The ubiquity of the photo-sharing app Instagram – whose potential convinced Mark Zuckerberg and company to purchase the start-up for 1 billion US dollars – is reflected in the fact that it’s monthly users had surpassed 100 million in February. This is the main competition of the point-and-shoot camera, high-tech smartphones with on board cameras that keep getting better and better, and numerous photo-editing apps at their users’ fingertips. This just makes it harder for point-and-shoot camera manufacturers like Japan’s Olympus Corp., who has now decided to shift focus away from that market.
On the onset, Olympus has announced that it will eliminate its V series of compact cameras – the cheapest in its lineup, that sell for less than 200 US dollars. The Japanese camera makers posted a loss in the last fiscal year through March, because the demand for compact cameras has weakened, majorly due to smartphone cameras which fulfill the very same purposes as a point-and-shoot. Entry level compact cameras don’t offer much better picture quality than smartphones, and it’s less convenient to share photos online from them as well. To add to this, smartphone users already have countless photo-editing apps at their disposal, making snapping pictures from the phone’s camera a better proposition, and being able to instantaneously post it to sites like Facebook. Olympus announced that it will sell much fewer cameras and concentrate on high-end models with interchangeable lenses. Analysts have looked at this as a smart step for the company, whose most competitive business isn’t in cameras, but in medical equipment.
Olympus sold 5.1 million digital cameras last year, but they plan to lower their targets this year to only 2.7 million. Even other camera makers have struggled with this situation. Canon Inc. reported a sharp decline in profits for the first quarter, even though the yen’s weakness was working in its favor. Canon CFO Toshizo Tanaka said that demand for compact cameras was indeed shrinking. “We found it difficult to avoid that impact,” he said. “Low-end compact cameras that don’t have obvious features that stand out will be eventually wiped out of the market,” said Canon Managing Director Hideki Ozawa in November.
[via Wall Street Journal]