Sony and Olympus’s further collaboration to turn around unprofitable compact-camera business.

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Let’s catch up with some financial news:

Wall Street Journal reports that “Olympus President Hiroyuki Sasa indicated Monday that the company might need further collaboration with Sony to turn around Olympus’s unprofitable compact-camera business.” And Panasonic said that “it will axe another 10,000 jobs” (Source: Reuters).

Overall by reading their reports you will notice that both companies are slowly recovering from the crisis and the forecast is positive. And coming back to Sony’s and Olympus compact-camera strategy…does it make sense to keep their foot in such dying business? The only kind of compact camera that still can stand up against the cameraphones may be the Sony RX100. P.S.: The XZ-1 sells fine (ranking here) but Olympus had to cut the price down to $199 and I doubt they will have some margin on this.

But again, I am not an expert in these kind of analysis. May you can add some more value to that discussion by commenting this post!

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  • http://youdidntdidyou.com/ YouDidntDidYou

    Smartphones are currently been shipped at 30 million units a month and accelerating, it’s pretty hard to compete with them as most of them go out on contract ie percieved as free to the customer.However there will be a small market in speciality compacts eg tough series, childrens compacts,underwater, connected compacts maybe? etc apart from that there will be NO point and shot market in 2-3 years time….

    • Mr. Reeee

      +10
      Spot on!

    • MichaelKJ

      I agree that Oly needs to dump almost all of their P&S cameras. However, their most recent quarterly report indicates that P&Ss accounted for approximately 75% of their camera net sales revenue. Eliminating P&S cameras would reduce the imaging division’s share of company to less than 5%.

      • Boooo!

        Revenue does not equal profits. It is highly unlikely that Olympus is making any profits on point-and-shoot models.

        (Admin, please make the cookies work again. Please.)

        • eret

          Revenue does not equal profits , but removing 75% of the camera division would make the camera division tiny and how much worth is a division that only contributes 5% of Olympus turnover.Even assuming profits are made { big assumption }

    • me

      The phones are not free if they are given away on contract. You know what i mean?

      • El Aura

        The problem is that a lot of carriers only sell you a phone contract bundled with $400 voucher for a new phone. Thus if you want a phone contract, you need to also buy that voucher. And once you have bought it, you might as well spend it.

  • Gekopaca

    Awful and useless compact-camera concepts (Sony) + awful and not so good compact-camera concepts (Olympus) = still unprofitable compact-camera business

  • http://www.flickr.com/photos/purecinema Christian G

    Sound like they’re planning XZ-3 with a 1″ sensor – now that may be the first compact camera I would consider..

    • michael

      Finding a fast, good compact WITH A VIEWFINDER is way harder than it should be. I’d have happily bought an XZ-1 or -2, but didn’t and won’t because I like to actually see what I’m taking a picture of when it’s bright outside.

      Give me a good sensor, fast lens, AND a viewfinder in a pocketable camera and I’ll happily hand over my money.

      • vdtb

        they take the add on vf

  • T-L

    Oh, did they finally realized that cameras with 12-14Mpixels on 1/1000000″ sensor are not going to bring them many customers?
    And there were so many great compact cameras including ultrazooms in the past… they’ve destroyed it all. 😛

  • Miroslav

    I don’t think anyone can turn around unprofitable compact-camera business. It doesn’t make sense to keep the foot in such dying business. It’s like trying to make profit by making film cameras or watches or calculators…

    • MDavid

      What you guys are observing is industry consolidation, and it is indeed the final stage of Industry obsolescence.

      Pocket cameras are phones now- it’s a waste of money for companies to act like 99% of people aren’t perfectly happy with the increasing the fidelity of camera phones.

    • http://www.bythom.com Thom Hogan

      > I don’t think anyone can turn around unprofitable compact-camera business.

      From a functional standpoint, you’re right. As long as companies keep trying to do the same thing in a fast declining market, the market continues to decline. I also find it ironic that Olympus would look to Sony to fix compact cameras when Sony themselves have lost share to others in that very arena. But this seems to be code for “we need to copy the Sony compacts that are getting some interest,” as in RX-100 and RX1.

      However, I actually believe that there’s room to create successful compact cameras and a profitable compact camera business. It won’t happen the way the camera companies are tackling the problem, though.

      > It doesn’t make sense to keep the foot in such dying business.

      You have to look at why it’s dying in order to see a solution. It’s not dying because of megapixels, long focal length zooms, focus performance, or a host of other reasons. It’s dying because compact camera workflow sucks for the person they’re targeting. It’s still “take the film out of the camera and post process it” thinking on the part of camera makers. The reason why people tolerate the lower quality camera phones is that the workflow is better. Far better. And far easier to understand and perform.

      > It’s like trying to make profit by making film cameras or watches or calculators…

      Plenty of companies making profits off of watches and even some making profits off of calculators. The problem for camera makers is that they are thinking “broad consumer electronics market” when that mantle has been taken over by smartphones. They must now think “niche dedicated user market.” The problem with that is that if you’ve been set up to make 6 million widgets a year that sell for an average of <US$200, you're not exactly set up for selling 1 million widgets a year at US$400. Everything from marketing to manufacturing to design is set up wrong and has to be rethought.

      • jim

        “The reason why people tolerate the lower quality camera phones is that the workflow is better.”

        Rather, the IQ is not low – its perfict for 90% of images taken in the world…

        Cameras have become like cars… all will do 100mph, all are reliable and all are ideal for everyday use.

        Only low light, UWA and big zooms require somthing above a good phone cam.

        So rather the reason they tolerate or use phone cameras is because there is no need for compact camers… you have a phone? – the IQ diffrence from a phone to a compact is negligble.

        • Anonymous

          Go 1 further and say – give us an android phone packed with a m43 mount and sensors for everything you can imagine… from temp, tilt, sound, conductivity, humidity, wind speed, moisture, etc etc, witht he ability to link/syncronize via wifi/bluetooth to other android units and flashes/electronic DC/AC contolers and conect the dots with user generated apps!

          Robots that can see :)

          Cameras that are awasom….

        • Ren Kockwell

          If Olympus were a democracy I would vote the esteemed Mr. Thomas Hogan as their President/Prime Minister/CEO. Mr Hogan sees and knows exactly what wrong with companies such as these and has the right solutions to turn things around.

          Vote Thom Hogan for president of Olympus!

      • http://www.hmrc.gov.uk/ HMRC

        “The Business Secretary warned that the government will “get to grips” with companies that have been “deeply angering” the public by paying a fraction of their potential tax liabilities in Britain.

        He hinted that the Chancellor could act as early as next month, in the annual Autumn Statement, to prevent the “systematic abuse”.

        Mr Cable’s outspoken intervention comes after American companies including Starbucks, Google and Amazon were accused of “immoral” behaviour though “industrial scale” tax avoidance.”

  • I used XZ-1

    Nokia N8 has sensor with similar size like XZ-1.
    Nokia 808 Pure View has near 1” sensor like Sonyr RX-100.

    Compacts with sensors 1/2.5” and 1/2.3” has no sense.
    Even with sensors 1/1.63” aren’t so good to compete successfuly with smartphones. Companct with sensor 1/1.63” (or 2/3”) and fast zooms (XZ-1, LX5, X10, G11) are better then smarphones, but haven’t flexibility of smartphones, Wi-Fi, access to internet, etc. And size isn’t much smaller then mirrorless cameras.

    Sensor 1” with fast zoom gives significant better IQ than small sensors from smartphones, but it works with fast zoom (f/2-2.8). Sony make first compact with such big sensor, but zoom is slow at the tele end (f/4.9). But direction is good – RX100 is smaller then XZ-2, and has significantly bigger sensor. But perfect compact should be combination of RX100 and XZ-2. Zoom f/2-2.8 (or even f/1.8-2.5), tiltable OLED, fast AF (like in OM-D), XZ-2 shape and RX100 size. And wi-fi inside (or good cooperation with Wi-Fi SD cards) and apps for smarphones (Android, iOS, Windows Phone, Symbian) to transfer file into internet.

    • Anonymous

      Nokia 808 has a 1/1.2″ sensor, not a 1″ sensor. Still, very impressive, given that the sensor is bigger than a Fuji x10 or an Olympus XZ-2.

    • http://www.43rumors.com/members/sderdiarian/ SteveO

      Actually, the perfect compact would have a f1.4-2.3 zoom like the Samsung EX-2 but with 24-120mm reach like the S110, add-on lens for longer zoom and macro like E-PM/E-PL3, corner mounted EVF, super slim tilt LCD or OLED that doesn’t add significant bulk or weight, wi-fi, apps and gps.

      And then if you really want to sell a ton of them, also have it work as a phone that you can buy on a plan. Convergence.

      The future appears to be cell phones cannibalizing sales of compacts other than high end and toughs, mirrorless cannibalizing sales of DSLR’s and high end compacts like the RX100 cannibalizing sales of both DSLR’s and mirrorless. Doesn’t leave camera manufacturers a whole lot to sell.

      It’s funny, these are like the golden days for compacts (RX100), mirrorless (OM-D) and DSLR’s (D600 and D800). Yet their overall audience is diminishing as casual users (i.e., the bulk of purchasers that keep manufacturers afloat) migrate in herds to smartphones. The Nokia 808 is the true future, sure to be copied by Apple, Samsung and HTC.

      And the one thing camera manufacturers are completely blind to is the appeal of larger high quality touch screens, now up to 4.8″ in the hottest selling Samsung and HTC . People actually enjoy seeing and sharing what they take images of, duh!

  • Dannecus

    I think YouDidntDidYou pretty much covered it. The average compact user is only interested in convenience and simplicity. If they had much interest in photography they would soon realise that compacts were unable to help with that.

    Now phones & tablets have a reasonable camera, capable of supplying enough IQ for social media the whole reason for compact cameras as a separate device has gone away. Other than a few specialist models,they will go the way of VHS within five of years.

    The cleverer HiFi manufacturers have already abandoned compact disk, let’s see a similar brave move by Sony/Oly and Panny to abandon the loss making segment and put the savings into R&D for mirrorless.

    • Johnny V

      I agree 100% with your comment ” wi-fi inside (or good cooperation with Wi-Fi SD cards) and apps for smarphones (Android, iOS, Windows Phone, Symbian) to transfer file into internet.”
      People today are so used to easily sending photos to Facebook or email directly from there phones right after taking a photo that they don’t even bother using there compact camera anymore. They need to have apps on there cameras that send directly to Facebook, email etc.. through wifi and do it so its relatively simple with a touchscreen interface. like pressing a icon on your screen while playing back a pic or vid and having the option to send it wherever you like.

    • Raist3d

      Actually compacts can help with photography not all depends what photography you are doing. Xz-2, rx100, Q, lx-7 are all very capable cameras for some domains. Photography is about seeing by far more than anything else.

      • Raist3d

        Meant to say: it all depends

  • Dannecus

    @ Admin
    Any chance we can fix the issue of the site forgetting our credentials? I have to log in every day now. It used to just remember me.

    • admin

      I am pushing my designer to fix this!

  • compact & mirrorless

    IMO nice set, which complement one another, can be compact with 1 inch sensor and fast zoom, and mirrorless camera with primes. For example zoom f/2.8 (eqiv. 24-100mm) and OM-D with 12/2, 17/1.8, 45/1.8 or/and 75/1.8 (and macro if somebody like it).
    Compact with 1” sensor and f/2.8 (or faster) zoom gives similar IQ then micro43 with slow zoom (f/3.5-5.6).

  • http://www.mirrorlessworld.com Atlasman

    The images coming from the smartphones is more than sufficient—even to many photo enthusiast.

    Where greater synergies could arise between Olympus and Sony is via inter format compatibility. Imagine a Full frame that also supports APS-C and m4/3!

    • Anonymous

      A full frame format where we have shitty compatibility with m4/3 so we have to buy lenses again while our m4/3 equipment slowly becomes worthless – now that is something I actually can image! It would feel like a deja vu!

  • http://www.43rumors.com/members/spencerberus/ Spencer Salva

    They might have better luck in the compact camera market if they added a phone feature to their cameras. Also, a web browser, Facebook widget, messaging and the ability to play Angry Birds.

  • RX101

    I sold all of my m43 gear and bought a Sony RX100. I had good lenses like Pana 7-14mm, Pana 12-35mm, Oly 45mm and so on. I don’t see much difference in IQ, but I have much more money now and I travel lighter than before. No more huge bags with several lenses to drag with me, no more huge tripods and no more lens buying because I needed that sweet prime lens or whatever I needed at that time.

    Good serious P&S with big sensors like RX100 are a welcomed product and the only photographic tool I will ever buy and use (except for my iPhone).

    I shoot RAW and do not need WIFI, Android etc. in my camera, the only thing I would like is a built-in GPS. If I want an instant upload I just use my iPhone.

    http://www.youtube.com/user/dslrgearnoidea

    • Anonymous

      This is true, but a P&S is never going to do lots of things.

      For example the 7-9mm range cannot be replicated with P&S. You can’t get 75mm f/1.8 in a P&S. For that matter, you can’t even get 45mm f/1.8. You also can’t get proper macro like you can with 60mm f/2.8.

      However, you are correct that people shooting a crop camera with nothing but the standard kit lens will probably do well buying an RX100.

      • Raist3d

        But that really depends on *what* he wants, not on what you think you want or need. If he doesn’t need to shoot in the focal lengths you mention, then to him that reason is irrelevant. For many people it would also be irrelevant, and carrying ONE camera with a lens on at all times would be a more compelling reason.

        This does not make everyone, but sure there’s more than a few here.

    • Alonso

      @RX101: I see some regret here… or, what are you doing here my friend if you’re so happy with your new P&S?

      • RX101

        No regret, Im here because I wanted to read some rumors about Sony/Oly. I own a P&S that fits in my pocket that have about the same IQ as my E-M5, the only regret is that I bought all the m43’s gear in the first place.

        The cheap P&S market is not dead, they just have to clean it up. They have too many products out there.

        Not everyone can afford a cellphone with a good camera.

        • Alonso

          I understand…. you suggest that all m4/3 is obselete now that we have the RX100, that fantastic camera. So maybe your expectation now is for a very pocktable P&S that can beat the D800. The P&S market is so exciting now I can’t wait for the upcoming models…. Maybe my next phone will lead me to sell everything too, crossed fingers… 😉

          • Raist3d

            Seems to me if someone is insecure it’s you. He simply stated how it works for him, and now you feel like your favorite system is threatened or something. Just because something works for him better shouldn’t mean that the same would work for you or what works for you stops working.

            And just because he found a solution to his problem different than yours doesn’t mean he really did not solve it.

        • Alonso

          😀 just kidding RX! But I would agree if you stated the it can substitute an epm1+kit alike setup…

  • FatDrunkAndStupid

    I think a big part of their woes also might have to do with the fact Olympus’ compacts have traditionally been pretty lousy in terms of IQ- same as Sony. If you are just a regular person buying a point and shoot, you should buy a Canon. The only people buying basic point and shoots from Oly are people who are ignorant of the general quality of the various brands. And I don’t think the compact camera is completely dead like some of you make out. Phones still don’t have the zoom range of travel compacts, and their flash systems are far inferior too. But yeah, the market is shrinking, and that puts pressure on the crappiest point and shoot manufacturers first, and none are crappier than Sony and Oly when it comes to basic point and shoots. They both need to scrap their basic offerings and concentrate more on the premium compact market where they actually have compelling products. Oly needs to come out with an RX100 competitor ASAP. Panny too for that matter.

  • Raist3d

    “Overall by reading their reports you will notice that both companies are slowly recovering from the crisis and the forecast is positive”

    I honestly don’t see how you can say this admin. Sony just got their credit rating downgraded to just above junk status, Panasonic reported yet another record loss and Olympus is asking a company with a lot Of troubles for help.

    It’s really a tough time for japanese companies right now along with many around the world.

  • http://www.43rumors.com/members/edwardm/ Edward

    The camera companies also make far too many models of compact cameras. They should simplify their product line ups and probably produce about 2-3 compact models. Keep it simple for the consumer and reduce costs through increased volumes.

    • BdV

      That’s right, plastic snap shooters have largely been eaten by smart phones, but this is an XZ-1, not to sure if this one too has already been surpassed by a phone… and 199 is really a remarkable price. 2/3 of the price of for instance an LX5. Why? I didn’t ask them, but I think it’s a bit too soon to say the compact camera market in general is now as good as dead.

  • http://www.flickriver.com/photos/photography-by-thomas/ TheEye

    The run-of-the-mill P&S market may well be dead. Every 5-year old and their gramma carry a cellphone.

    I don’t believe the enthusiast compact market is dead. I also belive that consumers and camera manufactuers will figure out that there is something as “too damn small” for compact system cameras. A camera that takes interchangeable lenses shouldn’t be a de facto dongle. Remember how cellphones shrunk from brick size to thumbsize, then back to a more convenient and sensible size (before the advent of the smartphone, which necessitates a large screen).

  • beautemps

    The cheap compact camera market is lost for ever.
    It is a question of education and lifestyle! Young people don’t care for audio-, foto- or videoquality. It is like junkfood, they didnt learn to train their taste.

    Today even professional FF Fotographers copy the style of Smartphone-Portraits! If you want a Portrait uptodate, it has to look like from a smartphone with a wide angle lens and badly iluminated. Professionals are copying the facebookstyle!

    So the markte is shared. The masses with smartphone-style and a few highquality cameras for enthusiasts, who are willing to spend a lot of money for their hobby. There is nothing in between.

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