Ever since Olympus announced its intention to transfer its imaging business to Japan Industrial Partners, Inc. (JIP), on June 24, we’ve been anxious to learn further details. For 84 years, the Olympus brand has been synonymous with innovative camera technology and unique product development. What effects will this transfer have on the current and upcoming Olympus product line? What will it mean for photographers who currently use Olympus camera gear?
For a better understanding of this matter, we recently asked Mr. Aki Murata, president of Olympus America’s Consumer Products Group, to respond to a few questions about this recent announcement, provide some background about JIP, and offer his insights about what the future may bring.
Can you please provide more context on Olympus’s recent announcement?
On June 24, Olympus signed a memorandum of understanding (MOU) with Japan Industrial Partners, Inc. (JIP). According to the MOU, both companies are committed to further discussions about the transfer of Olympus’s long-standing Imaging business to JIP by the end of 2020. Importantly, the MOU with JIP is a reflection of our intention to revitalize our Imaging business.
The catalyst to this decision has been a third year of consecutive financial losses amid a declining market and a corporate transformation that is focused on growth within Olympus’s medical technology division.
While the biggest driver of the Imaging Division’s financial loss was factory relocation, which slowed the speed of new product launches, we are proud to say that we have since recovered and grown our market share to a higher level versus that which preceded our factory relocation.
The camera market as a whole is declining and unstable, especially over the past four months. Therefore, it became clear that Olympus needed to look to restructure our organization to adapt to the changing market.
With Olympus’s transformation goal of becoming a sustainable leading global med-tech company, Olympus will be devoting a significant portion of our investment resources to areas outside of the Imaging Division. Therefore, it became appropriate for us to identify a partner who can focus solely on revitalizing our consumer Imaging business.
As a next step, Olympus and JIP are working towards the signing of a DA (definitive agreement) at the end of September, after due diligence. The actual transfer would be executed at the end of December.
Who will provide support for Olympus photographers during and after the transfer? What will the impact be on Olympus warranties?
The transfer is not expected to affect Olympus’s service offerings. Olympus’s Authorized Repair Centers will continue business as usual. Services such as repairs and warranty claims will be honored for Olympus-branded products both during and after the transfer. Customers can schedule service and/or repairs by visiting: learnandsupport.getolympus.com/repair. Customers currently making purchase decisions should feel confident that their Olympus products will continue to be supported in the future.
Will new cameras and lenses be released?
Absolutely! Again, we are working to revitalize the business under the new leadership. Our R&D team will remain and will continue to develop high-quality camera systems and audio products. In fact, to demonstrate our continued commitment to our customers and to our product lines, we made several announcements last week, including the future of M.Zuiko lens products. Our announcements also included the availability of a free software allowing many OM-D customers to utilize their Olympus cameras as a webcam for video streaming, named OM-D Webcam Beta, compatible with the Olympus E-M1X, E-M1, E-M1 Mark II, E-M1 Mark III and E-M5 Mark II cameras.
Will firmware updates continue?
Last week, Olympus announced the development of a future firmware update to support birding photographers with the addition of Bird Detection to the OM-D E-M1X camera’s Intelligent Subject Detection AF. The firmware is scheduled for release this winter.
Are there any plans for expanding into new areas of the photo market after the transfer?
With our Micro Four Thirds (MFT) Standard mirrorless interchangeable lens systems, our product lineup offers unique benefits that other camera manufacturers do not have the ability to offer. We will continue to pursue these benefits and develop MFT system products that are aligned with the needs of photographers of genres in which our unique features shine, such as Wildlife, Bird, Field Macro, and Adventure Landscape photography. Our pursuit of fields like these are reflective of our commitment to compact lightweight system technology.
Will a new name be created?
The Olympus brand name will remain at the time of transfer. The name will likely not be used forever, but that decision will be made in the final agreement between Olympus and JIP.
What is Japan Industrial Partners, and does it have experience in the photo industry?
JIP has extensive experience with carve-outs (or spin-offs), where it supports companies in the process of relinquishing businesses or subsidiaries, providing the necessary investments to accomplish the business’s growth potential as an independently operated entity. This is why we believe JIP is an optimal partner.
With the support of JIP, we believe the consumer Imaging business will have the ability to build a foundation for improving profit structure and managing the business over the medium to long term as a new company, while accumulating innovative technologies and developing a solid brand position in the market.
While JIP has no experience specifically in the photo industry, they do have a track record of acquiring and rebuilding consumer brands.
What has been its track record buying consumer brands?
As mentioned above, JIP is an organization focused on corporate restructuring, which manages and operates an investment fund. In previous years, JIP acquired VAIO from Sony and rebuilt that brand.
What is the future of Olympus’s Imaging business?
While no one can predict the future, we believe this transfer will be the best step to preserving the Olympus brand legacy, our technologies, and our outstanding products.
The current market environment is extremely challenging. Therefore, we decided to begin making changes now to ensure we can continue providing our products and services to customers. We will continue to advance our goal of leading in the Outdoor Niche photography category by focusing on the previously mentioned photography fields. Our future product development, strategies, and organization will be based on these priorities.
What can Olympus users expect to see in terms of changes? Is there any relevant part of the business that is not being transferred to JIP?
It is too early to predict what changes could take place, as details of the transfer are still being negotiated. The transfer will include all product categories currently managed by our Imaging Division. Olympus’s Medical, Life Sciences, and Industrial Solutions divisions will not be included in the transfer.
Why should prospective camera buyers be comfortable investing in Olympus products today?
During the ongoing discussions, Olympus’s consumer Imaging business will continue as usual. Our sales, service, and marketing departments will continue to work hard to support customers with our outstanding products and services. There are no plans to change our product launch plans in 2020. Products that have been announced as under development will be introduced to the market as planned.
Again, Olympus views this transfer as an opportunity to enable its Imaging Division to continue providing value to both new and experienced photographers. We are excited for the future of our consumer products and what the new organization and our communities will create together.
What are your thoughts about the Olympus announcement to transfer its imaging business to JIP? Let us know in the Comments section, below.