Olympus Has Fallen – Who’S Next?

Olympus has Fallen – Who’s next? In better days – The tough, compact OM-4Ti with the 50mm f1.2 Zuiko was an iconic film SLR of the late 1980s. In a move that will surprise few watchers of the camera industry, Olympus is selling their camera business to Japan Industrial Partners, a private equity group that specializes in helping troubled companies spin off insolvent businesses. JIP is most famous for having bought the VAIO computer business from Sony in 2014, which it spun off as a separate company that sells computers mostly in Japan, although a few models have made it to niche markets in other countries. In the press release, Olympus and JIP claim that the business will continue to make and sell cameras. It is unclear whether or not the Olympus brand name will survive on cameras, or whether that will be retained exclusively by the much larger medical equipment division (Olympus Imaging is about 6% of Olympus, a maker of medical and scientific equipment). The Zuiko and OM-D brands are specifically mentioned in the press release as going to the new company (which has the placeholder name NewCo in the release). Is what they’re calling NewCo in the press release viable? Can anyone run an independent camera company (that, oddly, also makes digital voice recorders) with annual sales of just under 50 billion Yen ($500 million)? It is the sixth largest player in the global interchangeable lens camera market, far behind Canon, Sony, Nikon and Fujifilm. Olympus’ camera business is about 10% the size of Canon’s or Sony’s by revenue, less than 15% the size of Nikon’s, and a little over 1/3 the size of Fujifilm’s. In fifth place just ahead of Olympus is probably Leica, which is comparable in annual camera revenue to Olympus, but relies on high- end collector cameras for a significant portion of its sales, and, unlike Olympus’ camera division, is either profitable now, or was prior to the coronavirus. The places below Olympus are occupied by Pentax (a little over 1/3 the size of Olympus, hard to see how it can survive, but see below), probably Panasonic (whose sales are hard to discern, but somewhere between Pentax and Olympus?), Hasselblad and Phase One. Have you seen one of these lately? The E-PL10 sells fairly well in parts of Asia, but is very uncommon elsewhere. #286 seller among mirrorless cameras on B&H (the first Olympus is #33) It is hard to see how what was once Olympus can survive with the product line we have known. Keeping a full mirrorless system with professional-grade lenses going is an expensive proposition, and one that is probably not justified by Olympus’ sales. Sales of cameras we barely see in the West are relatively strong in Japan and some other parts of Asia. Olympus sells quite a few low-end, very compact Micro 4/3 cameras that outperform phones, but are more pocketable than anything that has significant sales in North America and Europe. Many Western observers don’t realize that the Olympus PEN line still exists, associating Olympus exclusively with the OM-D series. There are, in fact three current PEN models, of which the highest-end PEN-F is the only one that (briefly) attracted any notice in the American or European press. That’s also where a lot of Canon’s EOS-M sales are probably going, as well as the lowest-end Fujifilm products that don’t (or barely) make it to these shores. An unusual Japanese-market phone (from Kyocera). It’s about the size of a credit card. Japan and Asia more generally transitioned to mirrorless well ahead of other parts of the world, and very pocketable electronics have always sold especially well in Asian markets. In the pre-smartphone era, there were tiny wonders of cell phones that existed only in Japan, and made a StarTAC look bulky by comparison. Some exist today, as much smaller alternatives to smartphones. The Japanese market has also featured a collection of sub 1-lb “laptops” for many years, very few of which officially make it overseas. Keeping some pocketable PEN cameras and a few compact lenses in the line for markets where they sell would be much easier than maintaining the OM-D line and the high-quality lenses they need to thrive. Another possibility that doesn’t require much effort is Olympus’ TOUGH compact camera line. In addition to a few interchangeable-lens models for markets where compactness is prized, and possibly some specialized compact cameras, what else might JIP want from Olympus’ camera business? It would be a shame to see their class-leading image stabilization go away – could some other company license the technology? They also have better pixel-shift technology than anyone else (Olympus can assemble the shifted image in camera, and even claim a handheld pixel-shift mode). Some of their success with both stabilization and pixel shift is due to the small sensor, but they have excellent technology as well. Thom Hogan also points out Olympus’ excellent optical design group. Some of those Zuiko Pro lenses are really beautiful designs. Any Japanese company trying to expand their lens lineup (which would mean Sony, Nikon, Fujifilm and possibly even Canon, although Canon has a very large internal capability) could benefit. The engineers could leave “NewCo”, either individually or as a group. The other possibility is that “NewCo” sells the optical design group to one of the major camera makers (or possibly a lensmaker), including patents and designs. For it to be attractive, many of the engineers would need to agree to come along. Sony’s lens group came from just such a transaction – they bought it with Konica-Minolta’s camera business. Konica-Minolta also still has a lens design group that does contract work, and Olympus could keep all or part of the lens design operation for themselves instead of selling it all to JIP (it’s one of the most likely parts of the business to be useful in their medical work). A lens design operation that remained within Olympus could certainly do contract work for “NewCo”, but there’s nothing keeping them from contracting with other camera firms, either Another possibility is brand licensing – it is unclear if Japan Industrial Partners has control of the Olympus brand for camera products, but they do have the venerable Zuiko lens brand and the OM-D camera brand. Best case: Some Android phones with “Zuiko” lenses, just like some have “Leica” lenses. Worst case: Grand old Olympus branding applied to cheap Samyang/Rokinon type lenses for a variety of mounts, possibly other photographic products too (including things Olympus never actually made). Look at Vivitar now, or at Polaroid until the Impossible Project recently wrestled that trademark back from the junk dealers. An Olympus-provided size comparison between an OM-D with a 300mm f4 and a generic full- frame DSLR with a 600mmf4 with the same field of view. If you don’t mind the loss of two stops of subject isolation, the size comparison is right on. The Olympus combo is also about $10,000 cheaper! Probably the biggest loss as we lose at least the majority of Olympus’ product line is (by far) the cheapest and lightest true sports camera on the market. An E-M1 (any version) really was a baby Nikon D5 or Canon EOS-1Dx or Sony A9. They hadn’t had the money to keep up with the latest versions of the big sports cameras, but they were real sports cameras. Super high speeds, pound tent pegs and wash it with a hose durability – oh, and they happened to use lenses that were half as long as their full frame competitors. Subject isolation was always a problem, because they really needed lenses that were half as long, but two stops faster (which would be just as bulky as the lens needed on full-frame) – but if you were willing to live with that limitation, you could have a 15 fps, subject-tracking monster with a big lens for a lot less money and weight than anywhere else. What’s the replacement? A Nikon D7500 with the 300mm f4 PF? That’s a capable body, not too big – and the PF lens is MUCH smaller than a 300mm f4 is supposed to be! A Z6 or Z50 with the same lens and the FTZ is also an option. The other possibility is a Canon body (EF or RF) with their version of a 300mm f4 – too bad it isn’t a DO lens. Nobody else really has the right lens – a Fujifilm X-T4 would be a great body, but what’s the lens? There’s the 55-200 f3.5-4.8, but that’s on the shorter and slower side, and not quite up to the rest of these lenses (or a Zuiko Pro lens) optically. There’s also the exotic 200mm f2, but that’s no longer a relatively reasonably priced setup for high school or small-college sports. Sony has some great bodies, led by the A7 III (this is supposed to be affordable, thus no A9) – but the lenses are all zooms that are going to be pretty slow (f5.6 or slower) by 300mm, until you get to the big exotics like the 400mmf2.8. What if you own an Olympus system? It’s not going to stop working when they discontinue it, and they are claiming that repairs will continue to be available. Supposedly, “NewCo” is taking over Olympus service worldwide.

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