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Old Dec 18, 2013, 8:18 AM   #1
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Join Date: May 2003
Posts: 98
Default Olympus is Falling

Saw this a while ago but it showed up again so I thought I post it for those who may not have seen it.
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Except for market leaders like Canon (CAJ), Sony (SNE) and Nikon (NINOY), no one wants to be in the digital camera business anymore. Worldwide unit sales fell 18 percent in the two years following their peak in 2010, and the decline is accelerating this year.

It is no surprise, then, that Olympus (OCPNY), which only has 7 percent market share, has failed to generate a profit from its imaging business in any of the past three years. The decline caught the company’s management off guard. Actual sales were less than two-thirds of forecasts.

For the next fiscal year, the outlook is grim. Olympus expects compact camera sales to fall from 5.1 million to 2.7 million units worldwide. A major reason for declining sales has been the increased adoption of smartphones -- which now offer lenses and chips that capture high-quality images -- as an alternative to digital cameras. Based on increased interest in high-end cameras, the company plans to focus on increasing sales of SLR cameras, which accounted for just 35 percent of its imaging business.

Meanwhile, sales of its largest camera segment, compact cameras, will be cut in half. Of concern to investors, the company has pledged to stop issuing dividends until the camera business is restored to profitability.
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