Panasonic's Silence: The Micro Four Thirds Conundrum

At the beginning of the summer, Olympus announced the sale of their imaging division, leaving the future of their highly regarded OM-D range and Micro Four Thirds (MFT) more widely in disarray. The other half of the MFT founding partnership — Panasonic — has been strangely quiet on the subject. Their next move is crucial, so what might it be?

Olympus

Olympus' announcement of the sale of its camera division to Japan Industrial Partners came as no surprise to many in the industry, even after vigorous denials from the company itself. This followed year-on-year losses culminating in a $157M loss in 2019 for its imaging division, as well as pulling its business out of South Korea earlier this year. It's clear that even large manufacturers can no longer support their camera divisions making losses, with COVID-19 just highlighting how important the bottom line is. If nothing else, it will refocus efforts across the sector.

Olympus' current market strategy can be pegged all the way back to 2003 in the form of their innovative E-1, the first of the Four Thirds ILCs, which sold alongside their burgeoning compact cameras. It was a successful lineup that — perhaps counterintuitively — continues to this day. Of course, the Four Thirds system evolved into Micro Four Thirds and ultimately, their acclaimed OM-D series. Of course, Olympus' Imaging Division hasn't pulled out of the camera market; it's been sold off. What this means for future Olympus cameras remains to be seen; however, even in a best-case scenario, Olympus will no longer have the same resources to draw upon and likely will not have the same presence in the marketplace.

The Micro Four Thirds Strategy

It's pertinent at this point to remember that camera systems are not standalone products in their design or manufacturing. Businesses operate, to a greater or lesser extent, in a highly integrated market where one manufacturer becomes a supplier to another. Nikon uses Sony sensors, Leica designs for smartphones, Cosina manufacturers lenses and cameras for a range of brands, and Olympus and Panasonic share a common lens mount. In fact, Olympus and Panasonic jointly released the MFT standard in 2008, with the Lumix G1 first to market in November 2008, followed by Olympus' E-P1 in June 2009. MFT cameras and lenses have since been manufactured by a number of different businesses where the wide lens support and small size are valued.

Olympus and Panasonic took divergent paths in their camera development, with Olympus focusing upon stills cameras, eventually finding the right niche with the OM-D line, whereas Panasonic saw value in pushing the video credentials of the platform. The release of MFT started the "bonfire of lens mounts" from 2010 as other manufacturers jumped on the mirrorless bandwagon, each taking different approaches. In hindsight, we can see the joint APS-C/FF strategy as the most successful, but that doesn't mean it is the only one that works. Large sensors end up sporting large lenses, which negates much of the gains made from having small, svelte, mirrorless bodies. Putting a small sensor in a MILC aims to redress that balance, and it's something that Panasonic/Olympus, Nikon (1 System), and Pentax (Q) all tried. Of course, the demise of the latter two is a salutary tale; however, MFT appears to have struck the right balance between system size and image quality. This is something that Fstoppers' Nando Harmsen has touched upon: why aren't Olympus cameras more popular?

Panasonic plowed a video furrow, having seen the success of the Nikon D90 and particularly, Canon's 5D Mark II. Being able to capture video is only half the story; having a camera body that is a video-focused is also important. However, MFT leveraged the abilities of the small sensor to offer benefits missing in FF. The first is obvious: camera size. The sensor is smaller, and since a MILC has no mirror box or pentaprism, the overall camera is much smaller. This significantly improves manageability. Secondly, the depth of field. While stills photographers will often differentiate their creative work with shallow depth of field (as indeed videographers will), the video will often want front-to-back focus, and a small sensor can facilitate this. This then leads, thirdly, to crop factor (or zoom ratio). Smaller sensors have narrower fields of view for the same focal length, invaluable in a range of shooting scenarios. Finally, smaller sensors can also be designed to read out data more rapidly and so enable faster shooting speeds. High frame rates or super slow motion leverage this.

Panasonic's Future Strategy

In the wake of the sale of Olympus' Imaging Division, Panasonic has been strangely quiet on the topic. What are their intentions for MFT as a platform, and will they develop it going forward? To understand what might happen, we need to understand Panasonic's approach to date. In particular, it is worth remembering that they have a long history with Four Thirds, releasing their first DSLR (DMC-L1) in 2006, which shared components with Olympus' models. Barely two years later, the MFT standard was released, and Panasonic was first to market. It's possible that video wasn't uppermost in Panasonic's mind upon release of the G1, as it suffered from slow autofocus and poor battery life. However, barely six months, later the flagship GH-1 was launched, touting strong video capabilities. Panasonic's intent was clear, and it has developed this with each iteration. It's worth speculating who was driving the partnership between Panasonic and Olympus. MFT offered significant advantages for video, and Panasonic has had a clear and consistent development path.

As I note above, small sensors are only a part of the story, something demonstrated by moviemakers shooting shallow depth of field, immersive scenes. In short, FF adds as much to the mix as MFT, and Panasonic wasn't able to compete in this sector. Their release of a FF camera should therefore come as no surprise; however, it was the announcement of the L-Mount Alliance that came from left field against the backdrop of the inevitable: Nikon and Canon going mirrorless. The L-Mount (or T-mount) was introduced by Leica in 2014 and in terms of specifications is highly competitive. That it brought together Panasonic and Sigma is more unusual, perhaps because they don't naturally compete with one another. Like its earlier MFT collaboration with Olympus, this gave Panasonic a lower cost of entry into FF with the potential for other vendors to manufacture supporting lenses.

Following a similar strategy to MFT, it released a stills camera first in the form of the S1 and S1R, following these up with the video-centric S1H. Perhaps the most interesting release to date is the S5, a FF MILC that's the same size as their MFT GH5. Looking back at the benefits MFT brings to the party, size is no longer an issue. In fact, the depth of field and crop factor also cease to be issues when you are looking for complementary systems. That only leaves shooting speed.

In a recently published interview, Dave Etchells asked Panasonic's Director of Imaging about the future of MFT. His responses are interesting for what they don't say. MFT is described as a "precious asset," and they are taking a view of how the GH line should develop for the reasons outlined above, which means balancing the offerings of FF and MFT. Mr. Yosuke Yamane specifically notes that Panasonic is now:

...considering the future development of the [MFT] category.

With the support of Olympus for MFT now in doubt and Panasonic seeking to capitalize on an MFT/FF strategy, could the future actually be dropping support for the MFT mount? Could MFT sensors appear in Panasonic's L-mount cameras? Could Panasonic take a similar approach to Nikon, allowing their FF models to shoot in MFT crop mode? While it's unlikely you could cross-mount MFT lenses on L-mount bodies (their flange distances are 19.25 and 19 mm respectively), Panasonic could easily adapt their existing MFT lineup.

With Panasonic remaining tight-lipped, what does the future hold for MFT? Is future development dead?

Body image courtesy of Rama via Wikimedia. Used under Creative Commons.