Olympus corporate update and new DSLRs?

Fujifilm declares its hand in bid to be strategic partner

And is Olympus preparing to return to the DSLR market?

Things at Olympus HQ in Tokyo must be a little less hectic in recent days after the threat of de-listing from the Tokyo Stock Exchange was recently lifted. The next big event on the Olympus corporate calendar is a shareholder AGM that will appoint a new board to replace the existing, some would say tainted, one. It's that new board that will have to make an early decision on the direction that the company to should take in order to shore up its financial situation after the billion dollar black hole in its finances and associated cover-up was exposed by sacked president and CEO, Michael Woodford.

Woodford had hoped lead the new board and generate new cash from the company through a rights issue, where existing investors inject the cash required, a strategy common in the West, but rare in Japanese financial circles. Now Woodford is out of the picture the strategy favoured by the current board is to find a strategic partner to bail the company out. This week Fujifilm Holdings Corp. declared that it was an ideal partner for Olympus. Another medical imaging company, Terumo Corp., which already owns 2.1% of Olympus stock, declared that it would be interested in strengthening its relationship with Olympus.

Medical imaging business interest

Unfortunately, for Four Thirds User readers and Olympus camera fans in general, interest in Olympus is almost entirely focused on the lucrative medical imaging division. Olympus is the world leader in endoscopes and has 70% of the global market. Fujifilm, although best known for it photographic businesses, is quite a large player in medical imaging and competes with Olympus in some areas of the endoscope business. Fujifilm doesn't think there would be major issue concerning monopoly if they joined forces with Olympus as they say that their medical imaging businesses are largely complementary. However, where would such a tie-up leave the camera division, which has been a loss-maker in recent years?

Olympus can claim some recent success in the Japanese system camera market. According to Japanese market data Olympus came out on top in terms of mirrorless system camera sales last year, even out-selling Panasonic Lumix. But Olympus is less strong overall in international markets. Nevertheless, there is potential there as Micro Four Thirds continues to grow and mature. Panasonic has indicated that it is not interested in becoming a strategic partner beyond its existing technical relationship with Olympus as a member of the Four Thirds consortium and co-founder, with Olympus, of the Micro Four Thirds consortium. Panasonic's semiconductor division also supplies sensors to Olympus, although there is growing specification that Olympus' next system camera, widely believed to be called OM-D, will be fitted with a sensor sourced away from Panasonic.

If Olympus is propped up by a partner that is not interested in the camera division, what will that mean? A similar thing happened to Pentax. Hoya acquired Pentax for its medical imaging business. The development of Pentax cameras did continue under the ownership of Hoya, but many regard that period in Pentax's history as stifling for the camera division. Last year the camera business was sold to Ricoh and we should soon witness the fruits of this tie-up. But who could partner Olympus for its camera business? Fujifilm has been a silent partner in the Four Thirds consortium but has not extended this to membership of the growing Micro Four Thirds consortium. Fujifilm has launched a new mirrorless system camera, the X-Pro1 and, arguably, it complements Micro Four Thirds. But Olympus and Fujifilm are director competitors in the bread and butter compact camera market.

Sigma has a close relationship with Olympus. There is evidence that Sigma manufactures some products for Olympus and they have certainly shared designs, like the 70-300 zoom. Sigma make fine lenses but they have yet to establish themselves as an accomplished camera manufacturer, despite years of trying. Technically, they look like a great fit, but whether or not Sigma, which is still a family run business, has the financial weight and interest is far from clear.

Samsung is a Korean company and also a competitor with Micro Four Thirds and Olympus' compact cameras, so a partnership there looks unlikely, although some think Olympus may now be turning to Samsung to source Micro Four Thirds sensors. Sony has been looking at entering the medical imaging market through Olympus. But again, on the camera side Olympus is a direct competitor. Casio has been a long term player in the compact camera business and is not a competitor in system cameras. Unfortunately, Casio itself has been experiencing some problems and is probably not in a position to capitalise on a partnership with Olympus.

Meanwhile, I can't see Nikon or Canon coming to the aid of Olympus, unless Canon wants a quick entry into compact system cameras. Nikon recently launched its Nikon 1 system. So the question over the Olympus camera division remains unclear.

Is a new Olympus DSLR on its way?

The Olympus camera division must hunker down and continue along its own path and not be too distracted by the corporate turmoil generated by it former and current bosses. The evidence to that is in the forthcoming Micro Four Thirds camera launch that is being stoked up by a campaign of teaser ads and apparent leaks in recent weeks. We are being lead to believe that a new system camera, with a built in electronic viewfinder, will be launched to coincide with the forthcoming CP+ photo industry trade show in Yokohama early in February.

It looks pretty clear that the new camera will be a Micro Four Thirds type but there has been some speculation concerning the possibility of Olympus making a return to the DSLR market, with the first Four Thirds DSLR since the E-5 was launched at Photokina some 16 months ago. Olympus refuse to confirm definitively that the E-5 was their last DSLR. More positively, there have been several statements from company representatives that while mirrorless cameras are the future, the technology can't yet produce a solution for those who need the specific benefits of a DSLR. I was told by Akira Watanabe, who is in charge of camera product planning at Olympus, that the E-5 was profitable and also boosted sales of Zuiko Digital Four Thirds lenses, especially expensive Top Pro lenses. The E-5 benefitted from parts developed for the, then, new Pen Micro Four Thirds cameras and it's my hope and wish that Olympus repeat this exercise with a successor to the E-5, possibly incorporating parts developed for the expected OM-D. So how about it, Olympus?

Meanwhile, looking further into the future, I think that the future for Four Thirds has to be linked directly with Micro Four Thirds. Although you can already use Four Thirds lenses on a Micro Four Thirds body, Four Thirds lenses don't autofocus well because Micro Four Thirds bodies. This is because Four Thirds, like all recent AF SLRs, use a range-finding phase-detect focus system. Four Thirds DSLR lenses have focus motors geared and optimised for phase-detect AF. To make these lenses work well on a mirrorless body would require a clever solution like that already conceived by Sony. This employs a phase-detect AF system built into an adapter that fits between Sony Alpha DSLR lenses and Sony's NEX compact system camera (mirrorless) bodies. I've used it and it works brilliantly. Again, only speculation, but some Olympus patent filings hint at a solution that could one day deliver a similar solution to Sony's and so bring full Four Thirds lens performance to Micro Four Thirds camera users.

Our coverage of the big launch next week

But that's enough speculation for now. The immediate focus is on what Olympus has up its sleeves for 8th February. All I can say is that here at FTU we will have in-depth detailed coverage of what Olympus unveils as soon as the press embargo lifts. See you then!