With the increase in technology, smartphones seem to be getting better and better. Let’s look at the cameras on smartphones for example. The iPhone 5’s camera is 8-megapixels while the new Samsung Galaxy S4’s camera is 13-megapixels. To make it even more convenient for users, these high quality cameras on smartphones also have access to various photo apps to upload and share pictures. These apps are often linked with Facebook, Twitter, and you know the rest of the list. Now with all that being said, are people still purchasing point-and-shoot cameras? Do people even remember what a point-and-shoot camera is? This huge craze with smartphones with all the features they offer makes it seem like point-and-shoot cameras are ancient. With the popular photo app Instagram announcing that their monthly users have passed 100 million, it’s safe to say that people don’t need point-and-shoot cameras anymore. Although nobody may be thinking about these cameras anymore, the manufacturers have suffered from the neglect.
Olympus Corp., a Japanese camera maker, has caught on to the trend of smartphone cameras and the various photo apps and has decided to drop out of that market. Olympus has decided to eliminate its compact cameras which sell for less than $200. Their camera business suffered a loss in the last fiscal year through March because the market for compact cameras was so small, or even nearing nonexistence. The situation Olympus Corp. is currently in ties in with a topic covered in class: Quality Function Deployment. The first step of QFD is to identify the customer wants. In the age of smartphones, it’s safe to say that consumers want a phone that has numerous features which include a high definition camera. People want more things in one, which makes it more convenient for them. Why carry a phone and a compact camera when you can just carry one smartphone? Remember those annoying and somewhat unfashionable pouches for compact cameras back in the day? The next thing on the list for QFD is identifying how a company’s good will satisfy the customer wants. If people are wanting smartphones with nice cameras that have access to photo apps, compact cameras are clearly not satisfying these customer wants. As you continue down the list for Quality Function Deployment, the last check mark is evaluating competing products. Now for Olympus Corp., do they evaluate themselves compared to camera makers such as Canon, Nikon, Sony, etc. and base these evaluations off which company suffered the least, or do they compare themselves to smartphones?
It seems as if Olympus Corp. is comparing themselves to smartphones which resulted in the elimination of their compact cameras. With their biggest business coming from medical equipment, Olympus has chosen to focus on high-end cameras with interchangeable lenses. Of course medical equipment has a whole different Quality Function Deployment, but that’s another topic. Do you think Olympus is making the right decision by withdrawing from the compact camera market? What do they need to do in order to succeed in the medical equipment market? Will compact cameras eventually be wiped out for good?
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?