Can Olympus survive?

Discussion in 'Olympus Cameras' started by soundimageplus, Nov 8, 2011.

  1. soundimageplus

    soundimageplus Mu-43 Top Veteran

    782
    Feb 2, 2010
    Worcestershire
    As one half of m4/3 Olympus is a pretty important component of our "photographic universe". Like everyone else I've been watching the saga evolve, and this morning further revelations appeared, with Olympus admitting it has hidden losses for 20 years. Currently it has lost over 70% of its value.

    I wrote the piece below for my blog this morning.

    "What started as seemingly some kind of "cultural dispute" between senior executives at Olympus is turning into a major financial scandal. The company has now admitted hiding losses for 20 years and has currently lost 70% of its value. It seems unlikely that we can expect anything on the camera front for some time to come, if at all. It would be a shame if a company with an illustrious history in camera design and manufacture were to disappear, but with shocking revelation after shocking revelation and the scale of the figures involved, it seems unlikely that there will ever be a return to "business as usual".

    Its possible the brand and its current products can be picked up by another company and survive in some way but any notion of it continuing as before is surely impossible.

    For the latest on what is proving to be an endless stream of ever more damaging revelations, here's a link to the Reuters website.

    Olympus admits it hid losses for decades | Reuters"
     

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  2. VinVin

    VinVin Mu-43 Veteran

    255
    Jun 7, 2010
    GTA, Canada
    Kevin
    I hope they survive... I love their products!
     
  3. xdayv

    xdayv Color Blind

    Aug 26, 2011
    Tacloban City, Philippines
    Dave
    this has big implication on micro four thirds. hopefully they clean up the mess and continue their legacy...
     
  4. goldenlight

    goldenlight Mu-43 All-Pro

    Jan 30, 2010
    Essex
    John
    Serious as they are, it's not the mistakes/crimes of the past that are important (to us as customers, rather than investors) it is whether or not the company is still financially sound and able to continue manufacturing and trading. Assuming Olympus are still in that position there is no reason why they should not grow from this. If they have managed to be a successful company despite such a long history of financial mis-management, think how successful they can be in the future, with the right management.

    It's a good think that the rot has finally been exposed and I think that in the long term this is a positive thing. :smile:
     
  5. zacster

    zacster Mu-43 Regular

    72
    Nov 4, 2011
    It was like waking up from a dream this morning, to an NPR teaser about Olympus. I've been obsessed with learning all I could about the Mini and then I heard the name on the radio while still asleep...

    I'm actually skeptical about their survival chances. They could be out of money and the banks won't be lending with this kind of news. It's a shame, as the latest batch of cameras have been well received. Maybe somebody will buy the operations and keep it running.
     
  6. Rudi

    Rudi Mu-43 Top Veteran

    574
    Aug 16, 2010
    Australia
    Yep. The whole system could end up as yet another dead-end. I hope it won't, but it wouldn't take much for someone like Canon (only used as an example of a photographic company with real clout, and since Nikon have already decided on a different path with their mirrorless offerings) to offer a better alternative with a larger sensor than m43, and a more extensive lens line-up than m43 has at the moment (which wouldn't be exactly difficult, as it stands right now :smile: ). Kinda like Sony are attempting to do, but less half-assed. :biggrin:
     
  7. rex87

    rex87 Mu-43 Regular

    192
    Jun 21, 2011
    winnipeg, mb
    I thought PANASONIC is buying OLYMPUS imaging division?.
     
  8. John M Flores

    John M Flores Mu-43 All-Pro

    Jan 7, 2011
    Somerville, NJ
    It's a sad story. I'm hoping that Ricoh will buy them. They just bought Pentax
     
  9. soundimageplus

    soundimageplus Mu-43 Top Veteran

    782
    Feb 2, 2010
    Worcestershire
    Just how long can you make a loss for? To a certain extent assets, including property, patents, stock, etc. can keep a company technically afloat, but in a global recession, the worth of those is hardly increasing.

    At some point these long term and consistent losses have to be addressed and where does the finance come from to "sort the company out"?

    "Creative accounting" works for a while, but when the whole world suddenly becomes aware of those practices then there is real trouble.

    Can they get back to some state of operating reasonably normally again? Probably not without some drastic changes. Its been well documented that the camera division is a loss maker, so where does that leave its future?

    Does this camera division have any attraction for other companies? Since apart from its compact cameras its based around a format that only Panasonic share, who knows.

    Not sure about anybody else, but I'm assuming that there will be nothing coming from Olympus cameras for quite some while. If it does survive or gets taken over, what are the implications for those who invested in the systems? There is probably little chance of Olympus as a camera manufacturer surviving intact, "rationalisation" must be the order of the day.

    What does this mean for warranties, servicing, spare parts, distribution? What impact does this have for its partner Panasonic, who supply it with sensors and sell lenses to Olympus m4/3 owners? Panasonic may "mop up" some Olympus business, but ultimately the less manufacturers involved the possibility of the system becoming more commonplace must surely be open to question.

    I was thinking that this was maybe just a "corruption" issue but these recent revelations seem to reveal a long term deception concerning just have badly the company has been doing. We may well have another Enron in the making and that didn't end well.
     
  10. Narnian

    Narnian Nobody in particular ...

    Aug 6, 2010
    Midlothian, VA
    Richard Elliott
    I would think Olympus would be a good buy for several companies to get the name and the medical division. Samsung and Samyang come to mind.
     
  11. Fred49

    Fred49 Mu-43 Regular

    169
    Feb 24, 2010
    FRance
    olympus

    Im happy i can use my m4/3 lens on a pana body, otherwise i would be selling them asap.
     
  12. fredlong

    fredlong Just this guy...

    Apr 18, 2011
    Massachusetts USA
    Fred
    If they've been cooking the books how do we know the camera division loses money. They may be protecting their primary product lines, medical and optical devices.

    Until there's some kind of unbiased audit and leadership changes there's no reason to trust any information coming out of the corporation.
     
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  13. WT21

    WT21 Mu-43 Hall of Famer

    Feb 19, 2010
    Boston
    Hadn't thought of that, but you are right. There really is no telling what's going on, though given how they managed the 43 to m43 migration, I'm not hopeful ,though, that the camera division is doing anything other than losing money.

    I've got to think that there's a buyer for Olympus out there somewhere.
     
  14. soundimageplus

    soundimageplus Mu-43 Top Veteran

    782
    Feb 2, 2010
    Worcestershire
    If it comes to it, and the situation is that the Olympus camera division is "up for grabs" who would be interested in it? A large part of its range involves the 4/3 sensor, which they only share with Panasonic.

    Would a company like Ricoh or Samsung want to get involved with a format thats a direct competitor to what they offer? In many ways Pentax dovetail nicely with Ricoh, offering things they don't, such as 645, the Q system, and of course DSLR's. Ricoh already have their own GXR system.

    Would Panasonic be interested? If so how would that work? Could they offer two seperate brands? Seems unlikely. Could they just absorb the Olympus expertise and patents? If so would the Olympus cameras many of us like so much still have that identity?

    And there is a distinct Olympus identity, but I'm having a hard time seeing how it would fit in with somebody else. If possible, some kind of rescue and reorganisation package may well be the best solution, but thats bound to come at a cost. If Olympus survives as a camera maker, can anybody see 4/3 DSLR's and lenses still being part of the plan? I'm assuming not.

    Any re-organisation must surely involve a lot of analysis of what sells and what doesn't, what something costs to produce and the per unit profit. I doubt that 4/3 DSLR cameras and lenses are big sellers and profit generators and are surely destined for the axe. m4/3 has been successful and is something that could still continue to be so.

    I'm still unsure as to whether Olympus will survive at all as a camera brand but if it does it must be in a somewhat "slimmed down" form than it is now.
     
    • Like Like x 1
  15. Djarum

    Djarum Super Moderator

    Dec 15, 2009
    Huntsville, AL, USA
    Jason
    The thing with stocks is that they can be over valued or under valued. Speculation these days drives stocks more than real value.

    Now, in saying that, I have no idea what the real books look like for Olympus as a whole, including all divisions.
     
  16. WT21

    WT21 Mu-43 Hall of Famer

    Feb 19, 2010
    Boston
    David, Sadly you are making far too much sense :(

    But, if Oly were to go under, can Panny sustain m43 on it's own? I have to ask myself, if I was looking at just Panny vs. Nex, which would I buy? A big part of the reason I'm in m43 is the Oly bodies. Would Panny infuse an Oly camera division with cash? Panny might need Oly to keep m43 alive. (weirder things have happened -- Microsoft saved Apple with cash after Jobs returned to Apple, so anything's possible)

    I think I'm just going to stop thinking about it, and go take some pictures :biggrin:
     
  17. krugorg

    krugorg Mu-43 Hall of Famer

    Jul 18, 2011
    Minnesota USA
    Enron? Come on, really? You forgot to say "see, I told you so!" :rolleyes: I understood your decision to switch to Nex based on your needs & requirements. I do not think *this* backs up your decision, though, or that it will be quite as bad as you speculate.

    I am not a stock market or corporate finance guy, so I don't know what I don't know, but a rapid stock devaluation does not suddenly mean that Olympus doesn't have cash to operate. Their endoscope division posted a $900m plus profit in this past fiscal year.

    There will be a big shakeup at Olympus and eventually the stock price will turn around. In the meantime, I think it very unrealistic that new products (in the pipeline) are going to be cancelled or that, all of a sudden, you no longer have warranty on your Pen.

    Long term, who knows, maybe this will force Oly to sell off their less-than-profitable consumer camera business. I am not happy about this overall ethical deal, but I am a little surprised at "doom and gloom" response to something where we have very little to actually go on.
     
  18. WT21

    WT21 Mu-43 Hall of Famer

    Feb 19, 2010
    Boston
    Companies survive on cash, not earnings. Earnings are accountings way of tracking revenue to expenses, but, for instance, a major plant could be built, that will then be metered out (depreciated) over some set time. That depreciation comes as an expense and reduces earnings each year, even though (perhaps) the cash was actually spent 5 years ago.

    I've not studied Oly's books, so I've no idea their statement of cash flows, but that's the real question as to whether they will remain ongoing or not. What's their cash assets, and what's their cash flow.

    Someone else, though, pointed out that if you are a health care organization, are you going to buy expensive endoscope equipment from a vendor that suddenly looks shaky. I think that's the bigger threat to Oly than what happens with the camera division.

    My EPL2 still works this morning, though, so it seems unaffected by what's going on at corporate.
     
    • Like Like x 2
  19. Djarum

    Djarum Super Moderator

    Dec 15, 2009
    Huntsville, AL, USA
    Jason
    :rofl:

    Mine does too!
     
  20. nueces snapper

    nueces snapper Mu-43 All-Pro

    Well I'm glad I only have a couple grand invested in this system. Doesn't look like I'll be trading up from it though. I'll just happily keep using it for the next couple years while I save up for my jump to Sony I guess.: :roll eyes:

    Hope Amin has a plan for his next forum or internet venture.

    Wait a minute. That makes me think. Panasonic needs to keep the Oly camera division viable. They may take it over and straighten it out just to keep m4/3 alive. The genre really needs at least two manufacturers.

    Or Samsung may see this as a way to get in on m4/3 at the top level with full control. It's a perfect system really and I suspect others have not joined in on it exactly because of Oly's poor management ( very likely well known by insiders within the industry ). hmmmmmmmm