What went wrong for Olympus?
Olympus is o -loading its loss-making camera business. Nigel Atherton looks back at the highs and lows, and assesses the company’s prospects
LAST October we celebrated Olympus’s centenary with a special issue looking back at its highlights. Last week it announced that it is selling its camera division after three years of losses, claiming that the digital camera market is no longer profitable. How did it come to this?
Let’s go back to the beginning of the digital revolution. Olympus was a pioneer, with some great compacts, but when it came to DSLRs it didn’t have a decent 35mm SLR to base one upon. So it had to develop a completely new system from scratch, with a new sensor, mount, and lens range – the first designed entirely for the digital era. Olympus could have called it anything – so they decided to name it after an obsolete 1950s TV technology. The name Four Thirds is nonsense; the man responsible should be put into the stocks and bombarded with rotten fruit until the end of time.
But the madness didn’t end there. Four Thirds was based upon a sensor a quarter the size of 35mm film and this enabled Olympus to produce smaller, lighter cameras – a fact emphasised at its launch. So what did the firm decide to launch as its first camera?
Something small and light, perhaps? No.
The E-1 was a chunky pro DSLR, presumably because someone at Olympus thought that all those professional press and sports shooters around the world were just dying to risk their livelihoods by trading in their pro Canon and Nikon kit for an untested new system with a small sensor and hardly any lenses.
Wrong camera, wrong audience
The E-1 was a decent camera but not what Four Thirds was supposed to be about, and Olympus followed it with the frankly weird E-300. It took them four years to remember the point of the small sensor, with the diminutive E- 400, but by then it was probably already working with Panasonic on the new technology that would shortly render it obsolete – and ultimately every other DSLR.
The Micro Four Thirds system, launched at Photokina 2008, heralded the mirrorless era. The Panasonic G1 used the Four Thirds sensor but ditched the SLR mirror to make it smaller. Olympus’s Micro Four Thirds
debut, the Pen E- P1, took inspiration from its classic Pen cameras of the 1950s. It was a thing of beauty, but £700 for a camera with no viewfinder? In hindsight Olympus should have taken its retro design inspiration from its iconic OM system, but it took another three years for the penny to drop.
Finally, in 2012 the OM- D E- M5 was launched and it was magnificent, especially in silver. (Some people preferred the black one but they were wrong). But again, the department for silly names stuck their oar in. What was wrong with just calling it the OM-D5?
Meanwhile the smartphone industry was quietly stealing the camera industry’s lunch. Phone cameras were improving with every generation. Mirrorless cameras were conceived for those phone and compact users who could be tempted to upgrade to an interchangeable lens camera – but not one of those big, heavy and complicated DSLRs that camera nerds used. But over time, most of these people decided that their phone camera was good enough, so this audience disappeared.
Sony, on the other hand, gambled that those camera nerds would also benefit from mirrorless technology but with full-frame sensors offering higher resolution, greater dynamic range and the ability to create super-shallow depth of field. The runaway success of Sony’s mirrorless Alpha 7 system took even Canon
and Nikon by surprise, and left rivals frantically trying to catch up and introduce their own full-frame systems.
Perception versus fact
Olympus’s Micro Four Thirds buddy, Panasonic, found success in the rapidly growing pro video market, while Fujifilm, whose X-system is based upon larger, APS- C sensors, has also expanded into medium format. This leaves Olympus alone in being 100% dependent upon the smallest current mirrorless camera format, in a world that has rightly or wrongly decided that full-frame is better.
That isn’t necessarily true for everyone – for wildlife photographers and others who need long lenses, for example, the opposite is clearly the case. But perception is more powerful than fact, and it is certainly true that larger sensors tend to offer higher resolution and a wider dynamic range. It’s also a lot easier to produce a shallow depth of field.
Ultimately Olympus’s past mistakes don’t much matter now. Sony had barely any market share at all five years ago and now look at them. It’s the current range that counts and Olympus has a great system – with attractive, innovative cameras (its image stabilisation system is almost supernatural in its shakestopping abilities and far better than anyone else’s) and some fantastic lenses, some of which are so tiny that you can fit two or three in a blazer pocket (I’ve done it many times).
But global camera sales are in freefall. For a decade or so they became a mass-market commodity, and now we’re returning to normality, with cameras bought mainly by keen enthusiasts, and the days of annually upgrading to something better are over too, because cameras are now as good as they need to be. Yet photography as a hobby has never been more popular. Smartphones are a gateway drug – millions of phone snappers get addicted to photography and a percentage of them will always be inspired enough to invest in something more serious. Many will want the biggest sensor they can get, others will prefer something lighter, like Micro Four Thirds. There needs to be a choice. Olympus should be able to sustain a profitable business from its camera system if it is properly run.
But here, perhaps, we come to the nub of the problem. Its often-bizarre decisions were just the visible tip of an iceberg of corporate mismanagement that hit the headlines in 2011 with a major financial scandal in which losses of over £1billion were revealed. Add the fact that its camera division is tiny compared with its lucrative medical equipment business, and maybe that’s where things have gone wrong.
With any luck the new owner of the Olympus brand will be blessed with better management. It clearly sees a profitable future for it and I see no reason to not buy into the Olympus system if you were planning to, or stay loyal if you’re already a user. It would be tragic if Olympus were to go the way of Pentax, a once-prestigious brand that now exists in name only and is more associated with spectacles than cameras.