It seems to me that things have gone quite well for OM System (OMS) in recent times – the OM-1 was a sufficient step forward to both encourage people to upgrade and bring new people into the system. They have sold 150-400s as fast as they can make them. However, I have no idea what their financials look like. The cost-cutting they have undertaken should have helped the numbers considerably.
If JIP intends to keep running OMS for a relatively long period, then it needs to be profitable. If they want to exit (which most likely means selling it to someone else), they first have to attract a buyer and then will wish to get the best price they can. This will basically be a multiple of earnings so the key to a successful exit is a healthy, profitable and growing business. Someone posted earlier that they need to aggressively manage cash; I agree - in business, cash is king.
OMS is a camera manufacturer. This means that they have little/no recurring revenue in their business mix; they rely entirely on product sales. In a product business, it is critical to have a pipeline of new / updated products. I cannot conceive that Olympus would not have had a product development roadmap that they passed on to JIP – it would have been a key factor from JIP’s perspective.
People have commented in these forums that OMS pipeline seems to be a bit bare or at least too slow. There hasn’t been an updated lens roadmap in a while. IMO though, we should be expecting some delays in OMS product launch / FW upgrade cycles. Why?
- The sale to JIP and subsequent internal restructuring / downsizing – having been through a couple of these events in large corporations, they divert substantial amounts of senior management time / attention away from the core business and reduce the effectiveness of the rest of the workforce due to uncertainty, speculation and reduced management focus.
- Covid – we all know about this and not many companies were able to avoid some negative impact.
I believe that these two factors combined are likely to have put a kink in OMS product development cycles. How much? No idea but 6-12 mths wouldn’t surprise me. This would affect both products and FW updates. Also, if products are delayed, then OMS will also have to consider staggering FW updates to bridge the gaps.
I agree with others here that OM-1 FW updates can help plug the gap until the OM-1.2 comes along. The major development costs could well have been covered by now and FW updates could help keep the OM-1 selling. FW updates don’t change hardware (unless there is something extra in the sensor that could be “unlocked”?) but IMO the OM-1 was a big step forward from both the EM1.3 and 1X and provides a platform that could evolve for a while.
It’s relatively easy to identify potential tweaks for some 1.x updates – improved AF (faster / better human tracking), etc; I’m not sure what they could come up with to justify a 2.0 update and positively impact sales by looking a bit like a product refresh and getting significant coverage from reviewers and forums.
One way to boost revenues would be an OM-1X (I recall seeing a comment credited to a OM representative suggesting that the EM-1X met sales projections – whatever those were) – that would add another product line to the mix.
An OM-1X would also allow the OM-1 price to slide a little over as it stops being the flagship model and increase it’s longevity before a new model becomes essential.
I just hope that JIP share my views of their world and are acting accordingly!