June 24—Olympus Corporation, which has manufactured cameras since 1936, announced today it is selling its imaging business for an undeclared sum. In a disclosure notice, the organization explained it is carving out its iconic unit because it has been a money-losing segment for three consecutive fiscal years.
Japan Industrial Partners, Inc. (JIP) has agreed to acquire Olympus’ camera assets and will maintain its legacy in a new company.
What Happened to Olympus’ Imaging Segment?
As noted in its disclosure, Olympus has been a leading innovator in the photography business for decades. The company even remained relevant after the advent of digital cameras by developing innovative new products. For instance, the firm’s Micro Four Thirds system, co-created with Panasonic, successfully bridged the gap between consumer product accessibility and professional-grade equipment performance.
However, the corporation eventually found itself outmatched as time went on.
Instead of being displaced by another brand, it lost relevancy as smartphone makers replicated and surpassed its products’ capabilities. The corporation indirectly admitted that despite its best efforts, it could not compete with contemporary handset manufacturers. Indeed, Apple and Samsung now market their flagship mobile devices by highlighting multifaceted lenses and robust picture-taking capacity.
Although Olympus once stood as a camera industry pillar, the business only generated 5.46 percent of fiscal year revenue in 2019. The company presently derives the majority of its sales from its various medical equipment offerings. Facing increasing investor pressure to improve its financial picture, the firm made the difficult decision to sell off its most well-known segment.
What will Happen to Olympus’s Camera Brands?
As of this writing, the status of beloved Olympus brands like OM-D and Zuiko is unclear but somewhat promising.
The erstwhile camera manufacturer noted JIP’s upcoming holding company would release new imaging products and support current device owners. Moreover, the firm said JIP would attempt to grow its new property with continuing research and development efforts. However, the Japanese private equity concern also plans to make its legacy corporation “compact, efficient, and agile,” which indicates some operational downsizing will be forthcoming.
In 2014, JIP bought Sony’s VAIO holdings under similar conditions to its Olympus assets acquisition. Following a period of protracted declining computer sales, the PlayStation maker divested its PC line for a reported $490 million. Over the next four years, the investment management group rehabbed the brand with a series of strategic partnerships and new product launches. With any luck, JIP will win back the hearts and minds of prosumer camera fans with some digital imaging technology advances in the near future.
Regulatory approval permitting, Olympus and JIP intend to close the transaction on December 31. However, in terms of the history of photography, it is fair to say June 24 is the unofficial end of an era.