News: Japan's Olympus sees profits plunge on weak digital camera sales

[bmattock]

Olympus Profit Plunge on Digital Camera Sales - Click Here

While this may not be breaking news of the immediate demise of digital cameras, it is a bit cheerier news for the survival of film than has been seen in recent days.

Best Regards,

Bill Mattocks

Japan's Olympus sees profits plunge on weak digital camera sales

Time is GMT + 8 hours
Posted: 9-Nov-2005 00:59 hrs


Japanese electronics maker Olympus suffered a slump in net profit in the first half of its financial year as sales of digital cameras declined sharply.

Olympus, which also makes medical equipment, reported a net profit of 2.17 billion yen (18.41 million dollars) for the six months to September, a decline of almost 68 percent from a year earlier.

...

Olympus is seeking to trim its costs and announced in May plans to slash 4,000 jobs or 13 percent of its workforce.

In the first half, global sales of digital cameras dropped by nearly 14 percent to 3.7 million units as Olympus moved to streamline its product line-up, shifting away from unprofitable compact-type digital cameras.

"Although we still think the global digital camera market has growth potential, especially in Europe, the US and China, global demand in the first half did not grow at a pace we had earlier expected," Hideo Yamada, an Olympus director, told a press conference on Tuesday.

"We can no longer expect the rapid-paced growth in global demand we witnessed a few years ago," he added.

For the year to March 2006, Olympus is now targeting sales of 8.1 million digital cameras, well below its original target of 9.5 million and the 8.9 million sold in the previous year.

...

Olympus noted that the result was still better than the 13 billion yen loss that the company had expected and cost cuts meant the division should eke out an operating profit in the second half.

...

 

[Paulbe]

Thanks for the note Bill. I guess the digi-cam market will continue to "fluctuate"---in one post Fuji is closing a plant due increased digital sales and in this post Oly is suffering because of low digital sales...hmmmm.

Might just be a product mix problem. I don't think Nikon will have any probs selling the D200...

Paul

 

[bmattock]

Thanks for the note Bill. I guess the digi-cam market will continue to "fluctuate"---in one post Fuji is closing a plant due increased digital sales and in this post Oly is suffering because of low digital sales...hmmmm.

Might just be a product mix problem. I don't think Nikon will have any probs selling the D200...

Paul

The overall view I'm getting is that the 'biggies' are getting out of the consumer digicam market at the low-cost end, and abandoning that to whomever wants it. Seems Kodak is going the other way, so they seem to be wanting to carve a niche there, alongside the el cheapo Taiwanese imports with zero brand name or purchased brands cachet, such as 'Bell&Howell' cameras which of course are nothing of the sort.

Best Regards,

Bill Mattocks

 

[djon]

D-200, 5D...and Sony / Panasonic / Kodak digicams all look good.

I wonder how long Pentax will be with us? I don't think they have Olympus's advantage in the microscope market.

Olympus blew it bigtime by poor advertising and coming too late to the party with the 500...should have introduced that a year ago. Specs seem to rival D70 and 20D, but selling the 4/3 idea would take more cash than they threw at it.

 

[jlw]

I've heard it said that the digital market eventually will shake out to high-end cameras (for serious photographers) and camera phones (for everyone else) with nothing in between. Maybe that's where this is all headed...

 

[Richard Black]

How great is the demand for digital cameras? How many do you own? I have one and would like to upgrade to the K-M 5D because of the lenses I have that are compatible with this camera. This would be enough for me. Digital is not attractive to me but I would like one to keep up with the current trends. I will continue to collect film cameras because of the charm, mechanical operations, and memories.
Customers feel betrayed if they pay good money for a competent cameras and then within 4 to 6 months the company gives birth to the "latest and greatest". I have hesitated to upgrade mine because I want to see what comes out next. I don't think I am alone in this attitude. 😛

 

[bmattock]

D-200, 5D...and Sony / Panasonic / Kodak digicams all look good.

I wonder how long Pentax will be with us? I don't think they have Olympus's advantage in the microscope market.

Olympus blew it bigtime by poor advertising and coming too late to the party with the 500...should have introduced that a year ago. Specs seem to rival D70 and 20D, but selling the 4/3 idea would take more cash than they threw at it.

I think they played two gambles with their 4/3 System:

1) That other makers would buy in.
2) That consumers would be willing to drop their investment in existing lenses.

They got the usual lip-service from what, three or four manufacturers, who agreed to make 4/3 stuff but proceded to make their own proprietary mount equipment first (and in some cases, have never made any 4/3 stuff). And many existing SLR users are looking to ease the sticker shock of stepping up to a DSLR by keeping their existing AF SLR lens systems, even if they suffer from being 'non-digital-ready' (LOL).

Olympus got out of the film SLR game back when the big jump to AF happened, didn't they? They did an OM-mount AF called the OM77, or something like that, but it wasn't a big seller and they dumped it. They then went to the hybrid ZLR (Zoom Lens Reflex) systems, which they continued to tout through the years. They got high marks, but consumers didn't buy them up like hotcakes, so they didn't sell that well.

Ironically, the ZLR system design is hot again - and it was Olympus who kept the flame burning all these years, and they got in to digital early with the well-regarded E10 and E20 (and a couple before that, but the E10 was a breakthrough).

So, here is Olympus, hoping for a chunk of the DSLR market, but without a legacy AF lens mount or a user base to drag along into DSLR territory. So they took a gamble and decided to try to poach other SLR maker's users, and even entice them into joining into the game, with the so-called 'open standard' 4/3 system.

I think it sadly is not working.

I have a friend with one of the new 4/3 system cameras, and Olympus has been promising him an OM adapter mount for some time now - but it seems not to exist, or at least he can't get his hands on it.

I think Olympus has a problem, and I'm sorry, because they're a good company with a proud history.

Best Regards,

Bill Mattocks

 

[Peter Klein]

I have a friend with one of the new 4/3 system cameras, and Olympus has been promising him an OM adapter mount for some time now - but it seems not to exist, or at least he can't get his hands on it.

The adapter exists. I have one, and it works very nicely. There is some goofiness at very wide or very narrow apertures, but nothing a reasonably experienced person can't handle once they know what to expect.

The problem was that for a long time Olympus denied that the adapter existed (probably some marketing type said it would discourage people from buying new lenses). They all of a sudden they started giving it away for free in many countries, but not all. Then they stopped shipping it for a while, and people who were waiting got frustrated. Then the new batch arrived, and they started shipping again. I got mine about that time, a year ago.

It's still available. I don't know if it's free in the U.S. anymore. I think it now costs about $100.00 in Europe, but check before you quote me. You can get one for $175 from www.cameraquest.com, or usable but lower quality adapter from a Polish site.

--Peter

 

[bmattock]

The adapter exists. I have one, and it works very nicely. There is some goofiness at very wide or very narrow apertures, but nothing a reasonably experienced person can't handle once they know what to expect.

The problem was that for a long time Olympus denied that the adapter existed (probably some marketing type said it would discourage people from buying new lenses). They all of a sudden they started giving it away for free in many countries, but not all. Then they stopped shipping it for a while, and people who were waiting got frustrated. Then the new batch arrived, and they started shipping again. I got mine about that time, a year ago.

It's still available. I don't know if it's free in the U.S. anymore. I think it now costs about $100.00 in Europe, but check before you quote me. You can get one for $175 from www.cameraquest.com, or usable but lower quality adapter from a Polish site.

--Peter

Peter,

I'll pass on the information to my friend, thanks! I'll bet he's not happy about spending $175 on an adapter his Olympus guy said would be very low cost through Olympus...hehehe.

Best Regards,

Bill Mattocks

 

[Fred]

The important bit has been said, at least Olympus has other business to keep it going at least for the short term. They took a huge gamble with a new mount this late in the game and so far it is not working as well as hoped. Lets hope they still have something new to pull out of the bag.

You sometimes have to take a gamble on certain things, Canon did it when the said farewell to the well established FD mount when they went AF, for them it worked, without the trouble having to support legacy lenses they saved money but hurt a lot of loyal people who invested in an FD system. Minolta survived the mount change also from the MD to MAF. Nikon sort of did it by not supporting some of the older manual F mount lenses with big metering restrictions. Only Pentax really stayed true to the K/KA mount support (to my knowledge) even with screw adapters, and they are in trouble without a pro SLR. Olympus unfortunately just got off the bus. Now they are trying to catch the express train to catch up market wise.

Interestingly you can mount Pentax screw lenses on a EOS Canon via adapter but not FD.

Fuji are closing processing plants not because digital is still in boom town mode but because less people are using film as a photographic recording medium, Olympus suffers because the PS market is getting saturated and the 'pro enthusiast' stuff is not selling well enough.

 

[Frank Granovski]

The trouble is they have nothing high-end and they lost their respect after dropping the OM system.

 

[GeneW]

The DSLR market is crowded and competitive. The second-tier companies -- Olympus, Konica Minolta, Pentax -- may not survive. Watch out for Sony -- it is rumoured to have a DSLR in the works. The camera may be nothing special, but Sony marketing is something else again ...

Gene

 

[elcud35rc]

2MP cameras seem like dinosaurs with todays technology. Your 5MP camera seems like the best on your block, but wait a good...year because they are already out with a 8MP. And you are ready to sell it on ebay.

How high with this MEGAPIXEL race go?...100MP?

 

[aad]

Funny-a lab in Pittsfield MA just told me last weeek that he sees his customers returning to film. I'll ask him for numbers.

 

[ch1]

Olympus Profit Plunge on Digital Camera Sales - Click Here

While this may not be breaking news of the immediate demise of digital cameras, it is a bit cheerier news for the survival of film than has been seen in recent days.

Best Regards,

Bill Mattocks

Seems to me that a couple of weeks ago I responded to one of these postings by pointing out that the greater threat was not the demise of film - but the demise of many "traditional" camera makers.

Konica-Minolta is a marriage of "sick cows" neither of whom were ever dominant in any photo/imaging market they entered.

Olympus is an orphan with no franchise beyond cameras and without the capital and innovative capability of Nikon.

Canon is a well-rounded "imaging" company with a diverse product line (except, strangely, for printers) that will likely survive.

Nikon is a world-beater camera company - but even it will have a hard time unless is enters strategic partnerships with other imaging and printing entities (did anyone say - Epson?).

Epson - see above.

Sony and Panasonic: Likely to be successful new entrants in digital P&S given their marketing "clout". More doubtful if they go to DSLR - too narrow a market and unlikely to innovate (but, hey, see comments above on Nikon).

And oh, as to Euro (i.e. Leica etc.) companies - you've got to be kidding. Exploitation of brand for as long as possible - no internal innovation possible- too busy planning their innumberable vacations to be bothered.

As to others - watch the Korean and (eventually) Chinese entrants. Korea (LG, Goldstar etc.) already a player. China now makes for others - question is when will they "breakout" to own brand manufacturing?

The real "cutthroat" competition is in the digital marketplace. I'd hazard a guess that the worst of the "bleeding" in the film area is about done. Marketshare decline will now begin to "flatten" out somewhat from previous percipitous drops.

This is not to say film has a "bright" future - secular decline will continue - just at a slower slope. Few young people are interested in film as an imaging media. I don't see how that can be turned around. But the more interesting thing to watch right now is the shake-out in the camera market.

 

[ywenz]

This is happening probably beause Olympus makes crappy digi cams

 

[Trius]

ywenz: Huh? Others' mileage may vary.

Trius

 

[djon]

Sony and Kodak and Canon are the leading chip makers. Nikon's just along for the ride, which may be smarter than chipping.

Don't dis Epson. They're not serious about amateur cameras but they win at everything they do take seriously, seemingly including Hass-beating MF digital cameras. Same keiretsu as Seiko and Mamiya, same founder : Sekei Mamiya.

 

[RJBender]

This is happening probably beause Olympus makes crappy digi cams

Please tell us why Olympus cameras are crappy. 😕 Thanks.

R.J.

 

[ch1]

Sony and Kodak and Canon are the leading chip makers. Nikon's just along for the ride, which may be smarter than chipping.

Don't dis Epson. They're not serious about amateur cameras but they win at everything they do take seriously, seemingly including Hass-beating MF digital cameras. Same keiretsu as Seiko and Mamiya, same founder : Sekei Mamiya.

Not sure why you see this as a disagreement; althoug Kodak is going to be hard-pressed to compete with other chip makers given its ongoing need to restructure.

Yes, Nikon is a follower and will buy chips - why not?

Nikon's strenght has always been its optics and quality-built cameras. The new D-200 endorses the former (with backward compatability to all Nikkor lenses) and ensures a solid platform in digital format.

No on is "dissin'" Epson. In fact, if you look at the Nikon website - you will see the budding p-ship.

But forget Epson as a camera maker - just look at other threads here to see how disasterous the RD-1 is turning out to be!

For Epson - it's "stick to the knitting" which means printers and paper.

As to kieretsu relationships - they remain somewhat valid but are breaking down. The Koreans and Chinese will put a final end to them as they develop tech transfer contracts across Japanese corporate boundaries.

Final analysis is that the Japanese domination of photography/imaging is ending. Some will undoubtedly survive - others will become "lunch".