Additional Information on Olympus

There has been some recent postings about Olympus. Specifically the rumour about the imminent closing of its camera division. The purpose of this article is to provide readers with some additional information on Olympus that they can consider.

November 22, 2019 Update: Olympus confirms commitment to Imaging Business

After some alarmist rumours about Olympus closing its camera business within “3 to 8 months” the company provided a very strong commitment to its Imaging Business. A detailed response to the rumours was provided to PhotoFocus. The entire PhotoFocus article can be read using this link.

Is it possible that Olympus will close its camera division? With the continued decline of the camera market there is a possibility that any one of a number of companies could close down their camera divisions at some point in time. For companies like Olympus, Canon, Sony, Fuji, Panasonic and others who’s core business isn’t cameras that possibility certainly exists. It would be a tougher decision for Nikon. Since the Olympus camera division is not profitable, there is speculation that the company will close it… one rumour stating within 3 to 8 months.

Rather than simply believe the rumours that are out on the internet, this article provides links to additional information on Olympus.

Olympus has responded to the rumour in a recent Sina Finance interview. Those of you that would like to read the entire follow up interview can use this link.

On November 6, 2019 Olympus issued a Notice of Formulation of Corporate Strategy. Readers wishing to read the entire 40 page document can use the link provided. This strategy document is focused on the core business of Olympus which is its medical business.  Olympus has 70% market share of the gastrointestinal endoscopic equipment market with over 20,000 patents.

There is no significant mention of either the Scientific Solutions Business or the Imaging Business in this strategy document. Olympus has stated that strategy information on these two divisions will be forthcoming at the end of the company’s third quarter.

One of the questions that you can ask yourself is if it logical for Olympus to focus its strategy formation and implementation initially on its core business, then deal with its other business units a bit later on.

Additional information on Olympus you may want to read pertains to financial results. The second quarter 2020 financial results for Olympus can be obtained with the link. If you read the report you will see that Olympus posted a record high profit of 50.9 billion yen in the first half of the current fiscal year. You will also see that the Olympus camera division lost money, albeit at a reduced rate even in the face of declining revenues.

You may also want to have a look at the recent price of Olympus stock. It has increased dramatically over the past year. You can also look at the stock price history.

Here is a link to a Bloomberg interview about Olympus. This interview indicates the focus for potential M&A activity will be on the medical business. It also states that Olympus stock is being upgraded by analysts.

So, there is a lot of reference material that you can read that may help you form your own opinion.

You may want to ask yourself a few simple questions related to new product launches…

If you were the CEO of Olympus and you had decided to close the camera business in early 2020, would you have approved the launch of the OM-D E-M1X and OM-D E-M5 Mark III in 2019?

Would you have approved all of the tooling and manufacturing costs as well as recent sales and marketing costs associated with launching of those cameras in 2019 if you were going to close the camera business in 2020?

As the CEO, would you have approved the announcement of an Olympus PEN E-PL10 camera in late 2019, if you had decided that you were going to close the camera business in 2020?

Fundamentally, is it logical that Olympus would launch new products if it was planning on closing its camera division in the near term?

It is certainly possible that Olympus may stop making cameras at some point in the future. Just like it is also possible that Fuji, Panasonic, Canon, Nikon, Sony and other companies could also make that decision in the future as camera market volumes continue to erode.

So, you now have some additional information on Olympus. You can peruse this factual information, as well as ponder some simple questions. Hopefully that will help remove some emotion from recent rumours, and allow you to assess the situation logically. You can then come to your own conclusion on the veracity of the current rumour that the Olympus Imaging Business will be closing within the next few months.

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6 thoughts on “Additional Information on Olympus”

  1. Tom,

    I don’t know if people/sites fanning the flames of rumors, so to speak, are just click-baiting or shilling/trolling or plainly relishing the “rumored” closure of another camera brand (which is strange behavior if one is serious about photography to begin with). As you pointed out, companies especially with other businesses apart from making cameras and lenses, can indeed close an unprofitable business or discontinue products. Strange that the rumors seem to focus on Olympus because if we’re basing the speculations on the camera companies’ most recent financial statements/performance reports, the most vulnerable one would be Nikon though based on their recent introductions, this may not be so (Z7, Z6, Z50, Z lenses and a pending D6 for the Tokyo Olympics).

    To reiterate a point from a past post, I go with your reading/analysis that the photographic industry may be headed towards the 70’s/early 80’s levels. Most likely, the surviving companies would be selling specialist, niche products (Leica/Hassie for the upmarket, 1DX/D6/A9 for the photojournalists/sports photographers, maybe even a dedicated segment for birders (Olympus E-1MX and its siblings plus Tamron/Sigma telephoto zooms). Smartphones will continue to eat into (or may completely devour) the point and shoot camera market same way that they made beepers (remember them?) obsolete.

    The shills and trolls who wish some of the brands away may not realize that if the current number of options contract/disappear, we would all be poorer for that.

    Oggie
    http://www.lagalog.com

    1. Hi Oggie,

      A few years ago, Olympus went through some scandals in terms of irregularities with financial reporting and some of its past business practices. That certainly did not help the company with its image, and also fuelled speculation on its future. It is also one of the smaller brands that still reports the performance of its camera division separately. So the losses it has been having from its camera business are clearly visible. Some companies like Panasonic have collapsed their camera business into other business units and no longer report on it separately. In Panasonic’s case it has been rolled under appliances. We have no way of knowing if Panasonic is losing money making cameras or not. So, the point of the article was not to say that Olympus closing its camera business was not a possibility, but there is some current information that can be considered about the immediate threat of that happening. In the case of Olympus, its camera business is better aligned with its core business of medical imaging products, than Panasonic’s camera business is with its core business which is batteries for electric cars.

      No doubt Olympus has a challenge with its camera business. Time will tell whether they can come up with a strategy to make it profitable. It appears that Olympus has been focusing on the pro and enthusiast markets the past 2 to 3 years with its product development. Their lens road map shows 8 new lenses for 2020 with 6 being new PRO lenses and 2 consumer oriented lenses. The company has also been discounting the OM-D E-M1 Mark II for quite a few months, which could be an indication that an OM-D E-M1 Mark III will make an appearance in 2020. Companies often discount older models to clear out inventory to make way for new models. That appears to be what happened with the E-M5 Mark II.

      Assuming that Olympus continues with cameras for the next few years there are some hints emerging on how it intends to differentiate its products. More pro grade lenses, superior weatherproofing and IBIS, focusing on the weight and cost advantages of M4/3 vis-a-vis other pro gear, and the integration of more AI into its camera products to give them capabilities not matched by larger sensor cameras (e.g. Pro Capture, Live Composite, Live ND, Intelligent Subject Tracking). It appears to be sticking with the M4/3 format in order to maintain some unique functionality with its cameras. Since the E-M5 Mark III is now very close to the E-M1 Mark II, I think it is possible that an E-M1 Mark III could have a higher resolution BSI M4/3 sensor. I am not intending to start my own ‘rumour’… just stating what I think is possible.

      My wife and I have decided to keep all of our Nikon 1 gear since there is nothing else currently available that provides the same size/performance/functionality of the system. If something happened with Olympus at some point, I’d keep using my E-M1X and M.Zuiko lenses for the same reason.

      Sometimes I wonder if Nikon re-introduced the Nikon 1 system whether it would be more successful with it now. It would be a more logical step for people using cell phones, than to go all the way to full frame. *shrugs* That decision would never happen, but it does cross my mind from time to time.

      Thanks for adding to the discussion Oggie! Time for me to get back to processing images for three new eBooks I have under development…

      Tom

  2. Thank you for the up to date information. I have recently read where Olympus camera division has moved some of their manufacturing to Thailand as well? Which to me would imply that they were not planning to cease camera sales any time soon.
    John

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