Despite its sale to an investment firm, the Olympus brand "will be maintained for the time being" and there are no plans to outsource manufacturing or pull out of any markets. However, key R&D staff may not be transferred over, and the company may move into consumer products like surveillance cameras.
Those are the key takeaways from an interview with Shinichi Inagaki, managing director of Japan Industrial Products (JIP) – the firm that is purchasing Olympus' imaging division.
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In the first interview since the announcement of the acquisition – which will be completed by end of the year, with the contract by the end of September, though the final price has not yet been decided – Inagaki assuaged fears that popular cameras like the Olympus OM-D E-M5 Mark III would lose the brand name after the sale, and only be called 'OM-D E-M5 Mark III'.
"The Olympus brand will be maintained for the time being, and the maintenance of sold products will be continued," it was confirmed to Toyokeizai Online (hat tip to Digital Camera Info).
JIP's success in carving out Sony's Vaio brand into a profitable standalone company was cited, due to key similarities such as being a smaller division within a larger corporation whose key interests lay elsewhere (in the case of Olympus, its core medical division was the focus, which is why profitability was not sustained with the imaging business).
However, while that experience will be drawn upon, Inagaki confirmed that some steps taken to make Vaio profitable – namely the outsourcing of manufacturing and withdrawing from key markets like Europe – will not be the case with Olympus.
"Unlike VAIO, there is no idea of withdrawing from the overseas market, and we will continue to sell overseas in Europe, which is our main market," said Inagaki. "We are still discussing production systems such as factories, but we have no plans to make it fabless, such as leaving the main factory in Vietnam."
Surveillance cameras, R&D, and profit within 1 year
Inagaki noted the lack of wider vision at Olympus, which inhibited the corporation from fully leveraging and expanding its camera business.
"By carefully examining the features of the camera business that were not visible inside Olympus and finding out in which market the features will live… [we will] make a scale and system that fits that market, and take on challenges lightly. I feel empirically that if we can do it, we will experience strengths in the shrinking digital camera market.”
Crucially, Inagaki stated the importance of taking Olympus' core technology into broader areas. So, while "the Micro Four Thirds market will be evaluated at a certain scale both in Japan and abroad", going forward it will also "be essential to find promising new markets" and move beyond its existing camera offerings.
"From a medium- to long-term perspective, we are also considering various markets such as consumer products specialized for video and business such as surveillance cameras. It is said that it is necessary to find the optimal market by repeating challenges beyond the current Olympus camera lineup."
However, acquiring the research and development staff to achieve this may not be as straightforward as initially planned. There is currently concern as to how much of Olympus Imaging's human resource will be part of the JIP transaction – and in particular, the key personnel and R&D teams that Olympus has been siphoning away from imaging to its core medical division.
"The problem with curve-out from a large company is that R&D personnel do not follow the carve-out destination," said Inagaki. "It is in negotiations."
Ultimately, though, JIP is in this for the long haul. The firm believes that, rather than just closing factories and culling staff in order to cut costs, the goal is to achieve sustainable profit – and Inagaki believes that profit is possible in the first year of acquisition. "After that, instead of selling it to external companies, we will search for a way to [achieve] revival under JIP."
It's an intriguing time for the storied camera brand. No doubt more concrete future plans will be announced after the sale is signed off at the end of the month.
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