Monday, January 13, 2014
Will Olympus Disappear?
Every year, various financial publications love to put out link bait in the form of "dying companies" lists. You know the type. The headline is usually "X Companies Fated To Die in 2014," or "Which Companies Won't Be Around in 2015?"
Well, one company that's getting a lot of attention is Olympus. 24/7 Wall Street has put Ol' Oly on the chopping block for 2014, and aside from the Oly faithful who are screaming no, I find little to disagree with. Olympus is in bad shape.
This is heavily Olympus' fault, too. They have tried desperately to be a premium brand while what they sell can never be premium. A 4/3 crop sensor is never going to be adopted by wide swaths of the photographic world, especially those with significant budgets.
That should have been fine. The prices for the 4/3 sensor are much lower than full-frame sensors, and the prices for lenses are much lower as well. If Olympus had passed these prices on to consumers, I think that Micro 4/3 could have been the dominant crop system on the market, providing good enough image quality for a significantly reduced size and price.
Olympus hasn't done that, though. Panasonic hasn't done that. Indeed, Panasonic's recent 42.5mm lens for sixteen-hundred-fucking-dollars shows how deep the delusion runs. Panasonic's previous high-end lenses, the 12-35mm and the 35-100mm, only ever sold in volume when discounted.1 So instead of lowering prices to compete, they just keep charging ahead, confident for some unknown reason that their fortunes will turn around.
You know that definition of insanity, where you try the same thing repeatedly while expecting different results? Yeah. This isn't bloody quantum mechanics. It's camera sales.
The article at 24/7 Wall Street says that "Except for market leaders like Canon, Sony and Nikon, no one wants to be in the digital camera business anymore." That's only true because everyone wants to be Canon and Nikon! They all want to have the same robust customer base from which to squeeze money.
THAT'S NEVER GOING TO HAPPEN.
Canon and Nikon reached their dominance because of fundamental technological shifts in the camera market. First came the rise of autofocus, then finally, the killer blow for old-world companies: digital. The Japanese companies were perfectly situated to take advantage of the technological shift.
Unless Olympus has some technological shift up their sleeves, they will never, ever, ever, ever, ever, ever, ever, ever, achieve the success of Canon and Nikon.
So, not surprisingly, companies that are not trying to be the next Canon and Nikon are making waves. Fuji released its own 80mm-ish portrait lens for only $1,000. Sigma's Art line of lenses continues to upset the lens status quo. If your company is willing to actually compete, there is opportunity in the camera industry. Death only comes from following the leaders.
Panasonic is perhaps in better shape because they made waves. When the GH1 and GH2 came out, they were unique. They were cheap, compact cameras that produced video quality that met or exceeded cameras that were many times its price. If Blackmagic had not released its line of Cinema cameras, Panasonic would still be viable.
Olympus has nothing but the success of the E-M5 and the as-yet-unknown success of the E-M1. Panasonic had never relied on compact camera sales for their revenue as Olympus did. And even here, Olympus utterly failed to produce a response to the Sony RX100. Instead, Panasonic does! While I think the GM1 is a stupid camera, it is a genuine response to the RX100 that plays at least a bit to the strengths of the m4/3 system. What did Olympus produce? Yet another small-sensored, over-priced piece of crap.
An important point that many people are making is that a company does not need to have significant market share to be a success. That is true. It is also naive. In a highly competitive industry that requires engineers, research, and manufacturing, if a company does not have sizable revenues, they are inherently unstable. They could be stomped on by the leaders at any moment, and that's where Olympus sits: right under the feet of the leaders.
In the end, all of this is unfortunate. The E-M1 is a wonderful camera. It is fast and powerful. It is a great tool for producing images. Because in the end, that's what a camera does. It produces images. But when the market is so filled with excellent image-creating tools, Olympus needs to bring its A-game in every way possible. They aren't doing that. They're not even really bringing their A-game in any way.
This is a good time to mention something very important: while Olympus and Panasonic are weak and stupid, the Micro 4/3 market is not weak. It is becoming the system for low to mid-range video equipment, and the release of the Blackmagic cameras in m4/3 mount have all but solidified it as the choice for enthusiast, semi-pro, and pro videographers. The upcoming GH4 4K further excites the m4/3 market for video.
Seriously, if you are a videographer, go out and buy some m4/3 hardware immediately.
But for photography, m4/3 has some significant problems that its constituents are doing poorly at remedying. Olympus needs more lenses like its 75mm f/1.8, which is still its only exceptional lens. Olympus needs to ditch its absurd 4/3 lenses and stop pretending like they're going to do something with them. In all ways, Olympus needs to stop pussyfooting around, focus on a few things, break new ground, and do so at a price lower than everyone else. They need to disrupt the market.
Because they're currently the shortest person on the dance floor, and the other dancers all have big feet.
1: I am making that statement based on limited information. It could be wrong, but I suspect not.