The Online Photographer

'Superzoom' Sales Soar

Sales of fixed-lens compacts (a.k.a. digicams or digital point-and-shoots) began to decline in 2009 after years of growth, and fell 11% in the U.K. last year alone, according to a new study by GfK Retail and Technology. This is attributed mainly to inroads being made at the low end of the market by smartphones. However, according to the study, the decline has been accompanied by a 50% surge in U.K. sales of "superzoom" compacts—cameras with small sensors and lenses with zoom ratios than exceed 10X.

Examples: the Nikon Coolpix L810 (above) or the Panasonic Lumix ZS20, which have 26X and 20X lenses respectively. Fixed lenses with such extreme zoom ranges are only possible on cameras that have tiny digicam sensors—the Nikon's in this case is a 1/2.3" (4.55x6.17mm) and the Panasonic's is similar, a 1/2.33" (4.56x6.08mm).

Superzoom compacts are most useful for those who do a lot of their shooting in daylight—especially those who like to shoot typical "long lens" subjects such as animals, or sports from the sidelines.

Mike

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Featured Comment by Marc Probst: "I always thought the main market for superzooms were men who wanted to photograph semi-naked women on the beach from afar...."

Featured [partial] Comment by Marc Rochkind: "Not too hard to see why this makes sense...these cameras do what phone cameras can't."

Featured Comment by Polo: "Olympic Games?"

Featured Comment by Ray Anderson: "I'm an artist (in very realistic watercolor), and I use my camera as a 'sketchbook.' My camera of coice has been a 'superzoom,' because it gives me flexibility of image capture without the neck-breaking weight of a DSLR system. The model I use, and that is still coveted by some people (look at the present price at Amazon!!), is the Panasonic Lumix DMC-FZ35. Very good image quality for a small sensor camera!"

The Echo Box

In a rather annoying trend, discrepancy seems sometimes to be widening into direct contradiction in the news. In our recent gubernatorial recall election, one side was trumpeting that Wisconsin had added 30,000 jobs, and the other side was advertising that Wisconsin had lost 30,000 jobs. Which was it? The "traditional" media, which is growing increasingly scarce here and increasingly biased, were not much help.

So here's the news: either Panasonic will be investing 30 to 50 billion yen in Olympus, or it won't be!

Isn't that exciting?

Of course, I don't know. I haven't done any original reporting, personally. I'm just a guy sitting in a little house in Wisconsin. I don't speak Japanese, and I don't have the phone numbers of the CEOs of Olympus or Panasonic in my "Rolodex" (I assume "Rolodex" is now a vestigial term, like "dialing" a phone). As we usually do with such industry news, I reported a report, namely, I parrotted what the Japan Times said. Imaging-Resource repeated a different report, from the subscription-only Kyodo News Agency. Well, I think it's a different report, unless the the Japan Times got the report from Kyodo News Agency too, which might be what the word "Kyodo" in small type under the title of the article indicates. So who's echoing whom? Who got the news, and from where, and who (else) is just repeating something they heard?

Olympus immediately issued a very vaguely-worded denial, which might or might not be referring to the reports about Panasonic. But then, they're doing that a lot these days. If someone issued a report that clear skies above Tokyo appear blue, Olympus would issue a statement that said "Certain sections of the media have reported today that the skies over Olympus Corporation (the 'Company') are blue. This is not announced by the Company. The Company will immediately disclose any further important information when it comes to light."*

Reuters, which seconded the "yes" side on Tuesday, yesterday contradicted the report, saying the President of Panasonic was overheard by a waiter at dinner saying nope, 'tain't true (except in Japanese). Okay, not at dinner, and it wasn't a waiter:

"I don't know where that information came from, not from us," [Panasonic President Fumio] Ohtsubo said on the sidelines of a meeting of the Japan Electrical Manufacturers' Association. "There isn't any," he said when asked if Panasonic had a plan to invest in Olympus.

So there you have it. Might be news, might not be; might be true, might not be; might be announced later this week, when Olympus issues an expected report; might prove to have been a rumor. The world continues to need more reporters and fewer echo boxes, and I'm not chuffed that I'm part of the problem. At least when I want to know what color the clear sky is, I can look out the window and give my own report. (Blue.)

Mike

*Note that that last sentence actually means, "The Company will not disclose any further important information when it comes to light." I'm just sayin'.

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Featured Comment by Francis Harrison: "I'm in Tokyo and yes, the story is accepted as fact here. Remember also that Fuji was at one point considering buying either Leica or Olympus. (Outright...?) Heady times. The takeaway for me: in spite of some horrendous corporate behavior going back at least two decades, Olympus technology and products, whether they be consumer cameras or endoscopes, are highly regarded, making Olympus a very valuable entity regardless...."

Panasonic to Bankroll Olympus

The two major Micro 4/3 partners will soon become much closer, reports The Japan Times.

Pansonic will bolster sagging TV-set earnings by providing between 30 and 50 billion yen (approx. US$378–631 million) to Olympus, in return for shares issued in a private offering.

Some Olympus executives had wanted the company to remain independent, but that proved not to be feasible. Panasonic was evidently selected because Olympus is eager to partner with it on business and product initiatives, apart from the infusion of capital. Spurned suitors include both Sony and Fujifilm, both of which made offers to form business alliances with Olympus.

Mike
(Thanks to Mike Hagburg)

UPDATE June 7th: Or, maybe not (thanks to NikoJorj for this).

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Fujifilm Confirms It Considered Buying Leica, Then Olympus

Shigetaka Komori (right), President and Chief Executive Officer of Fujifilm, in a frank and revealing interview in the German Frankfurter Allgemeine Zeitung (a.k.a. the FAZ), confirmed that Fuji considered buying Leica when it was for sale; however, that would have resulted in putting the guts of Fuji cameras into Leica shells, so he thinks it was an honest decision not to go in that direction.

He also confirmed that Fujifilm made an offer to purchase or partner with Olympus in the wake of the latter company's recent difficulties, but it appears that Olympus prefers to remain independent. He spoke about how the high yen is making it difficult for export-oriented Japanese companies such as Sony, Matsushita and Olympus (and by extension, his own company). He said Fujifilm would have found it easier to buy Olympus if it had not been a publicly traded company with two large Tokyo banks behind it (Tokyo Mitsubishi and Mitsui Sumitomo). Had Olympus been delisted from the stock exchange, things might also have gone differently.

Fujifilm has had a run of great success in the camera market of late, with the X100, X10, and X-Pro1 all greatly exceeding expectations. Fujifilm is also expanding into cosmetics and pharmaceuticals.

Mike
(Thanks to Gerry Morgan)

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Olympus Shareholders Approve All-New Board

Photo: Olympus

An angry, tense, and sometimes contentious shareholders' meeting, convened in the common room of a Tokyo hotel Friday (yesterday in Japan), began with Olympus officials and board members bowing deeply to the shareholders in the traditional Japanese gesture of apology.

All 11 current board members resigned, and were replaced with successors they had picked. Hiroyuki Sasa, 56, is the company's new president. Yasuyuki Kimoto, 63, takes over as Chairman. Kimoto is a former executive at Sumitomo Mitsui Banking Corp, Olympus's main investor. Another banker became a director. Foreign investors feel this is a conflict of interest, worried that the new management will make decisions advantageous to Japanese creditors at the expense of the recovery and long-term viability of the company. Olympus rejected these criticisms, noting that six of the new directors have no connections to the banks.

Former CEO and whistleblower Michael Woodford, who was in attendance, demanded to know why he had been fired. Officials failed to give a substantive answer. Some shareholders still wanted him to resume leadership of the company, but that effort was rebuffed. It is believed that the priority for most shareholders is to see the share price recover.

Three former Olympus officials have been arrested and charged in connection with the scandal, which alleges massive accounting fraud.

Despite the highly unusual tenor of the meeting, described by one newspaper as "raucous," Olympus shares rose 6.4% in the aftermath.

Mike

Disclaimer: Yr. Hmbl. Ed. is a former OM-4T user and has plans to buy an OM-D.

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Does Photofinishing Have a Future?

By Ctein

Last summer I wrote "Minority Report," in which I observed that it was tougher these days to figure out exactly what kind of photographs people were making and what they were doing with them. Not impossible, not in the least, just that we had lost the easy tracking that film provided.

I didn't really get into it at the time, but if you had asked me what I thought was happening to printmaking, I would've guessed that it was probably on the decline. Nothing precipitous, just that the huge increase in the number of photographs that people were making digitally wouldn't compensate for the declining percentage that were being turned into prints. The conventional wisdom, after all, is that digital pictures are the e-slides of our era, photographs that are made to be viewed but hardly ever made to be handled.

About a year back, in fact, there was a widely cited article that described the photofinishing industry as being one of 10 industries that was on "life support." From one business perspective, it was true. The number of people working in photofinishing labs has steadily declined starting in the second half of the 1990s, long before the digital revolution ate film's lunch. One-hour minilabs popping up in every chain supermarket and drugstore eroded the dedicated photofinishing businesses. Come the digiterati and the rise of the online printing services, the big-box stores' in-house photofinishing, and home printing (not that important, dollar wise, but it takes its bite), and employment in the industry is down by 50% from its peak and will continue to drop.

That's bad news if you're a photofinishing employee or own a lab. It turns out, though, that it leads you to the wrong conclusion about printing in general. It's not dying.

It's on the rise.

In fact, it's risen every single year, with the exception of 2009-10, where there was a modest drop which more than got made up in 2011. It's a mixture of services and products: online printing services, self-service kiosks in supermarkets and drugstores, traditional photofinishers, and new products like calendars, greeting and personal note cards (those are really big growth items), online-printed albums and small books. As well as your usual small prints.

Today that's all part of photofinishing, as the purely digital printing processes, almost entirely inkjet, supplant the traditional RA-4 wet papers. Those are still major items, but the chromogenic print volume will decline and fade into insignificance. (Honestly, photofinishers have been looking to replace it for more than a third of a century, I can tell you from first-hand knowledge.)

Photofinishing as a whole is currently a growth industry, especially the totally digital side of it. Whodathunk?

When Kodak announced that they were going to continue to deemphasize and discontinue traditional photo materials and processes in favor of inkjet materials and printers, it was much decried as an act of foolish desperation by a dying company that would only hasten their demise.

I do think it was an act of desperation, and I am not remotely convinced that Kodak has either the resources or the managerial smarts to get themselves out of the rather deep hole they find themselves in. Foolish, though? I think Kodak identified one of the few industry segments where they have a realistic chance of making real money. At least over the rest of this decade. (Beyond that, who knows? The digital revolution is still far too much a work in progress for us to have any idea what the long-term looks like.)

Let us not forget that Kodak has always been mostly a photofinishing company. That was its initial model for success. "You press the button, we do the rest." Think about it. Most of its product expansion throughout the twentieth century was in an effort to establish horizontal and vertical monopolies around that business.

Be that as it may, the counterintuitive situation in the photofinishing world demonstrates how trusting one's instincts and hunches in the absence of concrete knowledge is a perilous endeavor. Often that's all we have to go on. Doesn't mean we'll be right.

Ctein

Ctein has reported on the photo industry for numerous publications over several decades. His regular weekly column on TOP appears on Wednesdays.

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Focus on Imaging: Show Report

The crowds at the Canon booth are constant....

...And at the Nikon booth too.

By Robert D. Phillips

For any U.K. readers eager to get their hands on some of the new camera releases, Focus on Imaging at the NEC in Birmingham is running until 5 p.m. this Wednesday, March 7th.

Canon are* using the show to launch their brand shining new and eagerly awaited 5D Mark III, and the stand is crowded from the 10 a.m. opening till the end of each day with people playing with the five or so examples they have on show. People seem to like it. I overheard the fashion photographer Perou, who has some photographs on show at the Focus Gallery at the hub of the hall, tell the CPS** rep, "You don't need to sell it to me—I will definitely be getting one." Or at least it was something very similar to that....

Nikon are finding it hard to keep up with demand to play around with their D800 as they only have one example in the country. The queues to try it out are daunting, like being at a crowded bar trying to get the eye of the barman. They are making up for it by having what is apparently the largest LCD in Europe serving as their theatre screen.

The Olympus stand is a small catwalk which is OM-D branded, and has been showing an alternating schedule of dancers, models, and photographers talking about the new miracle camera. As was mentioned in TOP, the actual camera is a lot smaller than it appears in the product shots, but it feels good in the hand and makes a very satisfying old-school shutter noise/feel when used. There are only two OM-Ds here, but again, people seem to be liking the camera.

Similar story over on the Fuji stand, where there is only one version of the lovely new X-Pro1. This is a piece of retro art—it looks and feels in the hand like a "proper" camera of old, and Fuji seem very proud of it, rightly so in my opinion.

Sigma are being even more coy with their new 19mm and 30mm ƒ/2.8 4/3 lenses—the sole examples of each are pre-production mock ups which stay firmly in the cabinet. Certainly tempting the desire though.

It is nice to see a pretty strong presence from Ilford at the show. Pushing mainly the new InkJet papers, they also have a strong film presence which is nice to see. Any visitors to the show can have their photo taken with an 8x10 camera loaded with an Ilford paper negative, which is then contact printed into a positive and is yours to take away after 20 minutes.

The Nova Chrome stand even has an enlarger on show!

All I want for Christmas....

I would say that the show is a must for any serious gearheads finding themselves near Birmingham, England over the next few days. Everything you can imagine, from the awesome Phase One 80MP outfit, right down to the eyecups and LCD loupes being sold by brothers Lou and Bob over all the way from L.A. CA. "We all but sold out by the end of day one" said Lou, with a big California smile. "So now we are just taking orders."

All the way from L.A.: Lou and Bob from Hoodman

Focus On Imaging is in Halls 9 and 10 at the NEC Birmingham until 5 p.m. Wednesday, March 7th.

www.focus-on-imaging.co.uk
@FocusOnImaging

Robert

TOP reader Robert Phillips, who you've encountered before in these environs, is filling in at the Focus on Imaging press office this week.

[*Company names are treated as plural in British English. A U.S. writer would say "Canon is." I've left the author's native Britishisms in place because it seems appropriate—in the way that Ailsa McWhinnie used to leave my Americanisms alone in my U.K. Black & White Photography magazine column. —MJ]

**Canon Professional Services, Canon's limited-membership support organization for Canon-using professionals.

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Featured Comment by Mark Cotter: "I was at Focus on Imaging on Sunday and managed to get my hands on all of the new cameras that interested me—Canon's 5D Mark III and the 1Dx, the Olympus OM-D, and the new Fuji X-Pro1. Being a Canon user, the new models are very nice but didn't wow me. The OM-D was a disappointment. Yes, it's a very nice camera but it's too small for my liking: it needs the two grips to make it useable. Perhaps, being an OM-1 user for my film work, I just prefer the size of the original. The Fuji line was outstanding. I'm in love with the new Fuji X-Pro1. Possibly, the nicest camera I have handled in quite some time."

Right Back to the Bad Old Days for Olympus?

It's the eternal problem with takeovers: who takes over? And, as George Orwell so tellingly observed in his tale about the pigs (his famous critique of Stalinism), what if the new regime becomes as bad as the old...or worse?

It's a problem Egypt is struggling with right now. Mubarak is gone; long live...?

Here's an article that synopsizes succinctly what some of Olympus's non-Japanese investors fear might be happening with the "clean sweep" of the Olympus board of directors slated to happen in April. They're worried it won't be so clean. Large Japanese banks, wielding power as both creditors and investors, are allegedly trying to stack the board with officers loyal to them. "As far as we're concerned, the Olympus board would then be de-facto creditor-controlled," the principal of Southeastern Asset Management, one of the two largest non-Japanese shareholders of Olympus, told Reuters.

I just found this curious because it's exactly what Greece is worried about, if you've been following that crisis—that it's going to lose its autonomy and become creditor-controlled.

So far, Olympus's camera division is steaming along happily just as if the financial scandal and leadership crisis wasn't happening. But a creditor takeover would make its future even more vulnerable than it already is.

(Makes me more eager to eventually get an E-M5. I'm all about enjoying good things while you still can.)

Michael Woodford, the fired whistleblower CEO who had to give up his bid for a triumphal return when it became clear the big Japanese banks wouldn't support it, told Reuters, "if it is true...then we are going back to the bad old days."

Back to the bad old days. Same old same old. Sweep out the bad...and, possibly, make way for the worse.

Mike

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Former Olympus Executives Arrested

The New York Times is reporting this morning that three former leaders of Olympus Corp. were arrested by prosecutors yesterday in Tokyo, "on suspicion of violating the Financial Instruments and Exchange Law." Taken into custody were Tsuyoshi Kikukawa,  Hisashi Mori, and Hideo Yamada. Although all three have resigned, Kikukawa was the President and Chairman, Mori Executive VP, and Yamada the coporate auditor when the scandal, which has had repercussions nationally in Japan, broke sensationally last October. Also arrested were several bankers implicated in the complex cover-up of large losses dating back decades.

We haven't reported every development of the Olympus case here, because I haven't wanted to turn TOP into "the Olympus scandal blog." However it looks like the new beginning is slated for a shareholders meeting on April 20th, when a number of Board members will step down and a new Chairman will be named.

...Unfortunately it also looks like the endoscope side of Olympus's business is sound, whereas it's the camera division that's being blamed for corporate losses. That means the camera side is exposed to possible, er, changes during restructuring. We'll keep an eye on the company's progress and plans in the months to come.

Mike
(Thanks to Rob Atkins)

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Priceless Memories

I've heard, read, or received some wonderful Kodak stories in the past 32 hours or so, many positive, a few negative, and some just so "Kodak" they're funny. One that made me laugh came in as a comment from Hugh Crawford:

I spent two days trying to buy some Kodak film, 70mm Pan-X. I got shuttled around between the Pro Sales, Industrial, Government, and Aerial Photography departments. The only people who could sell the film were in Aerial Photography Sales or Government Sales, but Government Sales had to have a government purchase order (cash was no good), and Aerial Photography Sales couldn't sell me film unless I had a some sort of FAA certification, because, in theory, the camera the film was for was part of an airplane and, if you were installing the film in the camera, you were doing maintenance work on the plane and had to be a pilot or an aviation mechanic.

Heh. That's Kodak, all right.

I had a trick that worked for me when it came to prying information out of Kodak employees—I'd wait until about 4:45 Rochester time on Friday afternoons to call. People were ready to go home, anticipating the weekend, feeling relaxed, and sometimes they'd let their guard down and let slip a little tidbit of information. Nothing major, mind you—just a little more than they would have told me any other day of the week. I got one or two nice nuggets that way.

I remember once I had a certain technical question for Kodak that was a bit delicate because it glanced obliquely at proprietary secrets. Again, nothing big—just something about an ingredient in a print developer or something like that.

I placed several calls and no one knew the answer. Rather than get frustrated, I just decided that just that one time, entirely as an experiment, I would dispassionately pursue the answer as diligently as I could—just to see how much work it actually took to pry the information out of Kodak corporate culture, which was, truly, very formidable in its time.

A number of calls and a day later, the glimmer turned to a glow that yes, there was one person who did know indeed the answer. A few more calls lead me to that person's actual name (victory after victory). It took several more calls over several days before I finally got to talk to him. My heart was beating a little harder than normal as his assistant put me through.

He was very polite and mild, but clearly being cautious. He explained that he hardly ever talked to anyone outside of Kodak. I posed the question to him, and he qualified the state of his knowledge of the answer. Eventually we decided that, yes, he did indeed know what I wanted to know. And, yes, he could tell me.

But then—right as he was beginning to spill the beans—he stopped short. "I'm not entirely sure I have the authority to tell you this or not. I don't know that I don't. But I don't explicitly know that I do." Or words to that effect.

We spent several more minutes discussing whether there was anyone with the authority to give him permission to tell me the answer, and, if there was, who that person might be. After considerably more thought, he decided he didn't know who that person was, but he had some ideas. I couldn't get him to give me names so I could continue on my quest from my end, but he promised he'd look in to it and get back to me.

Never heard back, of course. Game, set, and match, old Kodak.

Mike

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Tokyo and Tel Aviv

With new 35mm-form-factor cameras about to be nipping at their heels more ferociously than ever, Tokyo-based medium-format cameramaker Mamiya and Tel Aviv-based digital medium-format back maker Leaf have joined forces to form a new brand.

The beginning of the press release says pretty much everything you need to know:

New "Mamiya Leaf" Brand Delivers Strong Worldwide Synergy

Companies Integrate Products, Consolidate Worldwide Support, Service and R&D

TOKYO and TEL AVIV, January 16, 2012—Mamiya Digital Imaging, a trusted manufacturer and developer of medium-format cameras and optics, and Leaf Imaging Ltd., a leading manufacturer and developer of digital backs for the medium and large-format photography markets, today announced that they have created a new, worldwide Mamiya Leaf brand that integrates both companies’ product lines into one complete medium-format digital camera system offering, streamlines new product development and establishes more efficient customer sales and support.

The new Mamiya Leaf brand represents a synergy of the best that these two companies can offer as highly competent suppliers of comprehensive, fully-integrated high-end digital photography systems comprising digital camera backs, bodies and lenses. Together, the companies are focusing on delivering new Mamiya Leaf camera systems. Unified support from worldwide Mamiya Leaf partners/distributors is also expected to be a major advantage for photographers; they will now be able to enjoy one-stop expert service for all of the various components of a Mamiya Leaf medium format digital camera system.

Naturally, there's a website.

Mike

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Featured Comment by Oren Grad: "At least in the United States, this announcement raises more questions than it answers. Phase One, which controls both Mamiya and Leaf, has been grappling for many months with the problem of how to position the two brands. This is at least the third different branding/marketing identity for Mamiya in the U.S. over the past year.

"Now they've redirected the mamiya.com website to the existing, partially-baked Leaf website. All the information about legacy products—including all film cameras—is gone. Are they dropping them? Is there still support of any kind? No way to tell.

"The Leaf website is designed to channel all inquiries via email or the existing Phase One support forum—I can't find a phone number any more. Is the intent to sell high-end products while forcing all direct support to go through dealers? That's a possible strategy, but, if so, they need to be clear about it.

"And so on. Until they explain more, this feels like a big step backward."

Featured Comment by Will: "Mamiya's backs have, for at least two years, been nothing more than rebadged Leaf Aptus II backs. Meanwhile, PhaseOne's cameras have been nothing more than rebadged Mamiya cameras. And PhaseOne has a (controlling?) stake in both firms. There really doesn't seem to be any 'there' here, just a reshuffling of the corporate deck as lines blur and things become ever slightly more confusing for the consumer."

Featured Comment by Brian Woolf: "As a commercial studio/still life photographer, I have used a Leaf Valeo 17wi(17 megapixels) medium-format digital back (MFDB) since 2005. The quality, detail and sharpness is incredible in a studio environment with studio strobes, on a 4x5 Sinar p with film-era lenses. Last week I tried to get away with a Nikon D300 (12 megapixels) and an 85mm PC Nikon lens and was so disappointed with the quality, compared to what I was used to, that I switched back to the Leaf back. If you have only used a 35mm system, you would be amazed at the difference of any MFDB. The only 'catch' with these MFDBs is that you get the best out of them with strobes.

"Another important thing to consider, as  a pro, you are selling your work and handing over your image files to a client, art director, retoucher or pre-press people that sooner or later see everything in the industry. You are being graded by them on the technical quality of your work, how sharp, how much detail, the tonal range, etc., against other photographers' work that they have seen. You really should be doing the best you can, not just 'good enough,' if you want to get the next job."

Japanese Prosecutors Raid Olympus Headquarters, Home of Former Chairman

In a move that is as difficult to interpret as any other in the massive two-month-old accounting scandal at Olympus, Japanese authorities raided the headquarters of Olympus in Tokyo on Wednesday as well as the offices of three companies used in the accounting fraud and the home of ousted Board Chairman Tsuyoshi Kikukawa.

The subtexts appear to involve a reassurance to investors and the public that the proper steps are being taken to resolve any illegalities, against a backdrop of a continuing struggle between ousted President Michael Woodford and the Olympus Board of Directors. That drama appears to have taken a nationalistic turn: Woodford has marshalled foreign investors who support his return to the head of the company, which would involve purging the entire current Board, and the Board is apparently jockeying to increase Japanese investment in order to decrease the influence of foreign investors, as a means of shoring up support for themselves.

The New York Times reports that Olympus executives could still face jail time, Olympus could still be delisted from the Tokyo Stock Exchange, and that the scandal casts "a shadow" over the company's "long-term viability."

Mike

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Olympus Supporters UNITE!

A Brief Pro-Olympus Manifesto

Olympus is a beautiful company. I'm not speaking of Olympus as a financial entity with its managerial appurtenances here, and I'm not speaking of the famous manufacturer of endoscopes. I'm speaking within the limited purview of our daily subject: photography and imaging.

Photographer's camera c. 1986–2002: The Olympus OM-4T
and the famous Zuiko 40mm ƒ/2.

In that context, Olympus is a beautiful company that makes beautiful products. The people who work at the camera division—the parent corporation's Imaging System Business—are creative and innovative and connected closely to the concerns of photographers. Over the years Olympus has created a wide range of exquisite products I've owned, from the 35SP of 1969–76, to the OM-4T and 40mm ƒ/2 Zuiko with which I did some of the best work in my life as a photographer, to the E-P[x] series of mirrorless Pen cameras today. The company was late to get lens coatings sorted out, but beginning in the late 1980s it cemented its position as a leading maker of camera optics, to the point that today I consider it to be a peer of Zeiss and Leica and, broadly speaking, slightly superior to Canon or Nikon as a lensmaker.

At TOP I have monitored the company's current travails closely, with, yes, a considerable sense of dismay and a measure of outrage. But the mistakes that were perpetuated for so many years were not made by those responsible for designing and making Olympus cameras and lenses.

I am not a "brand fanatic"—of any brand. As a photo writer, I can't be—I have to use a variety of products from a variety of companies, always trying to balance my specific idiosyncratic needs with a conscientious attempt to remain familiar with a range of different products. Still, I think it would be a loss to photography if Olympus were to cease to exist as a cameramaker; considering the upheavals in the industry as a result of the digital transition and the loss of several traditional cameramakers, the loss of such an important company would sap vitality from the camera market and impoverish us all. We were lucky indeed not to lose Leica in its rocky times; Olympus, in a much different but equally dire situation, now needs luck too—and the support of its fans and friends.

In a statement of apology on its home page, Olympus refers to its "stakeholders," naming customers among them. I'd just like to say that I remain not only an admirer but a customer of Olympus Corporation's Imaging Systems Business. I just bought an M.Zuiko Digital 45mm ƒ/1.8 lens for my Micro 4/3 cameras, which I'm very impressed with and intend to write about sometime this winter, and I hope to be able to buy an E-P3 body as well.

If you also admire this beautiful company, don't abandon it in its darkest hour. Stand fast! There are many good people connected to Olympus—and I sincerely hope the company can right its ship and weather its current storm, surviving to continue its fine traditions into the future. I for one am on board.

Mike

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Featured [partial] Comment by Jay Yocis: "I would like to include the fine folks at the Center Valley, Penn. location. The Pro support/loaner/info staff have been the best. I just got off the phone with support about a lens just a couple hours ago (I'm pleased with the response/action I received). I don't believe you need to go but a couple levels below 'the Board' to find very proud, dedicated, honorable people. My heart goes out to them."

Featured Comment by Dave: "It grows more difficult every year, every scandal to separate the corporate malfeasance from the product itself. At some point in time we have to make a choice whether supporting a corrupt company which happens to produce a superior product is something supportable. How do you punish criminal behavior without punishing the designers and workers who work for the company? In the end, they are the ones who suffer if the company goes down. The corrupt leaders who were the architects of the behavior will be barely touched. I wish I had a good answer to my question."

Featured [partial] Comment by John F. Opie: "Amen. A good family friend—sadly departed from this vale of tears—was the patent attorney (and glass physicist) for Carl Zeiss. Before that, he worked for Leica in Solms, designing new glass types. In both cases he said that the only Japanese company that Leica or Zeiss regarding as being serious competitors (in terms of coming close to being in the same class, quality-wise) was Olympus."

Featured [partial] Comment by Rick D: "Having gone through the death of Contax as an owner, I really, really don't want to repeat the experience."

Featured Comment by Dave: "It was not an act of support on my behalf, but even though I've read lots about this lately I still I bought a Pen with lens and a few accessories this weekend. My thinking was simple: It was the right kit for me then and there. As for the company's woes? Well, I spend the same amount on a new laptop every other year, so I'm familiar with similar loss on investment in that way: Digital gizmos have a way of becoming obsolete too soon, anyway. In the event that the company should go bankrupt, the lens will still be usable on a Panasonic body. So I'm not too concerned. The upside? The Pen has already proven to be a gem, and hopefully will continue to be for some time no matter what happens to the company that produced it."

Featured Comment by Mjiphoto: "Sorry to disagree, but Olympus are just another profit-seeking corporation, like Nikon, canon, Pentax and Sony. Why would any of them deserve 'loyalty'—particularly when they're more than happy to move on when it suits them."

Featured Comment by Amin Sabet: "I was going to write a very similar post and was so glad to see this one. Agree 100% with what you have written!"

Kodak Burns More House

Meanwhile, continuing the business news from yesterday, Kodak is continuing its own pathetic/bathetic death wallow. Most recently, it has sold off its profitable CCD sensor division to raise cash.

This ain't pretty to watch. Wasn't there an old folk tale about a man who dismantled his house stick by stick and fed it into the fireplace to keep warm, until the house was gone, the fire went out, and he was entirely exposed to the howling wind?

The buyer is Tom Gores' Platinum Equity, which at least has a track record of rebuilding and strengthening its purchases and is not just a financial vulture or an assets chop-shop.

Kodak makes the sensors used in Leica digital cameras and some medium-format backs, and is either a current or former supplier of, um, Olympus. (Maybe some others too—some of these arrangements are hush-hush so it's sometimes difficult to know who makes what for whom.)

Kodak sold the building along with the business. Another 263,000 square feet of Kodak Park gone the way of all things. Some 200 employees as well as certain contractors are reportedly being offered jobs with Platinum.

Mike

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Featured Comment by Geoff Wittig: "To my knowledge Kodak didn't kill off their R&D to temporarily inflate stock prices, as Bill suggests in the Comments section. To the contrary, their R&D was very robust almost to the bitter end. Their core problem was a depressingly consistent failure to execute the transition from R&D to marketable product. This evidently was because decades of high margins on print film created a corporate culture of zombie complacency. Potential products that didn't offer an immediate profit margin similar to print film's languished or died, no matter how promising. One example: a Kodak research lab developed a process for rapid injection molding of small glass lenses, with such high precision that no subsequent grinding was needed. Management couldn't see how to turn a profit on that fast enough to suit them, so it was given away to Sony for pennies. Those little lenses can be found in basically every CD/DVD drive on the planet, but they never earned anything for Kodak. Lather, rinse, repeat....

"Of course, such mind-boggling shortsightedness is something of a Rochester N.Y. tradition. The other big zombie company in town is Xerox; they famously created much of the core technology behind modern personal computing, from the 'mouse' to the graphical interface to local networks, at their Palo Alto research branch (Xerox-PARC) waaaaay back in the 1970s–80s. Then they dithered for another decade after giving Steve Jobs a glimpse...and the rest is history."

Spectacular Meltdown of Olympus Intensifies

I mentioned in the last installment of this tragic tale (tragic or lurid, depending on your outlook) that a reader in the financial industry is acting as a behind-the-scenes source for me about the implications of the Olympus news from Japan. It turns out his original intuition about what was going on was dead-on correct: Olympus admitted in a press conference in Tokyo yesterday that it had been using inflated payments for acquisitions and related services to avoid having to report losses on securities investments on its books. It marks the first time the company has publicly admitted wrongdoing.

What's more, the illegal practices might have been going on since the 1990s. Olympus stock plunged again yesterday to the limits of what the Tokyo Stock Exchange allows, amid speculation that the Exchange could put the stock on supervisory watch or that the company could eventually be delisted.

The L.A. Times implied that this may be the worst case of accounting fraud in Japanese history.

Hisashi Mori, the Olympus Executive V.P. and Board member whose resignation Michael Woodford called for in his original memo, has already been dismissed for his part in the cover-up. Auditor Hideo Yamada has also resigned. Major stockholders have called for the ouster of the entire current Board (possibly with the exception of Woodford). The revelations might also have serious consequences for the company's outside auditors, if they are found negligent.

In Japan, the news of the scandal (which had been under-reported there) was finally the lead story on the evening news broadcast of national broadcaster NHK. The story took up half the broadcast. In a message posted on the Olympus dpreview forum, Ray Kinnane points out, from Saga-shi, Japan, that the reaction of the Japanese public to serious scandals on the part of Japanese companies is often to shun that company's products.

At the press conference, President Shuichi Takayama held the line on the firing of Michael Woodford, reiterating the familiar line that Woodford was fired for his management style rather than for his whistle-blowing.

Interestingly, the Wall Street Journal Live Blog indicates that Tuesday's press conference was the first one which the publication Facta, which broke the story originally, was allowed to attend, seeming to confirm rumors that Facta had been banned from earlier Olympus press conferences.

It's now possible that members of Olympus management could face criminal charges. It's also possible that Olympus Corporation in its current form will not be able to survive this scandal, but could eventually end up in bankruptcy proceedings or being sold off division by division—stockholders, an anonymous source tells me, seldom forgive such a catastrophic devaluation when it's the result of malfeasance by management.

The fate of the camera division would most likely depend on whether that division is profitable by itself. But whether it is or not can hardly be known at the present time, given that the company has just admitted to doctoring its own books.

Olympus is due to announce its earnings on November 14th.

For further reading:

The Financial Times

The Wall Street Journal Live Blog has a blow-by-blow account of the press conference yesterday.

Japan Times

Also:

The BBC

The L.A. Times

The New York Times

Mike
(Thanks to Ray Kinnane, Bryce Lee, Steve Rosenblum, James Bulloch, John Camp, Mike Chris Hagburg, and anonymous sources)

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Sony Postpones A77, A65, and NEX-7

The BBC and others, some citing Tokyo-based Sony spokesman Yasuhiro Okada, are reporting this morning that Sony says it is postponing production of its new A77, A65, and NEX-7 cameras due to supply and production interruptions in Thailand, a result of the extensive flooding there.

The market for computer hard drives will also be affected, as Toshiba, Seagate, and Western Digital all have substantial production in Thailand that have been disrupted. Western Digital has 60% of its production in Thailand and estimates that it will need several quarters to recover.

The BBC quotes Tim Cook, the new CEO of Apple Computer, who said on Tuesday he is "virtually certain there will be an overall industry shortage of disk drives."

Mike
(Thanks to Dave Wilson)

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Flooding Affects Camera Manufacturers

The Nikon Thailand plant at Rojana Industrial Park, Ayutthaya Province, Thailand, partially submerged in floodwaters. Photo by Noppatjak Attanon.

Anyone's first concern in a natural disaster is for peoples' lives and livelihood. Even as new Thai Prime Minister Yingluck Shinawatra admits that her government is essentially overwhelmed by the scale of the disasters there, the widespread flooding—it has affected 27 of the country's 77 provinces—has claimed 317 victims, most drowned, and has caused suffering and hardship for many others. In a story such as this they deserve to be mentioned first, and we offer our condolences to the families affected and our wishes for an end to the crisis.

The flood has also affected a number of Japanese industries that relocated to Thailand seeking cost savings. Toyota, Honda, and Nissan plants have been hit hard. Electronics company Pioneer is one of the two companies that has seen its stock fall the furthest in Tokyo as a result of flood losses. The other, Nikon, confirmed in a statement last week that the first floor of its DSLR plant at Rojana Industrial Park in Ayutthaya Province in Central Thailand is submerged.

Thom Hogan reports that the Ayutthaya plant builds the D3100, D5100, D7000, and D300s bodies, as well as many of the basic bread-and-butter entry-level zooms.

Sony builds all of its DSLRs in the Ayutthaya area, which is about an hour north of Bangkok, although the effects of flooding at Sony plants are not known. In a chart listing the "Effects" of the various companies' damages, Thailand's Nation Multimedia lists the Nikon and Sony plants as having "no prospect of recovery." As the larger company, Sony might have more options for relocating production.

The disaster could have potentially long-term effects on supplies of products and on the economic performance of the various companies affected. Obviously, coming on the heels of the tsunami, this is very bad news for Nikon and other companies that saw repercussions from both disasters. Nikon Japan announced on Monday that it will donate substantial humanitarian aid to its host country Thailand.

Again, we express our sympathy for our Thai readers and all the people of Thailand who find themselves facing distress or who have had their lives disrupted.

Mike
(Thanks to Oren)

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Steve Jobs' Inspiration

Edwin H. Land of Polaroid

"In the memorials to Steven P. Jobs this week, Apple’s co-founder was compared with the world’s great inventor-entrepreneurs: Thomas Edison, Henry Ford, Alexander Graham Bell. Yet virtually none of the obituaries mentioned the man Jobs himself considered his hero, the person on whose career he explicitly modeled his own: Edwin H. Land, the genius domus of Polaroid Corporation and inventor of instant photography."

The article is "The Man Who Inspired Jobs," written by Christopher Bonanos, from the World's Best Photography Magazine.

How to impress women
Meanwhile, I got the following Jobs tale from my pal Pete:

Long ago I spent a workday with Mr. Jobs during the "Lisa" release, doing photo work. Sometime during the day this story came out and it was memorable.

Steve was in New York during the previous week. He notoriously didn’t carry a wallet or keys and so forth. (For most of our day he was in his socks—no shoes, although he put a tie on for a couple of shots.) He found himself in his hotel’s bar and was in conversation with two nice women. They treated Steve to drinks. But when it came his turn to buy, he didn’t have any money. The two women didn’t know who he was, just a nice guy who had no money. He told the ladies the he was good for the cost of a round of drinks as he would get some money from his traveling companions.

The women were unsure of his promise but paid for the drinks. At his next turn, he again promised money from his friends; they were late, but would arrive soon. He told the women that he and a friend (Woz) started a computer company in California and that he was paid well and was good for the drink money. The women were more leery at this point about fronting money to this guy with promises and no wallet. Then Steve remembered that his photo was to be on the cover of the current TIME Magazine. He told the women that if they would follow him out to the corner newsstand (in the rain) he would prove to them that he was good for the drink money and was not BS-ing about his work in California. Well, they went out into the rain and saw his photo on the cover of TIME—and the three of them went back to the hotel bar, where the two women bought the next round.

Mike
(Thanks to Steve Rosenblum and Pete)

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Featured Comment by Avram Levi: "Playboy re-published an interview with Steve Jobs from the 1980s. At one point he talks about Dr. Edwin Land: 'You know, Dr. Edwin Land was a troublemaker. He dropped out of Harvard and founded Polaroid. Not only was he one of the great inventors of our time but, more important, he saw the intersection of art and science and business and built an organization to reflect that. Polaroid did that for some years, but eventually Dr. Land, one of those brilliant troublemakers, was asked to leave his own company—which is one of the dumbest things I've ever heard of. So Land, at 75, went off to spend the remainder of his life doing pure science, trying to crack the code of color vision. The man is a national treasure. I don’t understand why people like that can't be held up as models: This is the most incredible thing to be—not an astronaut, not a football player—but this.'"

Featured Comment by Michael O'Donoghue: "Well—we all know what happened to Polaroid...."

Fuji Goes on the Attack

Shigetaka Komori, Fuji CEO, has announced that Fuji will enter the mirrorless interchangeable-lens market by next Spring (2012) with a line of products that will share the "Fujifilm X" nomenclature with its recent fixed-lens cameras the X100 and X10.

Komori-san says that the sensor quality of Fujifilm X mirrorless will exceed that of current full-frame sensors, although its sensor size will likely be smaller than 24x36mm. The claim reminded me of something...I have a hazy memory of someone with knowledge of the industry telling me long ago that an official of Canon said that Fuji is the only company Canon is scared of—not Panasonic, not Sony, not Nikon—because of Fuji's expertise with sensors. (I might not have that right, so please don't quote me.)

Fuji also confirmed that demand for the X100 has far exceeded expectations. More than 70,000 have sold in six months, and the total is expected to top 100,000 by year's end.

Mike
(Thanks to Vlatko—and Google Translate)

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Featured Comment by John F. Opie: Fuji is a supporting member of 4/3. While this doesn't necessarily mean that they will produce, consider who else is in that list: only Kodak and Sanyo do not have active 4/3 products (Kodak did do sensors for some of the early models). In other words, they've all got skin in the game.

"Consider this: in sharp contrast (pun intended) to Canikon, there is no Fuji DSLR market to cannibalize if they were to bring out a Micro 4/3 system. Point-and-shoot and bridge cameras, yes, but no DSLRs in production. The Nikon 1 system is clearly designed to avoid cannibalization of Nikon DSLR sales, while Canon appears to be happy to ignore the whole subject.

"Consider this as well: Olympus has some truly kick-ass lenses for Micro 4/3, but hasn't upgraded the sensor much worth speaking of. Panasonic has a better sensor in the GH2, with some outstanding lenses (largely via Leica) as well, but lacks the IBIS.

"If Fuji were to bring IBIS, an outstanding, high quality sensor and some of the Fuji lens magic, game over. It's the penultimate digital camera.

"And finally, consider this: there have been fairly substantiated rumors of a Fuji Micro 4/3 offering for the last two years. Given the time lead involved for developing such a system, it sounds like there is a definite opportunity here for Fuji to be a game-changing company, which is, in many ways, where they need to be in order to survive.

"However: a new mount? Meh. We don't need YAECM (Yet another EVIL camera mount) which would limit sales and market potential. Micro 4/3 has the potential to break out big-time with Fuji on board, an Oly professional Micro 4/3 ruggedized body, and Panasonic turning out pro-quality movie-capable Micro 4/3 bodies. Goodness, what a joyful world that would be (besides, you can use all of the lovely Nikon and Canon glass, saving your investment...).

"Of course this is speculation. It's on the Internet, isn't it? :-)"

Kodak's Market Value Down $30 Billion Since 1997

Quoting "three people with direct knowledge of the process," Bloomberg is today reporting that Eastman Kodak Co., once the bluest of blue-chip American companies, might file for bankruptcy to help clear the way for a firesale of its IP assets. Kodak denied the claim, but on the news Moody's slashed Kodak's bond ratings and Kodak stock fell again, by 98 cents, or 58%, to 71 cents a share today. Kodak has lost more than $30 billion in market value since its peak just fourteen years ago.

Mike
(Thanks to Jeff S.)

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Featured Comment by erlik [in Croatia —Ed.]: "You might as well told me they lost the Imperial Planet, too. Or all the tea in China. Thirty billion dollars is a completely meaningless sum that exists only as a number. By the way, it's also higher than the current Croatian national budget, too."