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Tuesday, 11 November 2008

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Yes said comments are hurtful, but with huge names being toppled in camera for the last 10 years, can we really expect the future to be much different? That's the stuff I really enjoy. As an old Yashica man myself, there is no crying over spilled milk, this market segment is brutal, cutthroat, pure warfare. Let's face it, Pentax and Olympus had a way better pedigree than Sony (and both are ginormous companies to boot) when it comes to (digital) cameras, and they got destroyed by Sony's clever marketing, sensor development, and Minolta purchase. Just think, if Pentax or Olympus or Panasonic could have bought Minolta, they would have kept Sony out of the market for years.

I for one laud Thom's predictions...he is hauntingly prescient when it comes down to it.

I've lost count of how many times Pentax has been predicted to fail.

They are still around.

Actually, the economic downturn probably will help Olympus (yes I am biased with an E3 and OM-4T owner): if you have some money to spend to get "PRO'ish" equipments but not enough to spend $3-$5K+ for a body, then the waterproof E3 makes a lot of sense.

And the colors. I hardly ever need to do color correction.

Ryan,
A camera store salesman once let me in on a little secret. He stage-whispered in my ear that Pentax was in trouble and about to go under. The news made me very sad. That was in 1982 or '83. I've probably heard the same prediction once a year since then.

As long as somebody keeps predicting it at regular intervals, one of them might be right someday.

Mike J.

I have already posted elsewhere that this reminds me big time of the many-times predicted death of Apple. And I won't need to explain anybody how successful is Apple in 2008. I give more details in my blog, but let me repeat the key point:

I don't believe a word from tech gurus' predictions. They can be, sometimes, real experts in their field. But it means NOTHING on their abilities to predict the future of any company. The world of technology is always changing, and a company that is about to fail today (i.e., Apple in 1996/1997) can become an extremely healthy and powerful company ten years later (i.e., Apple in 2008). Against all predictions.

So I co-sign Mike's comment: Pentax has been dying many times, according to experts & gurus. But still they keep on make terrific cameras, compatible with their huge legacy of lenses, and receiving praise from many serious photography lovers.

Factual facts and future predictions:

We all are going to die.
Every bussiness is at some point going to close or move.

The Large Hadron Collider will cause a blackhole situation, and then all of us die.

The arrival of digital stereoholographic ultrarepresentational devices [DSUD] will cause the death of Nikon, the purchase of Leitz-Leica by Kyocera, and the purchase of Canon by White-Westinghouse.

Pentax will be the greatest dishwasher company of the world.

PS:

I forgot:
Dinosaurs will become extinguished.

Mike, even a stopped clock is accurate twice a day. :-)

As to the predictions, I usually disagree with Mr. Hogan's predictions about Olympus. Yes, I'm an owner of an E-3. And E-300. And E-1. AND a C-5050.

But, if you're writing about a company, at least try to LEARN something about it. Case in point: "At the high end, Olympus' E3 will be staring down four or more 20mp+ DSLRs." Olympus very distinctly said they won't compete in that part of the market. Won't.

So now, will I look for Olympus competition where you have to shell out $3000-$8000 for a 20MP+ or will I look at the mid-level tier where cameras cost $1200-1600? Um, I really don't know...

Nikon a camera company only? Doesn't Nikon also make the steppers that are used to make the chips that go into digital everything? And eye glasses? And all sorts of other optical equipment?

Similar story for Olympus and Pentax.

Nikon won't go away that easily. Nor will the other remaining camera makers.

"...end of the camera-only companies..."

Good point about Olympus. I should have written "camera-dependent" companies, and I'll fix this when I get a chance.

"Olympus very distinctly said they won't compete in that part of the market."

But that's my point. Olympus has made a decision to be a niche player, not a full line player. Moreover, their current niche isn't growing, nor is their share of it.

"...Pentax has been dying many times..."

I'd say that there have been two strong collapses in Pentax's past, where they simply stopped keeping up with the Joneses. The difference this time is that the decisionmakers are different, and the parent company priorities don't align with wanting to keep a legacy alive for more personal reasons than business.

"...he is hauntingly prescient..."

Hard to disagree with a compliment, but I will ;~). I spend a lot of time watching trends. Trends can be reversed, which is why I'm often wrong, though it usually takes something big and unexpected to reverse a trend. But trends are easy enough to map that anyone looking at the information should be able to see it.

"...said comments are hurtful..."

The dilemma of a commentator is that sometimes they become part of the landscape they're commenting on. However, I do not believe that my writing is read by enough people to cause any change in buying habits. Moreover, anyone paying attention can go look at my previous predictions and outcomes and see that I'm not nearly good enough to take my comments to the stock market ;~). I invite everyone to go back and re-read the final paragraph of my predictions.

"...nowhere near as vulnerable as Nikon or Pentax..."

Nikon makes more than half of its sales from imaging now, which, I suppose, makes them "vulnerable." But first we'd have to see evidence that they're doing something wrong to TRIGGER that vulnerability. If you look at their last quarter results, you'd come to the opposite conclusion.

There's a wild card in all of this: look at the Circuit City bankruptcy and look at who's owed money. Nikon and Olympus are both one of the top ten creditors, IIRC both around the $15m mark. Now look at what that means to the imaging results for both companies if that money never gets paid. Vulnerability extends to a lot of small nooks and crannies that aren't immediately obvious.

The first time I read it I, characteristically, skipped right to the Nikon lens predictions. A new 28 and 85 would be fantastic; even just one of those would be great news. But I won't hold my breath. He did also predict yet another DX consumer zoom, after all...

"Finally, a word about my predictions. I write these to be provocative; to generate discussions about the health of the companies whose products we use and how they might best serve us in the future." Thom Hogan

I believe that Thom has somewhat succeeded

Nikon's a fairly large optics company and not going anywhere, Pentax got swallowed by Hoya a while back (And like Oly, is also a player in medical imaging).

The thing is that Olympus does rely heavily on their camera business and their products, while excellent, are distinctly at odds with the direction the market is moving in the most profitable area (DSLR's). 4/3rds is a dead mount walking and while I suspect m4/3 will be successful, at least short term until similar mounts with larger sensors start showing up, m4/3rds is also likely going to eat 4/3rds sales by doing 4/3rds only strength(small size) better than 4/3rds does it.

As to the 'Staring down 4+ 20MP cameras), well it's true that the E-3 is distinctly cheaper than those bodies the same does not apply when you start pricing pro-level zooms as well as the bodies, that $1000 price difference starts to evaporate (especially comparing against Canon, which has comparatively cheap f2.8 L zooms available, the price difference between a 24-70L and a ZD 14-35 f2.0 is around the same as the price difference between a 5DmII and a E-3). And even at the E-3's price point (competing against the 50D and D300), the E-3 is in most ways clearly outmatched (Speed, IQ)

Let me be the first to roast Philip Storry...nah, I won't :-) I'm not going to delve into the accounting of Pentax for the first fiscal quarter of blah blah blah, but I will mention that Pentax also has a medical imaging division and as far as I'm aware, cameras are a small chunk of their revenue. As such, they're in the same category as Olympus. Whether being a small piece of a large conglomerate is a good thing or not in the current economic climate is beyond my predictive capacity.

One thing I will point out is this: Imagine you're a new customer wanting to invest in some serious equipment but you're worried about the economy. Are you more likely to spend nearly $2000 on a sealed body and $3000 on a couple of image-stabilised zooms from C. or N., or are you more likely to spend $2300 on a K20D + DA* 18-50mm f/2.8 + DA* 50-135mm f/2.8? What other company offers you a weather-sealed, image stabilised, SDM capable, high-resolution pro system for such a low price? I am NOT worried about Pentax's future.

And if Pentax does cave in, does that mean my cameras will stop working and all Pentax lenses will disappear from the marketplace? This morning on my way to work I took some pictures with a Pentax SuperProgram and Pentax-A 50mm f/1.4, equipment from the mid to late 80s. People are still shooting Minolta cameras and lenses. Which brings me to another point (made often by Justin Serpico on p-net): If Pentax dies, the K mount will live on through another brand (Samsung, maybe?), just like Minolta's mount lives on through Sony.

But hey, all this chit-chat is getting Thom some good hits on his site, so mission accomplished :-)

I see that it has already been mentioned that Nikon is not primarily camera company only, but that goes double for Canon.

Cameras and are only 27 percent of Canon's sales

http://www.canon.com/ir/chart/03.html

Strange bedfellows are those companies which manufacture photographic equipment and
produce other optical instruments as well. Canon leads the game as has been noted;
maybe 30 percent is photographic, Pentax, Olympus and Nikon all do other things, mostly
microscopes in instruments for the optical industry.

It is likely if any one company is sold, it will be the non-camera assets which will be the determining factor to buy.

Professional markets tend to be careful on what and when they buy, the photographic market tends to be uncertain. Sony/Minolta
at least here in Canada seems to be doing well, however I hear horror stories of the lack of build quality and major warranty and replacement issues. Sony looks on cameras as another consumer product, and gives it
little attention. Panasonic has other
money elsewhere and I suspect it too is in it for the money. Long term I would count Sony and Panasonic out of the field in a few years.

Short term, Pentax and Hoya, a& yes, Olympus ditto Nikon and Canon.

And while we are talking, was first a Pentax man then Nikon then back to Pentax and then Nikon, now a D80 to go along with the F100 obtained new for C$400.00. Ironically have picked up in the last while a pair of rebuilt K1000's with 50 mm f2.0
lenses as well as a 135mm telephoto and
every ready cases for each, all for the same price as the D80. Yes the D40 was sold for C$300.00 cash with the bythom compact disc for instructions.

I might add the auto focus and auto toys now available to us in the industry are great however there is something too about the all-manual being of a K1000 Pentax film camera. You have to think, for the camera!

I started reading Thom quite a while back, and find that he's generally thoughtful and knows what he's talking about -- he's just not always right. He's making predictions, not proclaiming certainties, and has in the past done "scoring" columns in which he recaps his predictions, and points out where he was wrong, as well as right. That's not something you see every day.

I've taken some heat from Mike J. and others for dissing the Sony A900 without having used it. My attitude developed out of several things mentioned in these comments. I don't believe that great technology just pops up; there's almost always a long period of development. So Minolta wasn't competing well on the digital front, is bought by Sony, and suddenly Sony/Minolta produces a 24mp camera that is supposedly at the cutting edge. I didn't believe it, and still don't, though I freely admit that it's a good camera in a limited way.

What I believed was that we had this sudden development more because of *marketing* than technology. Sony has always been good in consumer marketing (although they've faltered somewhat the past few years) and it appeared to me that the A900 was probably the last iteration of the "More (pixels) is better" marketing syndrome. Nikon supposedly has had 18 through 24mp cameras being tested for at least a couple of years, but they haven't been released yet, probably because they weren't good enough. They didn't have a high enough resolution/ISO goodness. Sony, I suspected, simply said "Screw it, we can sell the camera that has the most of something." And now, according to Thom, they're the #3 camera maker and most of that, I think, was based on brand recognition and the 24mp hustle.

As for Olympus, they are a good but idiosyncratic camera maker, that specialized in making high quality equipment that was *different.* But back when, when everybody used film, you could make a design mistake without doing too much damage, because you were basically talking about light on film, and all the film was the same and Olympus lenses were great. With a permanent sensor, however, Olympus was forced to make a choice that they couldn't retreat from, and IMHO, they chose wrong. Unless there is some spectacular, unexpected development in the technology, a bigger sensor will always be better than a smaller one, and Olympus is stuck with a line of bodies and lenses that won't cover FF, and that will eventually sell for the same price as FF, but with poorer sensors -- because the sensors will eventually converge in pixel goodness, with the determinant of ultimate quality being sensor size. The micro-4/3 might save them, because it seems that there might be a solid market for a very high quality, but Leica-sized camera. I own an M8, and I'm not convinced that the winner here will be Leica. Maybe Olympus could take this niche.

The shape of the camera world for the rest of this century will be determined by marketing/tech games being played out right now, IMHO, and it's fascinating to watch.

JC

I had a colonoscopy on Monday, with Olympus gear, of course. Everything was fine, but I wouldn't know if it hadn't been Oly ... I would have told the doc to reschedule when they got Oly gear in house.

Seriously, I disagree with Thom (Hi Thom ... Earl here, formerly from the OM list) ... I think they have their game figured out as well as anyone can in the current economic climate.

I agree with the person who said the m4/3 will be more important than 4/3, but I think m4/3 will prosper because the image quality will be more than good enough for those who want an RF-style camera. Whether Oly will produce the fast primes we prefer is an open question. I suspect not, but someone else will. The wide end will be biggest issue in that regard. If someone can produce a 14/2.0, all will be fine.

I think buying and selling companies [or divisions] has become far more difficult the last few months. If you have to borrow, you can't get the capital, if you have it, you may be better of sitting on it. And companies may now think some diversification may not be so bad after all.
So unless a camera maker really goes under, they may have to soldier on. But there will be a further contraction to [smaller] niches by all but the top 3.

Thom,

Thank you very much for dropping by!

Despite what I wrote that disagreed with you, I sthink it's important to remember that I do agree with some things you said.

Not with everything, of course, but I think we could have an interesting conversation over a few drinks if you weren't several thousand miles away. (But if you pass through London, I'll stand you a pint or a dram if you've the time!)

You said "But that's my point. Olympus has made a decision to be a niche player, not a full line player. Moreover, their current niche isn't growing, nor is their share of it."

On the other hand, throwing money into competing against Nikon/Canon/Sony in the full-frame arena would be foolish, and likely bankrupt them.

Olympus instead chose to go with a sensor size only just smaller than APS-C, with a more efficient aspect ratio for lens design, and to make a range of high-quality lenses matched to that sensor.

Five years ago, people said that it was a brave experiment that was doomed to failure, and that the E-1 would be the first and last Four Thirds camera. Then again, they were also saying Pentax would die...

Ultimately, I see Olympus as being like Nintendo - they're focused on producing good products at decent prices (including a decent profit for themselves!).

They're mostly producing photographic Gamecubes at the moment - good kit, which has sold well but not been taken seriously by the "most hardcore" industry folks.

Micro Four Thirds may be their Wii, or it may be just another Gamecube. Either way, I doubt Olympus will lose much money on it, nor that it will be a bad bit of kit.

I hope Olympus carry on, much as I hope Pentax and Sigma survive. In my ideal world, Canon/Nikon/Sony would put their money where their marketing department's mouths are, and abandon the poor man's APS-C for the high quality green fields of Full Frame. (Which, we are reminded, will be affordable next year, just after Pentax die.)

As it stands, APS-C is actually all most people need, and is a huge market which is quite profitable. So that won't happen.

In which case, I see Sigma remaining a niche player that most people associate with lenses only. I see Pentax continuing as a niche, and Olympus being the fourth position player now that Sony have arrived.

A mere eighteen months ago, Pentax/Olympus/Panasonic all wanted third place - Sony's entrance has made that nearly impossible.

Panasonic seem to want to retreat into Micro Four Thirds, changing the market rather than competing against the incumbents. Micro Four Thirds requires considerable electronics expertise, and I'm not sure Olympus can match Panasonic there. Indications are that Panasonic may not have shared their autofocus secrets with Olympus, which is why Olympus are lagging in this area.

I suspect that Olympus won't be as successful as you think they will be in Micro Four Thirds, and that they'll let Panasonic have that particular cake and hope to sell lenses and perhaps get "upgrades" to Four Thirds - especially for anyone wanting longer focal lengths, which I think will be the weak spot for Micro Four Thirds.

Gosh, that started to ramble, didn't it?

A good bit of information on the Circuit City creditors, by the way - thanks. That helps me get a new perspective on things, and will no doubt change my mind once it finally sinks through my thick skull!

Now what I think we need is to get rid of a few thousand miles and get some drinks beside us... ;-)

Well, so here you have it - several rather big photo gear companies and you have to write a forecast... Without disrespect, but evidently to write something that will attract attention you need to predict some kind of doom, even on minor scale. Why not to choose Pentax, if Pentax has been predicted to doom once or twice in the past?

Yes, Pentax, having stopped being a family owned private business entered the murky waters of modern slash downs, work force cuts and what not. But then, anyone can make a fatal mistake, whose effect will not be immediate.

What if in 5 years it will become evident that Nikon's decision to introduce merely 12 MP full frame bodies while both Sony and Canon are going 20+MP was fatal. It is because these few decisive dollars wouldn't be there in the hour of dire need? And frankly, I doubt that any one can reasonably well *predict* what is going to happen given the context of current world economy crisis.

Again, no disrespect, but I think that predictions of this kind are somewhat overrated by the reader public and thence overreacted to.

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