Olympus Disappearing?

The financial news website 24/7 Wall Street has included the maker of our "Camera of the Year" in its annual prediction of brands it expects to go belly-up in the coming year. "Olympus, which only has 7% market share, has failed to generate a profit from its imaging business in any of the past three years," notes the site, probably failing to take into account the effects of the accounting scandal. The last three years have indeed been tough on Olympus. In any event, get that E-M1 while you can!

Note that I do have a disturbing habit of buying cameras from companies that go bust. I shot Contax for years (and loved them), and my first DSLR was a Konica-Minolta 7D (also a lovely camera). I owned several Bronicas. 247wallst.com's list also includes Barnes & Noble's Nook (we sell Kindles! We sell Kindles!), the WNBA, and retailer J.C. Penney, which has survived past appearances on the list. (I think Mitsubishi has been on the list before, too.) [UPDATE: In the Comments, Nathan points out that 24/7 Wall Street went zero for 10 in their predictions in 2012 for brands that would expire in 2013.]

Meanwhile, Olympus predicts that 24/7 Wall Street itself will bite the dust during the coming year, prey to increasing competition on the Web. (No, it didn't. Just kidding.)

Meanwhile, I got a really cool new photographic toy for The-Holiday-Which-Must-Not-Be-Named. Wow. I can't tell you what it is yet, but I'll definitely write about it sometime this month.

Mike

Original contents copyright 2014 by Michael C. Johnston and/or the bylined author. All Rights Reserved. Links in this post may be to our affiliates; sales through affiliate links may benefit this site.

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(To see all the comments, click on the "Comments" link below.)
Featured Comments from:

Bernd: "Funny...Olympus themselves expect to post a profit for their 2014 book year. We'll see."

Steve Biro: "Mike, your tongue-in-cheek line about Olympus predicting the demise of 24/7 Wall Street reminds me of one of my favorite t-shirt slogans: 'God is Dead. —Nietzsche, 1882. Nietzsche is Dead. —God, 1900.'"

Mike replies: Steve, great minds think alike. I almost included that in the post. :-)

Kenneth Tanaka: "No, I wouldn't pay much attention to that site's 'predictions.' Olympus's fortunes are looking up thanks to the E-M models. On the other hand Phase One and Hasselblad are brands that should be nervous, most especially Hassy. Their raison d'etre sure seems to be evaporating in the wake of the latest crop of high-performance consumer cameras."

Jason: "Interesting you posted this as I was about ready to pull the trigger on an E-M1. I saw an article on Phoblographer where a Credit Suisse analysis was also stating Canon, Nilon and Sony would be the only ones left standing. It gives me some pause, but I'm ready to trade out my aging D80 and mediocre zooms against the new Olympus and good glass."

Mike replies: See, different people have very different reactions to this sort of thing. I can definitely see your point of view, but knowing that a product might be endangered makes me want to buy it more, not less—because it makes me want to enjoy and appreciate it while I still can. If Olympus went out of business today, I would buy a second E-M1 immediately. I'm not kidding; I would.

My favorite quote on this topic, which I love to trot out:

In fifteen years, the electrolytic power-supply capacitors will get old. Depending on usage, you will begin to have semiconductor and other failures between 10 and 50 years after date of manufacture. Later, the sun will cool to a white dwarf, and after that, the universe will experience heat death.

—Nelson Pass, from the Pass Aleph 0 User's Manual, explaining the life expectancy of the product

In other words, everything ends; carpe diem.

Comments

[Steve Barnett]

"Based on increased interest in high-end cameras, the company plans to focus on increasing sales of SLR cameras, which accounted for just 35% of its imaging business."

35% doesn't seem like a small figure to me, considering the breadth of the imaging part of Olympus. The remaining 65% certainly isn't made up just from the 'defunct' P&S market. And considering it is the high end division that provides the trickle down technology, and new partnerships with Sony, then reducing costs and getting rid of the P&S side (as all manufacturers will be doing)just means it will be smaller but fitter, like we would be if it hadn't been for that last mince pie.

[sneye]

Unfortunately it is the smaller camera manufacturers who have pushed digital imaging forward in the past few years. They are more hungry and more nimble. If one or two of them disappear nothing terrible will happen (there is little room left for tangible improvement), but I would feel a tinge of heartburn.

That said, I seriously doubt any of them is going away soon. Profitability seems to be a secondary goal to the camera divisions of the more traditional manufacturers, preceded by the values of maintaining tradition, good engineering, innovation and most importantly corporate pride and reputation. Olympus, for example, will probably keep making photography equipment for as long as its medical division can afford it. Its CEO was recently quoted declaring that imaging R&D is invaluable to the endoscope branch. Perhaps it's merely an excuse to justify losses, but I'm convinced most shareholders would be outraged if Olympus shut its camera business. The same goes for Fujifilm and Ricoh (Pentax). Not so sure about Panasonic and Samsung.

[Globules]

Thom Hogan has commented on similar articles. If I may paraphrase his opinion: in the past year nothing has changed substantially with respect to the smaller players and some people need to breathe into a paper bag. He concludes:

If you’re one of those that are afraid a camera maker is going to go away, well, I’m sure that one or more eventually will, but not necessarily the ones you think or for the reasons you think. Nothing’s changed: if you want a mirrorless camera, there are plenty of great ones out there today from a wide range of vendors.

Anyway, read his full article.

[Soeren Engelbrecht]

I still remember the day that I heard that Contax was closed down (by Kyocera). Couldn't believe my ears. I guess that the failure of the "N" system (both film and digital) was an important factor.

A couple of years back, though, I have acquired an RTS with the lovely 50/1.7 Planar, and I must say that I really enjoy shooting it. I am contemplating the 35/2.8 and 85/2.8 lenses, too, but don't really need a serious investment in a fourth (!)lens system.




Anton, Copenhagen, March 2013. Contax RTS with Zeiss 50/1.7 on Kodak BW400CN Professional

[Jim Witkowski]

That's the same group that predicted that e*Trade would be long gon by now, isn't it?

[Robert Roaldi]

You would think that by now we would have learned not to listen, and certainly not believe, anything coming out of the mouths of Wall Street mouthpieces. Just because someone wears an expensive suit and has a deep voice doesn't mean they know anything.

Why would Olympus imaging be any more likely to go belly-up now than any other time in the last 60 years. They've never been a big player. They might go belly-up, of course, but so might any of the rest.

[psu]

I almost, but didn't quite, posted a comment on the E-M1 page about how it was too bad that Olympus (and Panasonic) were doing such relatively great things with m4/3 just as they were in enough trouble to perhaps exit the business in the short to medium term. Ah well.

[Mike Plews]

If you go to our garage you will find a Saab 900, Olds 98 and a TR6, sheesh.
At least you can get parts for them (Saab may get dicey soon but it's going to get sold in the spring).
Apparently I have a thing for orphans. Oh, and there's an Amiga 500 in the basement somewhere but I'm chalking that up to being too smart by half back in the day. No sentimental attachment to that one at all.

[beuler]

4/3 Rumors have some interesting numbers on Olympus sales. "Within the Mirrorless world Olympus takes the lead with 29.1% followed by Sony 26.4%, 14.2%, Panasonic, Ricoh imaging 9.8%, 9.34% Nikon, Canon 9.25 percent."
http://www.43rumors.com/japan-these-are-the-most-sold-cameras-in-2013/

But then if you lose money on every camera you make, then the more cameras you make the more you lose. So... Let's hope Olympus is actually makes some money off cameras in 2014.

[Bernd Reinhardt]

It would be a shame if the one camera maker that has really listened to photographers and made a camera that really works went belly up. I have faith that they can make it through this. I have recommended the EM 5 to four of my colleagues, who recently had kids, and were looking for a "DSLR" that takes good pictures and has interchangeable lenses. They all asked me whether they should buy a Canon or a Nikon and I sent them to try out an Olympus. They are happy as clams with their stylish new cameras.

[Harold GLIT]

This article by 24/7 Wall Street fails short on several angles. First of all, it does not seem to understand that the camera division is a very small part of Olympus global business . Secondly it analyses risk of survival solely based on a profit & loss angle , leaving the cultural dimension of what Japanese companies are willing to do to save face and /or to look at the long term
Now what happens when people who wrote this article are proven wrong ?

[Kurt Kramer]

I think you meant "get that OM-D while you can".

[Luiz Kamnitzer]

Not our CoY, your...

Sorry Mike, could not let this one pass... Happy New year!

Regards
Luiz

[Nathan]

It's worth considering that 24/7 Wall Street was zero for 10 last year for Brands That Will Disappear in 2013. I didn't bother going back to 2012.

[Doug B.]

Please don't buy a Ricoh/Pentax camera! I like Pentax and I'm sticking with them.

[aaron]

If only that OMD was full frame...Seriously! that would be the camera of the decade. In reality everyone likes the omd but few buy them, I have never seen one in the wild.

It's that sensor... Is it only me or does every image I see (online) have nasty looking highlights? Not sure why this isn't picked up on more...

[Wayne]

Damnit, I am considering buying an E-M1, might still. I think the convergence of 24/7's prediction, Mike's habit of buying cameras of companies that disappear, and Olympus' financial woes are maybe a triple-witch that's hard to ignore. The reality probably is that one or two of these camera companies are going to go. Olympus looks to be the weakest financially. They might be bought out by Panasonic - or Sony. Sony would gain built-in IS, good prime lenses, and smaller cameras with a viewfinder - hey wouldn't that be great. Maybe I'll get the GX-7, I like it more, but wish it had better implemented IS.

[cfw]

What's hard for me to accept (about Olympus going out of business per that article) is that a company that can sell 2.7 - 5 million cameras a year cannot be "profitable." In a normal world (not a corporate world), how can that be?

cfw

[Rob]

In the event that Oly cannot survive on its own, it has such great products that some other company will surely take it over. Now, whether the tradition of innovation and high quality would survive under a new owner is a great unknown. Let's hope that the worst case scenario does not become the actual scenario.

[Paul De Zan]

If the right deal could be put together, Fuji should Buy Oly.

[PWL]

Well, I hope Olympus doesn't go under-- though I note it's demise has been repeatedly (here, among other places), but it hasn't happened yet.

But like you, I'm an albatross when it comes to cameras. Started out shooting Minoltas-- they went under. Shot Konica--they went under....

[Allan Graham]

No doubt some financial scavengers are even now salivating at the prospect of picking over a carcase like Olympus, and are delighted to promulgate rumours of its imminent demise.

[scott kirkpatrick]

To the commenter who hasn't seen an OM-D in the wild, I found I was one of several proudly carrying an E-M1 about while looking for a proper camera bag in a Palo Alto camera store a month or so back, got stopped on the street by people wanting to know "is that the new one?" A digital Leica has never gotten this much attention.

scott

[kirk]

Correct me if I'm wrong but didn't Sony just infuse Olympus with a generous amount of new capital and pen an agreement to share resources and R&D? I don't think Sony would make such a commitment if they weren't reasonably sure of some sort of positive return---

[Peter Lacus]

Don't be told what you want
Don't be told what you need
There's no future, no future,
No future for you

Sex Pistols: God Save The Queen

[Sarge]

Actually, Olympus Has Fallen

[Ken]

For what it is worth, Sony, Olympus, Panasonic and Samsung are global corporations with a number of profitable businesses and none relies on its cameras to stay in business. Not even close.

That's not to say one or more might not spin off or close its camera division down the road, but the odds of those camera brands disappearing in the immediate future, including Olympus, are likely to be pretty small.

[Kalli]

If Olympus were to go out of business, I think I'd go and buy an E-M1. An E-M5 and an E-M1 should keep me set until the next camera system that's right for me comes along.

Same with Panasonic. If they'd go out of the camera business I'd finally have the excuse to buy that 25mm f/1.4 I so want.

Both actions would obviously be mostly too little, but also too late.

[Jayson Merryfield]

In response to the Jason above: I've been kicking myself for investing more and more in Olympus since 2008, when I got my E-520 and started collecting lenses. Every time I upgrade a body, I think, “Self, should I be switching to some brand that’s got a more secure future?” I’m on my 4th body and 6th lens now, most recently having acquired an E-M1 and 17 1.8, and I still thought that when I picked it up. It’s part of the charm and magic of being an Olympus user, having wonderful blues in your images and experiencing constant self-doubt and insecurity regarding your equipment. It’s really quite spectacular.

[Oskar Ojala]

As they say, predicting is hard, especially predicting the future... personally, I don't worry though.

Mike, have you considered testing the "buying cameras from companies that go bust" streak by buying a Canon and see what happens?

[Kevin Purcell]

Not to burst Mike's bubble of dooming camera companies by buying their product but Konica/Minolta ain't dead.

The common view is "Konica/Minolta was bought by Sony" and they killed of the company and their cameras.

Konica/Minolta did not "become Sony". Konica/Minolta sold their SLR camera brand, camera business (and mount designs) to Sony but Konica/Minolta still designs and makes copiers. They also retained their in-house camera lens design people.

As you can see if you check patents Konica/Minolta are a big OEM for m4/3 (and other lens mounts too including some APS-C sized lens patents). They apparently designed the Olympus 45mm f/1.8 lens and quite a few others (shocked! me too!). And they keep turning out other m4/3 lens designs.

Konica/Minolta are alive and well. It looks like they got out of the retail camera business and focused (erm) on their strengths i.e. designing and building lenses. It seems they choose the most profitable route in a "gold rush": don't go panning for gold but sell supplies to those that do.

[D. Hufford.]

Yes, the Thom Hogan article referred to is a good counterpoint to this these fears. The last thing I am worried about is Olympus (cameras) going out of business anytime soon. Things don't happen that quickly in the Japanese corporate world. We'll know about it way before it happens. That's one prediction that I can make confidently. The other is that most of 24/7 Wall Street's predictions will be wrong.

[Dave Jenkins]

A *second* E-M1, Mike? Have you been a bit coy about buying the first one, or have I just missed something?

[Mani Sitaraman]

Surely the M6 meter counts as a coupled meter, Mike? It responds to changes to both the aperture ring and the shutter speed dial, doesn't it. It isn't an automatic camera though, I'll grant you that.

[ronin]

Olympus is in real trouble. The mammoth fraud did it no good; all the more reason the company has a target on its back.

The past predictions were true. Olympus would be dead today if not for Sony being the a sudden white knight, white knightedness otherwise neither needed nor wanted were Olympus a thriving going concern.

Olympus is doing away with many of its distribution channels, customer support facilities, product promotion and advertising facilities, and will rely on Sony's capabilities- including in the US. Not only is Olympus already retracting its global reach, but it will lose mindshare as a result, and have even less of a chance to be featured at retailers.

Olympus is in danger of becoming nothing more than a brand, a mere label that will be bought and sold and slapped on stuff made by anyone, much as Kodak or Polaroid have become.

Sony has little motivation for putting Olympus micro 4/3 on life support... Sony is already losing money on its camera line, why should it willingly take on yet a greater money loser?

Corporations are not answerable to camera fans who don't pay the rent. They are answerable to shareholders. Why should shareholders gladly take a loss just to make some luxury toy buyers happy? What's their motivation?

And it is all very sad. Because the more competition in the market the better.