Olympus to Increase

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November 11, 2004 — Olympus announced a bold move toward in-house production Tuesday, in an effort to restore profitability to its camera sector. The company currently outsources 60 percent of their camera work, but plans to manufacture at least 50 percent of its cameras in-house in the next year or two.

In the first half of the fiscal year, Olympus experienced slow sales and falling prices, amassing a 57 percent decline in net profits. Early in the fiscal year, Olympus prices dropped an average of 18 percent while digital camera prices in general dropped 15 percent. The problem compounded when consumer interests shifted to low-end models. The company is counting on its improving efficiency, inventory development and some new product introductions to get out of the red. Digital camera sales account for about 41 percent of Olympus’ revenue.

Last year, Olympus and other digital camera manufacturers enjoyed a profitable year, as the market for digital cameras expanded. This year, things have changed. But some companies have still remained profitable. Canon doesn’t outsource any of its work on digital cameras and has taken the number one spot in market share in North America for the past six months. With some changes, Olympus hopes to take at least 20 percent of digital camera sales in North America.

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