Saturday, May 19, 2007

Some analysts predict decline in digital camera sales

Highlight:
The price and complexity of digital cameras, combined with competition from cell phone cameras, have some analysts predicting sales for digital cameras will drop significantly by 2007. Christopher Chute, an analyst at IDC in Framingham, Mass. says digital camera companies aimed their product at affluent households, and never looked for the next segment of users. Chute estimates only 55 percent of American households will ever own a digital camera. Also, it was expected that digital cameras would kill film, but this is not the case, analysts say, largely due to digital's inability to live up to its promise of simplicity and economy. Some analysts disagree, however, saying a digital camera's ability to replace video cameras is fueling sales, and will continue to do so. These proponents also add that, while both digital cameras and camera phones race to increase the megapixel quality of their wares, the two products are more complementary than competitive, since camera phones often turn users on to digital cameras.

Original source:
http://www.startribune.com/stories/535/5426001.html

Summary:
* The prospect of digital cameras completely replacing their film counterparts, once taken for granted, may be fading fast.
* The price and complexity of digital cameras, and competition from cell-phone cameras, have some predicting that unit sales of digital cameras will begin to decline as soon as 2007 and that future digital camera purchases will be largely to replace existing models.
* The flaw in the digital-replaces-film scenario was the marketing campaigns waged by the digital camera manufacturers, Chute said.
* Still, when the dollar value of digital camera sales surpassed the sales of film cameras three years ago, the question was inevitably asked: Is film dead?
* Apparently not, and analysts point to several reasons why digital cameras haven't lived up to their initial promise.
* For starters, they are too difficult for many people to use, particularly when it comes to printing pictures.
* Digital cameras cost too much -- $140 to $947 last year, according to research firm IDC, with the average selling price $354.
* And stand-alone digital cameras face competition from improved cell-phone cameras that soon will offer 5-megapixel picture quality, up from today's 2 or 3 megapixels.
* "People walk into a Best Buy store every day with a camera memory card and say, 'What do I do with this?'
* Besides these two new approaches, manufacturers are continuing to ratchet up the megapixels in their stand-alone digital cameras in order to compete with the growing picture-taking quality of camera phones, even though analysts say that adding more megapixels won't help the average photographer.
* Camera phones are good for spur-of-the-moment shots but are limited in their ability to share photos because users typically must pay to use the cell-phone network in order to transmit photos to other wireless phones or to conventional e-mail addresses, Chute said.

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