Olympus Results - Seriously Bad Financial Forecast

Discussion in 'Micro 4/3 News and Rumors' started by Trinurse, May 11, 2014.

  1. Trinurse

    Trinurse Mu-43 Regular

    82
    Feb 26, 2011
    Just read Thom Hogan's assessment http://www.sansmirror.com/newsviews/olympus-results.html of Olympus' FInancial report http://www.olympus-global.com/en/ir/data/annualreport/2013/ and, while the financial aspect is very grim, they seem committed to the high-end, high-margin sector of the mirrorless market. They report posting a 23 billion yen loss last year but seem to have recognized the mistakes they've made and are committed to recovery.

    I agree with his assessment:
    I just hope Olympus' management has the insight and wherewithall to keep it together and not jump from a sinking ship.
     
  2. OzRay

    OzRay Mu-43 Legend

    Jan 29, 2010
    South Gippsland, Australia
    Ray, not Oz
    Thom Hogan has been predicting doom and gloom for years. If you make enough predictions, some must come true eventually.
     
  3. GFFPhoto

    GFFPhoto Mu-43 All-Pro

    Feb 24, 2013
  4. OzRay

    OzRay Mu-43 Legend

    Jan 29, 2010
    South Gippsland, Australia
    Ray, not Oz
    The major issue that affected Olympus was the financial scandal, anything about Olympus has to take that into consideration, as it affects the entire company. Merging the divisions isn't necessarily a bad thing, as both sides are effectively involved in optics and imaging, but for different purposes.
     
  5. GBarrington

    GBarrington Mu-43 Veteran

    I don't think this is something I want to worry about. The Olympus Camera intellectual property is SO important that I don't think Olympus Cameras would go without a highly solvent buyer if it needed to be sold.

    The major worry isn't really, "will Olympus survive?" But rather, "would the changes forced upon it by economic circumstances, allow it to remain the quirky non-standard camera manufacturer it has been for at least 50-75 years?" If it is forced to become "micro-Canon", and only take the safe route, I doubt I would want to buy their products.
     
    • Like Like x 1
  6. GBarrington

    GBarrington Mu-43 Veteran

    This just occurred to me, but merging the two divisions actually can serve to protect Olympus Cameras. Once they are merged it becomes much more difficult to fall prey to the "let's sell the camera division" crowd.
     
  7. OzRay

    OzRay Mu-43 Legend

    Jan 29, 2010
    South Gippsland, Australia
    Ray, not Oz
    Having said that there are synergies between the two divisions there is, on the other hand, the potential for the dominant imaging division to affect the running and future development potential of the camera division. However, if that forces the camera division to re-evaluate what it's producing and makes them focus on value adding products, then it may not be all bad. The first move should be to reduce the number of cameras being made, in both P&S (significantly) as well as M4/3s. Secondly, the camera division should become more proactive in marketing; the imaging division is out there in industry all the time promoting and avidly looking for sales (especially in the medical field). The Olympus camera division barely knows what marketing means. Thirdly, the camera division should re-evaluate what they can produce, to make their 'reduced' camera inventory more attractive and profitable. Olympus could be akin to the 'Porsche' or such of the camera world, where being a small producer (under the VW group) doesn't mean being an unprofitable one.
     
    • Like Like x 1
  8. cptobvious

    cptobvious Mu-43 Veteran

    239
    Jan 8, 2013
    Their SG&A expenses are off the charts. For the past three years, these expenses have gone from 41% of net sales, to 46% (last year), to 51% (this year), mainly due to falling sales. Even though they claimed they would achieve profitability in the past partly by cutting these expenses, it looks like they paid out more in advertising, salaries, and bonuses in FYE 2014 than 2013. The recent lawsuits by Japanese banks against Olympus could be the tipping point.

    Realistically, there'll have to be some consolidation in the mirrorless industry as there are too many players and the demand is not there. For the Micro 4/3 line, I think Oly and Panny should be having discussions about merging the line into/under one company.
     
  9. bobpur

    bobpur Mu-43 Rookie

    21
    Feb 11, 2014
    I just take pictures, I'm sure even if Olympus closes down my cameras won't suddenly stop working.
     
  10. broody

    broody Mu-43 Veteran

    388
    Sep 8, 2013
    Both Oly and Panasonic have already reacted to the contraction of the camera market. Both are releasing less models this year, and IMO they are putting out much more intelligently designed bodies lately.

    About Olympus missing their sales forecast: I remember reading this is because it was a ridiculous figure to begin with. They sold 260k units in Q1/Q2 and raised their forecast to 400k for Q3/Q4. Yeah... was never gonna happen.
     
  11. bikerhiker

    bikerhiker Mu-43 All-Pro

    Dec 24, 2013
    Canada
    David
    The only good news out of this is that Olympus is predicting that they will continue loosing money in future sales. A big shift from denial to final acknowledgement and moving forward positively I hope.:smile:
     
  12. marcsitkin

    marcsitkin Mu-43 Veteran

    307
    Jan 24, 2013
    Harwich, MA USA
    Marc Sitkin
    On a positive note, it was good to see Olympus place some commercials for the EM-10 on the BBC America broadcasts of "Orphan Black". Pretty popular show, hopefully they will get a sales boost as well as an increase in Brand Awareness.
     
  13. fsuscotphoto

    fsuscotphoto Mu-43 Top Veteran

    819
    Feb 15, 2013
    St. Cloud, FL
    Ron
    This weekend Orlando had one of the traveling Oly shows. I was unable to attend but from what I understand it was a very successful event. Another problem, as I see it, is perception. I listen to a lot of podcasts. Most of them rave about the OM-D series. Then then turn around and rave about the mirrorless cameras with APS-C sensors and full frame sensors. I think that those that haven't tried a Oly only hear one thing: larger sensor.
     
  14. BobbyTan

    BobbyTan Mu-43 Top Veteran

    560
    Dec 26, 2013
    Long Beach, CA
    Most people have been brain-washed into thinking that a bigger sensor is better. Well, they are not wrong. A larger sensor is better … but there are trade-offs. A larger sensor means the lenses have to be larger - significantly bigger and heavier - and more expensive too.

    Do I want to see an Olympus camera with a FF sensor? Not really … not unless they can keep the current line of m43 lenses - which is just not possible. So I am hoping to see some significant advancement in sensor development … so the m43 sensor of tomorrow will be as good as a FF sensor of today i.e. in the class as the Nikon D800e and Sony A7r sensor. And I believe it's just a matter of time before we get there.
     
  15. bikerhiker

    bikerhiker Mu-43 All-Pro

    Dec 24, 2013
    Canada
    David
    One word. Confidence!

    People have confidence in both Nikon and Canon and therefore they will always command the majority of the market share. Fuji, Olympus and Panasonic with Ricoh Pentax will always pick up the pieces of what's left.

    The Chinese has a proverb -- Chaos brings opportunity. This is a chaotic time for the photographic industry. Everyone is downsizing R&D as well as manufacturing trying to cut costs and consolidate models, except Nikon. Still, you need people to continue spending money and I fail to see how Olympus is going to convince people to keep spending on cameras that essentially have the same megapixel and not much gain elsewhere.
    The reason why both Nikon and Canon have been brain washing their customers to upgrade to full frame is that, there is a goal for people to spend. This is no different than in America itself, where we pump up the "American Dream". For what purpose? To get people to dream that they have a chance to make it big and rich, but then it serves no spiritual service other than for bragging rights. This is good business. Apple Inc. uses this on their iPhone marketing and so does Samsung. That's why they succeed. If you can not get people to continue spending money, then your business will not survive for very long. So having Olympus produce a full frame isn't a bad thing. Right now, what Olympus has to do is stop the defection of their own m43 customers like they did in the 80s and 90s when they REFUSED to turn their prized manual ZUIKO lenses into AF capable lenses like Nikon and Canon and completely lost out the AF race. I know some stores here that have decided not to carry anymore m43 stuff because it's more profitable to sell Fuji and Sony. Why carry m43 only to have the products backordered. They get customers trading in their m43 equipment for Canon, Nikon, Fuji and Sony. You simply can't continue this defection rate if Olympus insists things are status quo. I think they know this as their sales would probably tell.