Olympus Is Leaving The Camera Market
Japan's Olympus will sell its photography equipment business, which was founded 84 years ago, and focus on manufacturing medical equipment.
Olympus said it would have to sell the division to private equity Fund Japan Industrial Partners Inc. The transaction amount is not disclosed, and the parties expect to close it by the end of this year.
Olympus released its first camera in 1936 and for many years was one of the world's largest manufacturers of photographic equipment. The peak of its success came in the 70s when famous photographers advertised Olympus cameras on television.
In the 90s, the company switched to the production of digital cameras and in the early 2000s occupied second place in this market, second only to Sony Corp, writes the Wall Street Journal.
Back in 2007, this business brought Olympus $3 billion in revenue. But in the future, the situation began to change quickly: the demand for cameras decreased sharply with the development of the smartphone market. In the fiscal year ending March 31, the photography division generated just over $400 million in revenue. However, it has remained unprofitable for the past three years.
Cost-cutting measures taken by the company in the face of" a deteriorating operating environment, including a sharp drop in market volume due to the development of smartphones, " failed to return the division to a profitable level, Olympus said in a statement.
The company began restructuring after ValueAct Capital Management, a US hedge Fund that owns a 5% stake in Olympus, appointed two Directors to the company's Board earlier this year.
After the sale of the photographic equipment division, Olympus will fully focus on the production of medical diagnostic imaging equipment, including endoscopes.