Correction: NOT WSJ but Yahoo Finance: Olympus one of 10 brands to disappear in 2014

Started May 26, 2013 | Discussions thread
peripheralfocus Veteran Member • Posts: 4,145
Olympus m4/3rds not yet profitable

KenBalbari wrote:

They've mostly done that already, it's called the E-PL5.  I don't think you can do better right now in the entry-level enthusiast segment.

I reviewed the E-PL5 recently and think it's a very nice camera -- I have tentative plans to buy one later this year. (I also reviewed, and for the most part liked, the E-PM2.) That said, the entry-level ILC market is hotly contested, and marketing muscle (i.e. advertising spend, brand appeal, distribution, and much else) are big factors in that segment. I think Olympus has competitive vulnerabilities there, especially outside Japan, completely apart from the (high) quality of their cameras.

And I think it is likely profitable for them, their losses are likely coming on point and shoot.

On profitability, we don't have to guess about that, at least not for Olympus's m4/3rds lineup as a whole (can't be sure about the E-PL5 by itself). An Olympus executive, speaking at the company's recent presentation of its financial results for last fiscal year, said that the business was not profitable ("almost break-even"). (It's true that the point-and-shoot business was much worse.)

So they are planning on putting all their eggs in the m4/3rds business, but that business isn't making a profit yet either. They think it will, obviously, but their profit predictions for digital cameras have been notably bad in recent years. (Their losses this last year were much worse than they had forecasted after the previous fiscal year, which was also substantially loss-making.)

See my post here for details on the profitability quote, if you're interested:

Down the road,  I think they will continue to be competitive in that segment.  I think you are right that Nikon One seems to be the biggest long term threat, but I think they will need to introduce in-body stabilization to really be competitive in this segment, especially in the future as Olympus's superior IS filters down into lower end models.  In-lens stabilization may continue to make sense for higher end DSLR, but for this value conscious segment, I don't think it works.

Keep in mind, Sigma is likely going to be a player here on the lens side.  I think the killer combination right now for real value consious enthusiasts is already Olympus cameras with Sigma DN lenses.  I think that could continue to be the case.

I do think Olympus does need to do better with marketing and branding.  Nikon's "One" mount is so much better named than "Micro Four-Thirds".   Only a real geek wants to know what "Micro Four-Thirds" means.   Both "OM" and "Pen" are decent brands, but it would be nicer if they had a simpler banner under which to sell the whole system.  "Micro Four-Thirds" sounds more like a line of medical devices than cameras.

But in the end, I think there's a prettty wide space between small pocketable cameraphone sensors and full frame DSLR.  And I think Olympus will end up pretty well positioned in that space, for much longer than the next year.

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