Olympus Imaging in Tokyo has said it will drop its low-end V series of compact cameras – the cheapest in its lineup – and has lowered its 2013 target for camera sales to 2.7 million units, dramatically down from the 5.1 million cameras sold in its financial year to March.
Olympus has also shed 3400 imaging staff, and plans more job cuts, amid a worse-than-predicted decline in compact camera sales. In the past 12 months the company has reduced its imaging division workforce by around 30 percent.
Beyond its popular and highly-rated PEN range of mirrorless cameras, Olympus has strengths in highly-featured models such as weatherproof cameras and ultra-zooms, which are less exposed to the smartphone onslaught.
Olympus Australia has to a certain extent anticipated head office moves: ‘We made a local decision last year to reduce the number of entry level models to focus our energy and efforts on the Tough, Traveller and Creator categories,’ said Olympus Imaging Australia managing director, Marc Raddatt. ‘We have just launched two new Creator models, the XZ10 and XZ2; three new tough models, the TG630, TG830 and TG2; and two new Traveller models, the SH50 and SZ16.
‘We will continue to develop and market products that fall into these categories, offering consumers high quality and differentiated products suitable for individual photographic needs.’
And locally, there will be a V-series camera continuing in the portfolio: ‘We are launching the VH520 next month, which will be a very stylish and highly specified competitor in this [low end] segment of the market, and the product will be available until the new year.
Olympus predicts a 30 drop in compact camera revenue, countered by a rise in interchangeable-lens cameras of 32 percent over the next year.
It is safe to say that all camera makers (and retailers) competing in the low end, sub-$300 segment have suffered as smartphones establish themselves as a replacement technology. Market leader Canon has also experienced a hit on compacts, with a declined of 37 percent from the first quarter of 2012 to first quarter 2013. The interchangeable-lens camera segment dropped 15 percent.
Olympus admits it significantly underestimated the slide in compact camera sales, which were (by coincidence) 37 percent less than forecast, and failed to respond quickly enough to market changes.
Olympus has also announced that it will reduce manufacturing plants from five to two: one in Shenzhen, China; and one in Vietnam.
It also announced a consolidation of its overseas sales bases and a reduction in sales channels. However Mr Raddatt told Photo Counter ‘our local operation is not subject to any change.’
On a positive note, the Olympus group as a whole returned to profit just 18 months after the massive accounting scandal exposed by former CEO Michael Woodford.