[Mistral75]

They lost big part of that money in risky financial investments, creative accounting with Yakuza included and also by selling some parts of company significantly under-priced.

(...)

The one billion dollar loss was made by Olympus Imaging, not Olympus corporate. This is an operating loss, therefore it does no include profit or loss on financial investments nor capital gains or losses on divestments.

[Rondec]

They lost big part of that money in risky financial investments, creative accounting with Yakuza included and also by selling some parts of company significantly under-priced.

Cameras are not the problem.. company leaders are.

It is not garage factory. They employ over 35 000 people and they are not dependent on camera sales. And remember that they sell more cameras than Ricoh/Pentax...

You do understand that this is just the imaging part of Olympus, so the revenue generated from the sales of all of their cameras less the expenses from making those cameras? That has been a negative number most years recently. Doesn't really have anything to do with the Yakuza or financial investments at all.

There seems to be a disconnect here. The fact that a company releases new products does not mean either that they are generating a profit or that their business is viable long term. It is just what companies do. The reality is that a company like Ricoh Imaging has an easier time generating a profit due to the fact that they have fewer releases and each release is pretty targeted.

---------- Post added 12-03-19 at 05:43 AM ----------

Is it really a billion dollars? Or is that the creative accounting that they are infamous for?

The creative accounting, as I recall, was to hide losses not inflate them.

[Winder]

I'm not sure what you mean "afford to shut it down." If I have a business that has lost me a billion dollars over the last decade, how much do I lose by shuttering it? Obviously if they think the camera market is going to turn around or they personally are going to turn things around, then it makes sense to keep going.

It is just such a cut throat market now. The issue isn't that you can't get good results with micro four thirds, it is that cameras like the Z6 and A7 III are selling in the 1600 to 1700 dollar range. It is hard to imagine anyone but a die hard Olympus devotee purchasing a 2600 dollar micro four thirds camera or even one in the 1200 dollar range.

Odds are that Olympus will restructure, cut new releases way down but not shut things down completely, but I don't think it is going to be an easy situation by any means. Cutting production probably means needing to increase prices and/or sales both of which are going to be really hard to do in this marketplace.

I mean that the consumer imaging is a pretty important part of the company and their identity. I think they are better off staying in the camera business over the long run. Fuji chose to get out and is now back in.


Looking at Black Friday sales, Olympus isn't cutting the price OMD-EM1-2 or the 45mm F/1.2 PRO lens and the sale prices on the products they are cutting are not very deep.


Olympus was mismanaged for years and money they could have gone into R&D and marketing was lost and that has set Olympus back significantly. I have a friend who is a sales manager for a company deals in medical imaging and Olympus is king in that very lucrative field. Olympus need to get lean and they need to learn to market like Sony and Fuji.

[troenaas]

Rumors have the power to become true in people's minds and can have serious consequences.

That is a very unfortunate fact. Some deem fact checking as unnecessary in today's world. If they heard something, from somebody you heard someting, it must be true.

[Mistral75]

...in particular if said somebody is one's 'friend' on Facebook.

To get back on topic (almost... ), an interesting interview:

Interview: Aki Murata of Olympus - 'Full-frame isn't for everybody' | Digital Photography Review

[gaweidert]

Operating losses are interesting things. Kodak had a service division called CSED (Customer Equipment Service Division). It was never allowed to stand as a separate business and had to turn over all revenue it generated to the "lines of business" that it supported. Therefore it always operated at a loss and showed up as an expense item only. Well they sold off the part of the business that supported the Kodak Copier line.


The copier support business "cost" the company $570,000,000 a year to operate. What was interesting was that it generated $1,100,000,000 in rrevenue. If it was a stand alone company it's gross profits were about 55%. All that 1.1 billion dollars was sent to the line of business that made the copiers and they looked amazing on the books. When that disappeared it suddenly became obvious that Kodak was not making money manufacturing copiers. It was making it;s money servicing the machines. This very profitable service business was sold for a paltry $625,000,000 which means that the buyer recouped their money in a little over a year.


I am still convinced that the death of Eastman Kodak Company was an orchestrated event. Certain companies on Wall Street made hundreds of millions of dollars breaking up and selling off the company assets. Any member of senior management who tried to stop this was sent on his or her way "Thanking them for their services and wishing them well in their future endeavors". Having watched this from the inside, no one will ever change my mind about this.


Annual reports can be interesting, but numbers are always manipulated to get the results desired and there are several ways to do this that meet the standard of "Generally Accepted Accounting Practices".

[Mistral75]

^ Whilst I agree with you on the feasibility I don't see why Olympus would have 'loaded the boat' of their Imaging business for eleven and a half years.

[Rondec]

Operating losses are interesting things. Kodak had a service division called CSED (Customer Equipment Service Division). It was never allowed to stand as a separate business and had to turn over all revenue it generated to the "lines of business" that it supported. Therefore it always operated at a loss and showed up as an expense item only. Well they sold off the part of the business that supported the Kodak Copier line.


The copier support business "cost" the company $570,000,000 a year to operate. What was interesting was that it generated $1,100,000,000 in rrevenue. If it was a stand alone company it's gross profits were about 55%. All that 1.1 billion dollars was sent to the line of business that made the copiers and they looked amazing on the books. When that disappeared it suddenly became obvious that Kodak was not making money manufacturing copiers. It was making it;s money servicing the machines. This very profitable service business was sold for a paltry $625,000,000 which means that the buyer recouped their money in a little over a year.


I am still convinced that the death of Eastman Kodak Company was an orchestrated event. Certain companies on Wall Street made hundreds of millions of dollars breaking up and selling off the company assets. Any member of senior management who tried to stop this was sent on his or her way "Thanking them for their services and wishing them well in their future endeavors". Having watched this from the inside, no one will ever change my mind about this.


Annual reports can be interesting, but numbers are always manipulated to get the results desired and there are several ways to do this that meet the standard of "Generally Accepted Accounting Practices".

I feel as though Olympus has generally been pretty protective of the imaging side of their company. Typically they would excuse its losses saying that while it was losing money, R and D for it was helpful with the medical side of the company. It doesn't seem as though they were trying to make it the scapegoat and shift losses in its direction.

What we know, overall, is that the medical device marketplace is booming as Baby Boomers age, while the camera market is doing the opposite. That's a pretty simple explanation for why Olympus's medical and imaging arms aren't performing equally. It really doesn't have much to do with either Olympus turning out bad gear or shifting expenses to that side of the company.

[JDW]

...an interesting interview:

Interview: Aki Murata of Olympus - 'Full-frame isn't for everybody' | Digital Photography Review

Exactly. Which is why I still feel that if indeed Olympus is going out of business like some contend, they sure are putting on a great show to hide it!

[Rondec]

Exactly. Which is why I still feel that if indeed Olympus is going out of business like some contend, they sure are putting on a great show to hide it!

He's a vice president of marketing and the interview was conducted before the Olympus rumors came out. What is he going to say? Just what he did say -- "We have strong products and are excited about the future."

The odd thing to me was that he admitted that while full frame sales are up a bit, other sales are down 20 to 25 percent. At the same time, he seems to think that it just takes the right camera and lens to convince consumers to go with a smaller sensor camera. Apparently that lens is going to be a 150-400mm lens. Strange though, as that seems to be a really niche zoom -- not the sort of lens that most photographers are interested in and certainly not a piece of glass I would want to be pinning my future to.

[Mistral75]

Indeed, it's marketing: he's confident in the future and promotes the latest and next gear.

Do you remember what Enzo Ferrari said when requested which was the best Ferrari ever? 'La prossima' (the next one).

[Kunzite]

Exactly. Which is why I still feel that if indeed Olympus is going out of business like some contend, they sure are putting on a great show to hide it!

Samsung readily admitted they were about the exit the camera business - not. They were actually running "Ditch your DSLR!" campaigns.

[Leumas]

Samsung readily admitted they were about the exit the camera business - not. They were actually running "Ditch your DSLR!" campaigns.

Samsung was hardly Olympus. It's big companies like Samsung and Sony that will drop their camera divisions as soon as they become unprofitable.

[Kunzite]

Samsung was hardly Olympus. It's big companies like Samsung and Sony that will drop their camera divisions as soon as they become unprofitable.

Olympus is unprofitable for over a decade. But the point is about announcing it.
Anyway, at this point I don't see the same signs pointing to Olympus exiting the camera business (canceling products - particularly lenses - and complete silence on the matter).