Hogan on Olympus financials

Started Feb 16, 2013 | Discussions thread
Rick Baumhauer Regular Member • Posts: 370
Re: Hogan on Olympus financials

Anders W wrote:

Rick and others,

I am not so sure that the automotive analogy is to the point here. When it comes to cars, the Japanese face pretty strong competition from car manufacturers elsewhere, especially Europe, the US (in the US market), China (in China), and South Korea. When it comes to cameras, they are pretty much competing only with one another. All others are niche players or not much of a threat, at least not yet (Samsung). So they don't have much incentive to change their product portfolio to become more competitive with cameras from elsewhere. Nor can it be taken for granted that people would buy more cameras so that the entire market would expand if they altered that portfolio.

Rather, I think the main reason why the camera manufacturers are not doing better financially is that the competition between (the mostly Japanese) camera makers is fierce (which keeps the profit margin very low), just as with consumer-electronics products more generally, and that they now additionally face competition from outside the camera industry proper (smartphones).

Anders - quite true, and sensible differences to point out.

So, given that, what is the likely course of events over the next couple years? I can't see all of the current manufacturers staying around - wouldn't it be wise to pull Ricoh out and concentrate on Pentax, for instance? Olympus and Panasonic don't look like companies that are likely to bow out, and Sony seems determined to make cameras a cornerstone business (in spite of results to this point), but how can all of these companies continue to lose money on cameras quarter after quarter, indefinitely?

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