• Nikon launches an 800mm f/5.6 which is becoming the biggest product of its catalog.
• Canon is still testing the all-new, all-beautiful 200-400mm f/4 (with integrated 1.4x f)
• Sony should renew its 70-400mm with an evolution whose content is still quite unclear.

These lenses will certainly be nearly impossible to purchase without winning the Lottery or holding a bank up (but from what I hear about their financial situation, even this may not be a viable option) but they may be attracting the attention of a few pro photogs and triggering some dreams from sports and wildlife photographers.

Now that smoke and dust are settling down we can see more clearly (it produced a small hike up in the stock prices and we heard that the rumors of mafia crime implication are no longer credible). The financial status stays very difficult, at best. All the analysts are agreeing on the prediction of a capital raise to bring some new cash (though it will certainly get the previous owners and the current management expelled).

But the conditions are ill chosen. Specifically, Olympus has a tough choice to make:

1. either they wait for the troubles to fade out, and the company will run out of cash; They will have to sell parts, the photo division now becomes “the crown’s jewels” to be auctioned off, if it happens soon.
2. or they try to quickly raise new funds on the market [1], and the management will be quickly shown the exit door by the new owners.

In this last case, the big question is “Who would want of that?” The names most commonly heard are:

• Sony: They have enough free cash, but what would they look for in such a mess, except a fast investment with an even faster cash out?
• Fujifilm: They are already present on very similar markets (Medical Imaging and Photography) but they may loose even their shirt and their boots at this table. According to Reuters, they did not decide yet.
• Panasonic: could be interested in grabbing some patents, some designers and the means to reboot its own photo camera business.

So, we will have to stay alert for news in this beginning of the year to know how Olympus will end: Eaten by a raider or lightened by a severe diet?

It’s now time to look back at the year behind us and try and see what is coming in 2012.

2011

Two features were really striking in 2011:

1. Natural disasters: The earthquake in Japan and the floods in Thailand have been claiming lives and hitting hard on the photography industry.
2. Sony had a glowing track of new products.

The Spring 2011 earthquake in Japan was right in front of major photo industries and we all remember that the consequences have been devastating for both the Japanese people and an industry whose main centers were very near the epicenter. Nikon was certainly among the first victims, but nearly all other companies stumbled.

As if that was not enough, Thailand experienced heavy floods that are just now beginning to really recede. Again, Nikon was a very visible victim.

The employees of all these companies fought for both their security and the well-being of their companies. Some of them even succeeded in avoiding some of the most visible impacts. For example, nearly no sales were lost during the Christmas season, but this came from hard work more than actual luck.

Despite these tough conditions, Sony has made impressive announcements both in the DSLR camera and hybrid camera markets. You may think what you want of the qualities of the new semi-transparent mirrors for the Alpha SLR series and of the APS-C hybrid NEX cameras with inter-changeable lenses, they both brought new features, new ideas and even new ways to look at a digital camera that all other photo companies now need to take into account.

The Sony Alpha 77 (and the Alpha 65) appeared as a major step forward and the NEX-7 and NEX-5n have been such a commercial success that Sony is currently reviewing their strategy to cash quickly on these.

Add to these that some actors left or nearly left the field (Kodak selling the last parts of the photography business, Olympus fighting for its life after the surprising financial decisions of its former management) and we have a pretty unusual year on our hands.

2012

So, what will a new year bring to the photographers? We all know that reading the future is an exercise that is both humbling and funny when you look back at last year’s predictions. But, there are a few elements that can already be plotted and should not be too far from the mark.

• Sony will extend quickly the lens list for the NEX family. Probably adding new cameras in the second half of 2012.
• Sony will produce two (maybe three) new Full Frame SLR cameras to replace the old Alpha 900. Resolution may be enormous since they will probably apply the technology from the existing 24-MP APS-C sensor, leading to something like a 33-MP sensor (or more if their engineers have a bit of fun with silicon wafers).
• Nikon, which has seen all its plans delayed by Mother Nature, will launch first a D4 (11 fps, 16 MP, up to ISO 102400 or ISO 204800) and a D800 (33 MP or 36 MP, up to ISO 25600, at 4 fps), then could well launch a replacement to the D7000 and D300s (either a D7100 with heavy body or D400).
• Nikon could also start at least a new entry-level camera around the end of 2012.
• Canon is going to replace the EOS 5D MkII (no surprise) but they could be preparing radically new products for entry-level photo markets.
• Pentax needs to find new directions now that it is in the hands of Ricoh. 2012 should be interesting: Either Ricoh will merely scrap the SLR business or they will launch a new family of cameras in 2012.
• Olympus cannot launch anything significant before they -really- find closure to their financial woes. It has already been so long that the chances of survival are probably under 50% now even if a buyer appears.
• Samsung is probably no longer trying to fight in the SLR market, but will keep adding to their hybrid line of digital cameras. They could become a major actor, annoying even Sony here.
• Panasonic will have a hard time finding ways renewing the 4/3 and µ-4/3 formats.
• Leica is in another world altogether.
• Sigma is already dead for the SLR, but they don’t know it yet.

All in all, I believe that the SLR market is condensing on a relatively small number of brands, while the hybrid market seems here to stay with even less players.

Since most companies want to move the awful year of 2011 back in the nightmare scene, expect some serious technology push, probably for the easy targets: more pixels, more sensitivity, more gadgets. The chances of seeing a real technology revolution seem small.

As a matter of fact, we are witnesses to an almost unbelievable financial chronicle on a background of fraud, creative accounting (of the kind that leads company Officers to jails) and possible links to organized crime. Would you believe it? Of course, we must be aware that there may be some unfounded data here, but a few facts are now official.

The story starts back in 1998 when the Japanese finance world was rocked by rumors of huge losses at Olympus. Then, everything went back to normal after some strong comments from Olympus management… Up to when the ex-Executive Officer of Olympus UK, Michael Woodford, started talking and singing to the whistle-blowing tune. At first quite skeptical, we heard that the mother company was several years in trying to hide huge losses from the end of the ’90s through financial practices less than legally sound.

Olympus would have lost enormous amounts of money in the ’80s and ’90s in unsafe short-term investments. This did not look too unusual, even for an industrial company. But it starts getting weird when we hear that the company would have been trying to hide these losses (probably around 700 million US dollars, according to official declarations; But it is said that there are about 5 billion US dollars missing in the balance sheet) by investing in young and fast-growing companies. As a matter of fact, it would have been -only- a way to write off quick huge losses rather than any other thing. So, it amounts to a colossal accounting fraud, maybe hidden behind the cooperation of some financial institutions.

The fact that this is an accounting technique so well-known that it has a Japanese name (“zaitech“) does not seem enough to exonerate lies on a long period of time. Olympus is risking a de-listing from Stock Exchange markets. Its managers could be confronted to the judge. In Japan, in the US or in the UK. It has also been said that this scandal also includes connections to organized crime (far worse than a league of shabby finance directors) which would have been recruited (and paid) to help build the fraud.

The stock fell through the ground (see above). The situation is serious enough that the company may be crushed and could simply disappear (after a quick de-listing).

The consequence could be dramatic for the photo camera brand. Even if photo activities could be sold by the manufacturer of endoscopic and medical equipment, the current situation of the camera division is not very favorable and there is a significant risk that nobody would buy it if this drags on for too long.

For several months, I have been predicting the possible disappearance of one or more photo brands from the D-SLR market. I often said that I saw Sigma as the most likely candidate because of its hesitant and inconsistent strategy here. But Olympus could overtake them in this dramatic race to the crash-test wall. Let’s meet again before the end of 2011 for more. It would leave only memories of marvelous cameras which reached semi-mythical status.

Nevertheless, in front of this fast-moving news landscape, we should not under-estimate the action of individual egos of the managers and ex-managers: Michael Woodford is leading a campaign to be called back at the head of Olympus as a savior.

Olympus OM-1

Sources:

• New York Times
• Bloomberg
• New York Times

For the follwing new products, Sony just removed all forecast of availability.

• NEX-7
• NEX-5N
• NEX-C3
• Alpha 65

Source: Steve Huff.

High waters are rushing through Thailand. The Bangkok county is now seriously preoccupied by the devastation and the victims involved. Water is invading all parts of the Bangkok surroundings one after the other. Local administration stated on Sunday that there were already 297 dead or disappeared people since last July. But the companies are all very concerned.

In the photography world, there are mainly two companies under the attention and that are going to pay a high price since the Ayutthaya region saw 93 big plants and 8500 employees saw their work place and tools disappear under dark waters. To be more precise, since the rupture of the last levees, water raised over the 1st floor! which is not a good omen for the repair activities. Bangkok, the state capital, seems to be unscathed yet and (relatively) protected. But there is no margin anymore.

The most impacted photography companies are clearly Sony and Nikon. Sony has lost all capacity to manufacture DSLR photo cameras. This is certainly going to be economically dramatic. Some like Amazon have first published banners to redirect customers to other brands and removed all reservation pages for new products since (Sony Alpha 77 or Sony Nex-7). The others photo cameras from that brand (all of them!) are now only sold from existing stocks (still large stocks, but…).

Similarly, Nikon had to evacuate its local plant and it is now under water with dark and far perspectives to restart (no forecast for a restart at the headquarters). This is hitting hard all entry-level and mid-range cameras (including the Nikon D7000 and Nikon D5100) and a large number of standard lenses. After the closure of the Sendai, Japan plant, this is a very hard blow for the yellow brand.

For these two brands of photo cameras, the consequences may be quite dramatic. We already saw Nikon re-organizing its price structure at worldwide level, probably to take into account its manufacturing difficulties. This will not ease the situation and restart will certainly be very difficult depending on the exact duration of the rain fall. But we can forecast some commercial stress while we are now reaching the intense sales period of Christmas and the end of the year. And the availability of some new products (particularly for Sony which had seemed to be out of most of the Japan issues) may have to be pushed far in the future.

It appears that I was right: Pioneer just announced that they will start by creating a joint venture (JV) in Brazil with Asia Optical to manufacture some compact Point’n Shoot photo cameras. They will probably be sold (mostly) in China through Suning, but it is not clear how and when they will extend out of Asia.

This is a first for the Pioneer brand. But they have enough money to try and enter a market which has been shaken up and offers some opportunities to extend far from their original business of audio electronics.

The location in Manaus, Brazil is easily explained by the existence of a duty-free industrial zone that is attracting a number of companies despite being a bit far from a large harbour.

Press Release

Pioneer and Asia Optical Agree to Establish a Production Joint Venture in Brazil
Aiming for ¥15 billion in sales in 2015

Pioneer Corporation announced today that it has reached an agreement with Asia Optical Group, an alliance partner, to establish a joint venture production facility in Manaus, Brazil. Through the establishment of this joint venture, Pioneer will aim to expand its business by strengthening its operational systems in the Brazilian market, which is expected to continue to grow strongly. Pioneer will also aim for better quality, lower costs, and shorter lead times resulting from the shift to local procurement of mechanical components. The joint venture will target annual sales of 15 billion yen in 2015. See below for detailed information about the business description, launch schedule, and so on.

Business description

The joint venture will engage in the following business activities in Brazil, directed
towards growth markets.
- Production and sale of mechanical components
- Undertaking contracts for EMS manufacturing
- Production of digital cameras

Launch schedule, etc.

The plan is to establish a joint venture in Manaus, Brazil by about September 2011, and to start producing digital cameras from the end of the year. The joint venture will further expand its business by constructing a new plant in the first half of 2012.

Through this joint venture, Pioneer and Asia Optical will work to lower material costs globally by taking advantage of the synergy arising from their mutual expertise in procuring components.

Outline of the joint venture

(i) Company name: Pioneer Yorkey do Brasil Ltda.
(ii) Date for the joint venture: Scheduled for September 2011
(iii) Location: Manaus, Brazil (in the site of Pioneer do Brasil)
(iv) Stated capital: 50 million Real (Pioneer do Brasil 51%, Asia Optical Group 49%)
(v) President: Tatsuji Shimizu (Plant manager of Pioneer do Brasil, Manaus)

Cokin system

This is interesting to see how a previous article I wrote about the possible re-structuration of the photo market through some significant acquisitions has a nearly immediate echo.

Actually, Kenko-Tokina, one of the companies I was mentioning as possibly interested in moving forward, has officialized its acquisition of COKIN SAS, the French leader of filter making which had been an major source of innovations in the 1990s.

Random luck?

By the way, I also wrote a recent paper on filters in digital photography.

Press Release

PARIS — July 5, 2011 Kenko-Tokina Company Ltd., Japan today announced that it has acquired the famous French filter manufacturer COKIN SAS.

COKIN is the creator and leader in Square filters systems, exporting 90% of its production to more than 100 countries around the world.

Mr Toru Yamanaka (President of Kenko-Tokina Co., Ltd.) said: “I have always been impressed with the creativity that COKIN filters and accessories offer. I admire and greatly respect the professionalism of this line of fine products which reflect the French ingenuity. We are very proud to add this filter manufacturer to our Team.”

Kenko-Tokina Co., Ltd. was established in 1957 and now has 10 factories and subsidiaries worldwide. They are a world-leader in round photographic filters and other fine optical products.

COKIN France S.A.S.U. (new company name) will stay independent, with its own manufacturing, marketing and worldwide distribution network.

Mr Marc Heintz (Director of Sales, COKIN France): “Kenko brings to us a strong backing of finance and supply of raw materials, which will allow us to expand and bring new innovative products to the market once again.”

With this acquisition, both companies will expand their services and bring the flourishing photographic accessory market their expertise and enthusiasm for today’s exciting imaging world.

Since the relationship between Pentax and Samsung was no longer very tight (Samsung is now convinced that they ca evolve along without the help of the Pentax DSLR technology and they demonstrated they were right), we knew that there was the need for choosing between going under silently and investing again in Pentax to help it join again the fight with the current heavy-weights like Canon, Nikon and Sony. Hoya chose to throw in the towel (seeing the figures published by Hoya, I have no difficulty understanding why), and Pentax chose to find a new godfather with sufficiently deep pockets to attempt a new effort (before they are really distanced by the bicycle pack as we are seeing things in these Tour de France times).

This is opening the possibility to ask some more questions about the future. First and foremost, the future of Pentax. Ricoh was not very clear on their intents up to now out of the statement that the Pentax brand will remain for current products and that it will still build quality products (Who would write something else?) We are made to understand that Pentax will receive new resources to develop its next generations of DSLR cameras.

Nevertheless, it is striking to see that once again a secondary actor or an partner external to the high-end photography world is reaching out for the DSLR market. There had been -among others- Sony buying Konica-Minolta (after Konica had purchased Minolta of course), or Samsung investing in Pentax, or Hoya purchasing Pentax.

As always, the successes are not always at the end of the road for such big financial operations (but buying Pentax for a few millions is not a merger of equals between Daimler and Chrysler). But we also see that this can lead to interesting results: Sony demonstrated being able to use the DSLR technologies at all price levels and to deploy a line of DSLR cameras incorporating 90% of pro camera features in a price envelope really at amateur level.

So, the question asked really concerns the next possible purchases in this market. I think that several companies are currently exposed to this kind of fast evolution:

• Olympus is no longer sure to be willing to manufacture DSLR cameras but does not seem to be growing steadily
• Sigma has nearly left the race despite the recent maneuvers around the Sigma SD1

And we can also think about the companies owning brands that are easily recognizable (so, with a large value) but which have been playing in second league since several years:

• Fuji
• Why not Leica which has mass craftsmanship status (but it may be 100% OK for them)

I believe that some actors may be tempted to act before the positions are too firmly fixed in the market and the shakeup following the Japan crisis of Spring 2011 may play the trigger role. Who could act up?

Let’s think about the internal actors which already have huge interests in photography. Samsung does not seem to be ready to disperse itself and will keep working by itself with its own teams. Panasonic (or even Olympus) could be willing to re-enforce their presence by aggregating external strengths (Kodak no longer has the ability to maneuver at these investment levels). But a lens manufacturer like Tamron (Samyang is still much too small) could seize the opportunity.

Moreover, we can look at some external actors decided to have their funds growing through investment in a domain parallel to their original skills. The most astonishing name (but not completely impossible) is Apple under the very stringent condition to be able to reconcile very distant corporate cultures. Philips or Pioneer or Hyundai are also more credible candidates if they want to reach out for photography.

If this is not enough, we need to reach less credible opportunities like movements from Adobe (down side: risking to alienate all camera manufacturers to acquire only one) or from Dell / HP / Acer (down side: DSLR are quite far from their usual customers, but compact cameras could prove more attractive as it was the case in the past).

Obviously, only time will tell. But it’s clear that the number of targets is relatively large today and they are potentially attractive for a take-over. Moreover, the time is logically right while the sedimentation beginning to happen in the middle- and high-range of photography since a few years (the losers did not loose their brand value yet) and the arrival of new technologies susceptible to shake the market up (continuous improvement of sensitivity of digital sensors, semi-transparent mirrors, photo-video convergence). But the launch window could also close itself within 12 to 18 months.

Update: A list of companies susceptible to participate to a large financial operation

Japanese industrial companies with more than 1 billion US dollars in cash available for new investments (Source: Bloomberg) :

• Denso Corp.
• Fujifilm Holdings Corp.
• Kuraray Co.
• Kyocera Corp.
• Mitsubishi Tanabe Pharma Corp.
• Ono Pharmaceutical Co.
• Rohm Co.
• Sega Sammy Holdings Inc.
• SMC Corp.
• Sony Corp.
• Suzuki Motor Corp.
• Taisho Pharmaceutical Co.
• Yamato Holdings Co.

1 billion USD, this is 10,000 (Oop!s) times what Pentax costed…