Signs of (Olympus) Life

Started 3 months ago | Discussions
boxerman Senior Member • Posts: 1,804
Small sadness on a sea of wonderful

HRC2016 wrote:

boxerman wrote:

BostonBoy wrote:

Oh well. Stupid me. Just bought an OMD 1 MK3 at my local dealer tonight.

If I hadn't already bought one, I certainly would now.

I would not have any reservations about buying any new Oly products.

My Oly bodies are working fine: EM1.2 and EM10 that's about 8 years old.

I had my E-M5 for 5 years. A revelation after years of compact cameras. Sold it to a friend (would you do that if it was iffy?). He's using it without problem for the last 3 years.

Then, I got the E-M1.2. Biggish step up, especially for action photography. Transitioned entirely from monopod for long lenses to hand-held on our African trips. In a small boat on the Nile, no less. Panny 100-400 did the job for me brilliantly.

In all these 10 years, I only had one bit of trouble. My E-M5 froze up once. Removed battery, all back to normal.

Just got the E-M1.3, and it's a nice step up for me. Lots of not-huge things, like better stabilization, joystick, Starry Night focusing, and those great in-camera stacking modes. A joy to use.

Unhappy about the risk of demise for Oly, but I'll be going for years with this setup. Thinking what additional lenses I'll buy if things look like their headed for the worst. 17 1.2? Look to see what the Oly 100-400 offers?

Thank you Olympus, for all these years, and the ones to come.

In-camera Focus Stack

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The BoxerMan

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Danielvr Veteran Member • Posts: 5,387
Pulling out of N-America?

Nobody knows what will happen, but one option is for JIP to pull Olympus out of some countries. Olympus has roughly twice the camera sales in Japan as they do in North America.

Pulling out of N-America wouldn't make sense. The only things that Oly does there is sell and support product. That brings in lots of revenue against very little cost.  The high costs of development, production and corporate overhead all lie elsewhere.

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Raist3d Forum Pro • Posts: 42,537
Re: Pulling out of N-America?
1

Danielvr wrote:

Nobody knows what will happen, but one option is for JIP to pull Olympus out of some countries. Olympus has roughly twice the camera sales in Japan as they do in North America.

Pulling out of N-America wouldn't make sense. The only things that Oly does there is sell and support product. That brings in lots of revenue against very little cost. The high costs of development, production and corporate overhead all lie elsewhere.

Well that all depends on the marketshare and the ROI with that marketshare. We know Japan is Olympus Imaging's biggest market.

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n3eg
n3eg Veteran Member • Posts: 3,217
Re: Signs of (Olympus) Life

Bassaidai wrote:

The other day, at the Olympus boardroom meeting...

"Guys, now that we announced clearance sale of the imaging department, we need to make sure to keep the stock markets happy... I'm up for suggestions..."

"Ah, we could express our will and commitment to the photo-community and deliver highquality...."

"SHUT UP, this will cost us way too much money, which we don't have. Also, we can't make sure to KEEP all those promises we are about to give..."

"Well, we could just update our lens road map. No obligations attached, it will seem like a sign of life, like we are really trying to push. Many months later those lenses somehow will just disappear on paper if JIB is not willing to follow up."

"EXCELLENT idea - lets update that lens road map and make sure the marketing department stirs it up massively".

Done.

Yeah, a webcam program that won't work with the E-M5 III (which still has no ability to save settings in Updater or Workspace, by the way), a very late attempt to catch up with Panasonic's 10-25mm lens, the zoom lens we've been hearing about forever, and the long long rumored 100mm macro.

Don't forget the "three cameras a year" promise.

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It ain't easy being me, but someone's gotta do it.

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Danielvr Veteran Member • Posts: 5,387
Re: Pulling out of N-America?

Pulling out of N-America wouldn't make sense. The only things that Oly does there is sell and support product. That brings in lots of revenue against very little cost. The high costs of development, production and corporate overhead all lie elsewhere.

Well that all depends on the marketshare and the ROI with that marketshare.

North America is still the second largest camera market after Europe. And again, most of the costs lie elsewhere when all that you have to do is sell and service those cameras - it's like harvesting without ever having to sow.

My back-of-an-envelope estimate is that you'd have to sell 10,000 cameras to recoup the costs of running a N-American sales operation. With some 2 million system cameras having been sold in N-America in 2019, that would equal a tiny .5% market share. Sell one more lens cap and you're turning a profit.

Note also that without those N-A sales, Oly would have to significantly lower its production, causing the per-unit costs of their cameras to increase a lot, making them less competitive in the remaining markets.

So, if Oly continues to develop and produce cameras, there's no way that they'll give up on the US and Canadian markets.

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justmeMN Veteran Member • Posts: 9,541
Re: Pulling out of N-America?

Danielvr wrote:

North America is still the second largest camera market after Europe.

On the other hand, only 16% of Olympus' camera revenue comes from North America.

Danielvr Veteran Member • Posts: 5,387
Re: Pulling out of N-America?

On the other hand, only 16% of Olympus' camera revenue comes from North America.

Your point being that they'd be better off without that 16%?
If not, what was your point?

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justmeMN Veteran Member • Posts: 9,541
Re: Pulling out of N-America?

Danielvr wrote:

On the other hand, only 16% of Olympus' camera revenue comes from North America.

Your point being that they'd be better off without that 16%?
If not, what was your point?

For Olympus, North America is a small market, and their expenses in NA are unknown. I wouldn't assume that that their NA revenue exceeds their NA expenses.

Raist3d Forum Pro • Posts: 42,537
Re: Pulling out of N-America?
1

Danielvr wrote:

Pulling out of N-America wouldn't make sense. The only things that Oly does there is sell and support product. That brings in lots of revenue against very little cost. The high costs of development, production and corporate overhead all lie elsewhere.

Well that all depends on the marketshare and the ROI with that marketshare.

North America is still the second largest camera market after Europe. And again, most of the costs lie elsewhere when all that you have to do is sell and service those cameras - it's like harvesting without ever having to sow.

The question isn't whether it's the second largest camera market but what marketshare Olympus has here, and whether they have the cash at the moment to pursue it. And whatever JIP wants to do.

My back-of-an-envelope estimate is that you'd have to sell 10,000 cameras to recoup the costs of running a N-American sales operation. With some 2 million system cameras having been sold in N-America in 2019, that would equal a tiny .5% market share. Sell one more lens cap and you're turning a profit.

Note also that without those N-A sales, Oly would have to significantly lower its production, causing the per-unit costs of their cameras to increase a lot, making them less competitive in the remaining markets.

So, if Oly continues to develop and produce cameras, there's no way that they'll give up on the US and Canadian markets.

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Raist3d Forum Pro • Posts: 42,537
Re: Pulling out of N-America?
1

justmeMN wrote:

Danielvr wrote:

On the other hand, only 16% of Olympus' camera revenue comes from North America.

Your point being that they'd be better off without that 16%?
If not, what was your point?

For Olympus, North America is a small market, and their expenses in NA are unknown. I wouldn't assume that that their NA revenue exceeds their NA expenses.

In fact, one could probably guess-timate that their expenses are bigger than their revenue most likely. Otherwise it would seem more unlikely that the Imaging division would be losing money right?   Given their much bigger market share relatively speaking in Japan and more control of it.

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cathal gantly Regular Member • Posts: 416
Re: Pulling out of N-America?

Danielvr wrote:

My back-of-an-envelope estimate is that you'd have to sell 10,000 cameras to recoup the costs of running a N-American sales operation. With some 2 million system cameras having been sold in N-America in 2019, that would equal a tiny .5% market share. Sell one more lens cap and you're turning a profit.

10k units sounds very low to me...

Staffing costs, estate costs, distribution costs, and the huge one... marketing costs!

If the sales operation had a profit per unit of $100 (they'd be lucky to achieve that!) they have a "profit" of a $1 million. Can they pay for all the above out of that?

Look, we don't know! There are ways of slashing costs. Switch to a direct model, sell direct from the factory online, use local country web sites as drop shipping operations. Trim back the product line... the PEN line has felt that. It's essentially the EP-L9 / 10 now, plus whatever remains in inventory to be sold. That leaves the OMD line which stands at four models. Three is probably sufficient.

Can Olympus move the market, or should they just react to the market? I honestly think that manufacturers need to offer a seamless, instant link between the camera and smartphone. The kind that once I turn my camera on it's talking to my phone if it's in range.

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Danielvr Veteran Member • Posts: 5,387
Re: Pulling out of N-America?

If the sales operation had a profit per unit of $100 (they'd be lucky to achieve that!) they have a "profit" of a $1 million. Can they pay for all the above out of that?

You're not looking at this from the manufacturer's pov. To them, the question is: Do we build (say) 400,000 cameras for EMEA, Japan and rest of Asia/Pacific, or do we build 500,000 and cater to the Americas as well.

The marginal costs at which those additional cameras are built are very low, I'd think around $125 each mainly in parts, labor and transportation. But they also help save money thanks to greater economy of scale.  So, to Olympus, a $1000 camera in N-America might represent a potential gross profit of closer to $900 if sold directly or $700 if through resellers.

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cathal gantly Regular Member • Posts: 416
Re: Pulling out of N-America?
1

Danielvr wrote:

If the sales operation had a profit per unit of $100 (they'd be lucky to achieve that!) they have a "profit" of a $1 million. Can they pay for all the above out of that?

You're not looking at this from the manufacturer's pov.

No, you are missing my point. A local market presence carries a cost associated with doing business in that market. Staffing costs, building costs, tax, marketing, support, etc.

To be active in the market it has to return a profit.

My view is more camera manufacturers will switch to a direct, on-line model for consumer cameras... high street retail, at least here in the UK, is being killed by high rents, rates and on-line competitors who have a lower operating cost.

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Danielvr Veteran Member • Posts: 5,387
Re: Pulling out of N-America?

No, you are missing my point. A local market presence carries a cost associated with doing business in that market. Staffing costs, building costs, tax, marketing, support, etc.

Sigh. Why do you think I arrived at 10,000 units? Which in your estimate would allow for only $1MM in operational costs -- don't you agree those costs look a tad more realistic when those 10,000 units bring in closer to $8MM?

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cathal gantly Regular Member • Posts: 416
Re: Pulling out of N-America?

Danielvr wrote:

No, you are missing my point. A local market presence carries a cost associated with doing business in that market. Staffing costs, building costs, tax, marketing, support, etc.

Sigh. Why do you think I arrived at 10,000 units? Which in your estimate would allow for only $1MM in operational costs -- don't you agree those costs look a tad more realistic when those 10,000 units bring in closer to $8MM?

The hard fact here is that neither you or I know the potential margin on each unit sold.

Getting a product onto the shelf is a costly exercise. When I was a Nikon user for example, I discovered that Nikon parent sold product to Nikon Europe. They had a margin. Nikon Europe sold to Nikon UK. They had a margin. Nikon UK sold to retailers. They had a margin.

Today, this type of structure isn't realistic or necessary. If I'm ordering online, direct from the manufacturer, why do I need a local presence? I don't. A dealer network in any product line (and I have worked in the motor trade as an example) adds costs that the end customer pays.

I think a margin of $100 per unit is generous to the point of being unrealistic. What do you perceive it to be?

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Danielvr Veteran Member • Posts: 5,387
Re: Pulling out of N-America?

Today, this type of structure isn't realistic or necessary.

Actually it is, but the regional and local presences are usually wholly owned by the corporation so it's irrelevant.

I think a margin of $100 per unit is generous to the point of being unrealistic. What do you perceive it to be?

Sigh, again. You are once more ignoring what I already wrote, so if you don't mind, I'll stop wasting my time here.

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