Olympus Reduces their Camera Lineup

As technology continues to advance, companies that are built around tech-based products are being forced to alter their tactics to avoid growing deficits in the market. Olympus is currently facing such difficulty with regards to their cheaper line of cameras. The fact of the matter is that cameras are now becoming mainstay secondary functions in phones, tablets, and the like. These devices such as smartphones are often offering more quality and pixels than the competing cameras Olympus offers on the lower side of the price spectrum. It doesn’t help Olympus’ case that something like a smartphones offers the ability to quickly share pictures rather than the more lengthy process of a typical compact camera.

As a result Olympus is reducing their product strategy by cutting the low cost option. Something like a camera is considered to be in the mature stage of the product lifecycle, and the standardized camera can already be found on existing devices. Accordingly Olympus will be placing more emphasis on higher-end models and reducing their product line. Their new objective is attempting to focus more on the differentiation that expensive lenses offer to consumers. Interestingly enough is that while lenses can be unique in their mechanics, they’re still standardized to be used for a variety of cameras. This means Olympus can put their effort into an already reliable camera design and construct more lenses around that which can be used interchangeably. Modular design is a simple way for companies to provide variety for consumers while cutting production costs.

It should be noted that it’s not just Olympus that is suffering in the market. Canon, arguably one of the most well-known brands, had a 34% decline in net profit according to the article. The same surge of profit loss can likely be said for any company doing business with stand-alone cameras. Canon to me seems like a company that focuses heavily on their expensive cameras and lenses, and yet they’re still suffering from such losses.

I’ve never known much about Olympus as their cameras always seemed to be low-rated when it came to their offerings for compact cameras. The article I read, however, really surprised me. Their biggest business isn’t even cameras, it’s medical equipment. I looked on their website and they offer a variety of devices for endoscopy, ultrasound, and so on. One could easily imagine that medical equipment is on the rise now more than ever before when considering the aging population.

Do you think it would be more beneficial for Olympus to completely cut all their camera offerings, and focus on their more profitable sectors (e.g. medical equipment)? Is there still a place for cheaper cameras amidst the evolving smartphone market? Could Olympus possibly offer anything for their expensive lenses/cameras that would cripple strong contenders like Canon?

Sources
http://blogs.wsj.com/digits/2013/05/16/olympus-to-drop-cheap-point-and-shoot-cameras/
http://www.olympusamerica.com/index.asp

The Future of Games

After approximately 7 years with the current generation of video game consoles, the upcoming holiday season is looking to be huge for Microsoft and Sony. In February Sony announced the Playstation 4 along with a variety of features and specs, games, and a general release window of holiday 2013. Microsoft has yet to announce their console, known to the press as Durango, but are expected to unveil it at E3 2013. (E3 is the Electronic Entertainment Expo where the major contenders in the industry each hold their biggest press events and announce the latest titles in their brand.)

Both of these companies must tread carefully, as a new system is both a considerable time and money expenditure. This past November Nintendo released the follow-up to their Wii, the Wii U, to a lukewarm reception. The line-up of games initially released with the console weren’t exceptionally outstanding or used the unique qualities of the system to display the potential of the Wii U. Perhaps the biggest mistake Nintendo made was not knowing their audience. Why was the Wii so popular? Because of the accessibility it presented to consumers of any age that could just pick up a controller and play. Clearly the higher-ups in the company could not recreate this unique selling point for the Wii U.

What are the challenges Sony and Microsoft face? There’s clearly a variety of them. They’ll most likely never gain the accessibility that a system such as Wii offers, and instead will aim for that through peripherals such as the Xbox 360’s Kinect. As a result of the economic slump there’s likely more emphasis on the system being affordable; however, the addition of recent technology in the new systems means that they’ll probably be selling for upwards of $400 to $500. Moreover the systems need a good set of exclusive games and developer names associated with them. If 2 different systems are released at similar price points and the features are relatively the same, oftentimes the deciding factor are the games that a consumer can only get on one system and not the other.

The final point I’d like to mention is that both Sony and Microsoft need to have awareness in the manufacturing of their consoles. Going back to the Wii example, during the initial release of the Wii units were often backlogged for weeks or months and would-be buyers had difficulty finding systems. This means there might’ve been a possible loss of sales as consumers gave up trying to buy a Wii. Sony and Microsoft need to ensure an adequate amount of stock for the first season of their new consoles.

Do you think the recent recession will have a huge impact on the sales of these new systems? Will Nintendo be able to recover from the mediocre release of the Wii U? What will be the deciding factor of what consumers choose to purchase?