Panasonic and Olympus financial reports (making less money with cameras)
The first half of the fiscal year 2010 for the Japanese company Panasonic is extremely profitable but the digital camera and mobile phone sales are in decline. The operating division’s profit is 61.3 billion yen (about € 548 million) – an increase of 481% over the previous year (quarterly figures, see table below). Panasonic attributes the huge increase in profits to reduce fixed costs and economies of scale. Source: Photoscala
The Olympus sales
In the second fiscal quarter of 2010/11 Olympus is continuing the downward trend of their photo section. Overall earnings of the “Imaging sector” decrease of 22.4% over the first half of last year. Source: Photoscala
Share
Recent comments
Comment from bruce: But this above is from November, not a f...- Comment from bruce: I think I found it: http://www.olympus-g...
Comment from admin: Thanks Bruce!
There is no info about a m...- Comment from bruce: Is this it? http://www.reuters.com/artic...
Tobias W.
2 years ago |Should be a wakeup call to Olympus. They have to invest more into their photographic products.
admin
2 years ago |+1
Dummy00001
2 years ago |There is no point of investing into better tech if they can’t sell it.
They need to hire competent marketers – using freed up money after they fire all the loonies responsible for the last Photokina FourThirds debacle.
cL
2 years ago |Or exit the photo market all together. There is the threshold when continuing a project would generate less profit than not running the business at all. Their core business is medical microscope, and it’s very profitable. They really don’t need to run his business except for keeping up the legacy and provide jobs to people.
bilgy_no1
2 years ago |Don’t forget: Japanese companies have been hit hard by developments in the currency markets. Also: how much of decline in sales is down to selling less compacts? I don’t think Olympus released many new compacts in 2010. At least nothing exciting, and mostly low priced models (e.g. their 30x superzoom vs. a much more complete Fuji offering).
Still: should be a wake-up call. Days of unlimited growth in DC’s are over. Compacts are being increasingly replaced by cell phone camera’s. ILC’s is a very competitive market as well.
CR102
2 years ago |The Japanese business strategy considers short term losses as acceptable as long as concrete plans for the long term are in place. A few months back Olympus showed its shareholders a presentation of their future plans. While it wasn’t very specific (obviously), it did include references to modularity and other interesting ideas.
admin
2 years ago |Is there some kind of document about that shareholders presentation?
Bye!
CR102
2 years ago |I’m afraid not. Tried to look for it online with no success.
bruce
2 years ago |I think I found it: http://www.olympus-global.com/en/corc/ir/brief/pdf/n100817aE_n.pdf
There is an audio presentation as well: http://www.olympus-global.com/en/corc/bn/101108wm_en.html
Enjoy!
bruce
2 years ago |But this above is from November, not a few months back…
Fe Oly
2 years ago |I wonder why sales dropped in Europe… the pricing model in Europe is ridicoulus: People ask friends visiting the States to buy the cameras…
In Europe we still have some money to buy but we feel fooled paying those prices compared with other regions, is the shipping cost and taxes so high compared with the States?
Cheers.
davide
2 years ago |I am an European living in the US, so I experienced both markets (I also had a little experience with tech imports/exports in Europe). I hope the following will help understand this issue.
In Europe VAT is about 20% and price is always advertised VAT-included.
So, a product that is on sale in the US for $499 in Europe is often advertised at $600, all being the same (which is not, see below). Consider, though, that US has “sale taxes” more complex and local than VAT, but with the same result. Where I live, the sale taxes are about 8%, so that advertised $499 becomes $540 out of my wallet.
A major issue is the fragmentation of the market in Europe. In the US, you have a single subsidiary (say OlympusUSA) which takes care of everything: importing, distribution, warranties, being sure the products comply with laws, etc. But OlympusUSA can spread its cost among a (theoretical) customer base of hundreds of millions of people.
In Europe there are at least 10 subsidiary, each doing importing, distribution, warranties, being sure the products comply with local laws, etc. In the “etc” there is only the expensive part of translating the manual and possibly the user interface on the camera itself. Each of them will basically duplicate efforts, and have a much smaller base of customers to spread its costs on. So that $600 will be more. In some markets (telescopes), I’ve seen it skyrocketing to $1000 or even more! In photography it’s higher but not crazy, at least.
HTH
davide
2 years ago |Sorry, I made a typo:
In the “etc” there is only the expensive part of translating the manual and possibly the user interface on the camera itself.
I meant there is *also*, not _only_
fta
2 years ago |big deal… you forgot to mention Sony has the same problem…
http://www.sonyalpharumors.com/sony-financial-results-less-money-with-more-cameras/
global recession.. yen… Japan… etc..
Just a bump in the road.
Voldenuit
2 years ago |Sony’s decline in imaging sales was 2.1%. That is a bump in the road.
Olympus’ is 22%. That’s more like driving into a signpost that says ‘Warning: Cliff Ahead’.
David
2 years ago |Well, let’s see. They introduced a very nice camera (EP-2) but priced it too high and left some critical features (for some — read flash) out, put those features in their budget mirrorless, and replaced their flagship camera with a camera that, despite how it may perform, is seen almost universally as a signal that Olympus is dropping trad 4/3. Considering that Olympus never had a large capture of the market, the only thing they really had going for them was loyalty, and image quality. Now Olympus can’t compete on quality (in certain areas, like DR and high ISO noise), and they have alienated their base (who are likely not professionals, and whose investment in Oly glass is even more significant). Either they do something amazing, fast, or I think that might be it for Oly.
Geet
2 years ago |That’s just a reflection of the current global economy. They can’t make it any cheaper nor do much more with current tech than what they’re putting out, it’s already getting hard enough as it is for people to keep up with the incremental changes. We’re all on a waiting pattern here. Ready to land. LOL
Steve
2 years ago |Olympus set a target awhile back, I believe it was that if they did not achieve 20% increased profits in their imaging division then they’d shut it down. Based on their last quarter’s performance of -22%, they are clearly heading for the door unless a miracle happens. Must be a fun place to work about now….
Anyone who has access to that declaration please post it here, I’d appreciate their accurate profitability target.
Steve
2 years ago |And before anyone panics, I believe they stated they had to meet this profitability goal by 2015 or thereabouts. Again, the actual quote from Olympus would be much appreciated. Admin, would you have access to this?
bruce
2 years ago |Is this it? http://www.reuters.com/article/idUSTRE6232FA20100304
admin
2 years ago |Thanks Bruce!
There is no info about a modular camera here