Smart phones have dramatically cut sales of all cameras, especially the compact segment.
The manufacturers are hurting: If last year was like the preceding, Olympus will not have made a profit in consumer cameras for 6-7 years, I haven't revisited the financials, but cameras were less than 14% of revenue, dwarfed by the medical and scientific imaging side, where Olympus is a is a leading purveyor of colonoscopes etc. While the consumer side is important to them for heritage and brand recognition reasons, I can't blame them for streamlining the lineup.
Olympus hasn't just reduced the number of underwater housings, its reduced the number of compact cameras lines. The XZ line aimed for a vanishingly small number of enthusiasts who could appreciate the pairing of the 1/1.7" sensor with a f/2 lens, but who for some reason didn't want to step up to an entry level PEN with a kit zoom and a portrait lens for a few hundred more. There weren't many of us buying XZs because it was the best set of features among Olympus compacts for UW, and one of the nicest larger-sensor compacts. I suspect the XZ-10 from three years ago was the last we'll see of that line.
That leaves just the "Soccer Mom" Stylus line, which has little natural affinity with the ocean, and the "Adventure Guy" TG line, as the serious compacts in the lineup. You can't put a 24x zoom on a m4/3 sensor (and expect Soccer Mom to heft it), nor can a interchangable lens camera be made surf and swimming pool waterproof, so those lines seem safe from the m4/3 system cannibalizing their sales. Two housings, for the TG-850 and TG-3, were released in early 2014, and they carried over to 2015, supporting last year's editions. I do wonder about the TG-8XX "Stylus Tough" cameras, which occupy an odd space with the Stylus's 1/2.3" small sensor, and lousy low-light performance, but only a 5x zoom (vs the 1/1.7" sensor and 4x zoom on the TG-Xs). I expect that line to be next to go.
I wouldn't be surprised if the m4/3 line was someday similarly streamlined. I still don't understand why Olympus doesn't just concentrate an entry-level mini PEN, a top-end PEN w/ GX-style viewfinder, an EM-5, and an EM-1 to handle pros and the legacy 4/3s lenses, instead of the
eight m4/3 and 4/3 lines they're attempting to simultaneously develop.
Eight, because there's the new Air line. Like Sony's QX, the Air says to the smartphone threat, "if I can't beat them I'll join them", and despenses with niceties like screens and buttons in favor of running everyting from a phone or tablet. I don't expect an OEM housing for the Air, but on the other hand, if they partnered with someone like
iDive, they could put together an initially absurd looking but maybe attractive package that gave everyone who struggles seeing their camera screen underwater a 10" diagonal alternative. Stick a dome port on the back of an iDive, and an entirely new form factor is born.