http://azurphoto.com/blog/
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Thomas
 
tgutgu said:
Developing a camera plattform with lenses, which comes to a halt after only seven years, while being more or less in agony for some years already, is not FUD.
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Your sentence is pure FUD. All camera makers make huge profits in those digital days, and no camera makers are in agony. Only some sell more than others :-)

--
Cheers,

Frederic
http://azurphoto.com/blog/
 
But the quoted one doesn't at the moment.
Pixnat2 said:
tgutgu said:
Developing a camera plattform with lenses, which comes to a halt after only seven years, while being more or less in agony for some years already, is not FUD.
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Your sentence is pure FUD. All camera makers make huge profits in those digital days, and no camera makers are in agony. Only some sell more than others :-)

--
Cheers,

Frederic
http://azurphoto.com/blog/
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Thomas
 
I do too. But remember mirrorless are doing very well in Japan, having some 40% of the ILS Market.

In the US they had some 7% and even less in Europe, that's where profits fell.

So it might be down to the disappearance of the Oly dSLR line. Time will tell if it was a mistake, but surely they didn't have the money to finance both lines.

A cruel decision. Like cutting one own's limb.

Am.
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Photostream: http://www.flickr.com/photos/amalric
 
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