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Re: [OM] Do financial statements mislead?

Subject: Re: [OM] Do financial statements mislead?
From: Ken Norton <ken@xxxxxxxxxxx>
Date: Fri, 12 Apr 2013 16:53:29 -0500
> It may be that Olympus is doing no worse than other purveyors of, shall
> we say, "conventional" cameras.  The real cause of lost sales to the
> historical makers of cameras may be smartphones... just as tablets
> appear to be chopping away at the PC market.

OK, but here is the rub. Why have a business unit that ALWAYS loses
money, even with a winning product? Something is fishy here. If the
purpose of the imaging division is to provide services and products to
other divisions, then those costs should be accurately represented
across those business units. I know, I know, that's not how it always
happens, but in all honesty, it's still fraudulent representation of
the books. It may be "legal", but is still not right.

So, Olympus hangs onto the imaging division for what reason? Let's say
that the imaging division profit/loss numbers really are accurate and
representative of the failure of product management and marketing to
deliver profits. The stockholders and board of directors should be
demanding the closure or sale of that division that is a constant and
nagging drain on the company. BE GONE, THOU LOSER!

Losers and idiots. I'd fire EVERYBODY from top to bottom in the
imaging division and shut it down if these P/L numbers are right. If
they aren't, then it's just a continuation of what we already know
about Olympus: It's a financially crooked, corrupt and bogus
corporation that can't be trusted for anything.

Which is it?

I'm struggling to see a third option.

As to the shift from P&S cameras to Smartphones? Well, duh! But is it
any great loss? Those commodity cameras don't make much money (but are
sold in huge volumes). We've been seeing the camera-in-phone
juggernaut coming for so long now that you would have needed to be
raised by wolves to not see it.

A problem that Olympus is battling, probably without realizing it, is
that they compete 100% in the "consumer electronics" category. They
have kissed off the "prosumer" or "pro" markets entirely. They kinda
get there and then abandon it. The only thing left for Olympus is the
"camera as Christmas present" or "camera as jewelry", or "camera as
toy" categories. These are all tucked in under "consumer electronics".
Again, as everybody who isn't munching on a week-old moose kill will
tell you, consumers are fickle. Not only are they fickle, but subject
to "disruptive techologies". It doesn't take much for the masses to
move from one hot item to the next. Just within the photographic
industry, Canon went from near total domination of the market to
getting marginalized by Nikon. Once Canon's IQ advantage disappeared,
people recognized that Nikon made better cameras and lenses.
Meanwhile, Fuji and Sony is pounding everybody with cameras that
photographers actually want.

So, with this shift to Smartphones, what is a camera company to do? I
don't know about you, but I'd be doing everything possible to ride
that horse as fast and hard as I could. I'm not finding ANY
smartphones on the market with "Olympus Inside" or "Canon Inside" or
"Nikon Inside". The only company that really has embraced it is
Samsung and they make the whole thing anyway.

This is film to digital all over again. Olympus is sitting there on
their thumbs like Kodak and Polaroid did with digital. Frankly, if
Olympus is unable to figure it out and adapt, then Darwin's theories
of evolution are proven right again. Be gone! Die! Just go away. Stop
pretending to be a viable company because you aren't. You're nothing.
You're just another footnote in history, to be forgotten and only
lamented by a handful of bearded old geezers sitting on a park bench
throwing seeds at the pigeons.

I work in an industry that is widely accepted as "dying". NOBODY get's
a landline telephone anymore. Right? Well, kinda sorta. But you ever
wonder how those cellphones actually talk to each other? We can chase
the whims of the consumer and we'll lose out for various reasons, but
when we shift focus from old Aunt Mabel and her husband Mildred to
business-to-business, we really don't care who has M&M for a customer
as I'm getting paid no matter what. We're shifting our business as
fast as we can without abandoning anybody. Fortunately, we have
something the cell companies don't. We've got fiber and copper in the
ground to every house and business. Our network is effectively
infinite. There's is highly limited by available radio spectrum. So,
our challenge is to adapt to this changing market where we lose the
voice portion of services and gain broadband. It does help that Google
is a few years away from dragging fiber to every household in the
world. ;)

You see, even we old stodgy companies can figure this out and adapt
and change. Why can't Olympus? I'd be cutting a deal like you've never
seen before (even if giving them away) to have "Olympus Camera, Zuiko
Lens" on every iPhone coming out of Foxconn.

Again, either they are incompetent idiots or committing fraud to the investors.

Rats. There goes my "warm fuzzy analysis and commentary" on Olympus.

--
Ken Norton
ken@xxxxxxxxxxx
http://www.zone-10.com
-- 
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