Date: 22/12/2010

Another 3 good years for the digital cameras

iSuppli reports the point-and-shoot digital still camera (DSC) has about three good years left before its shipments begin to decline, supplanted by newer technologies and the omnipresent camera in cell phones.

The other research facts and trends disclosed by iSuppli include:
1. Factory unit shipments of compact DSCs are projected to rise by 10.4 percent and reach 121.4 million units in 2010 and enjoy modest growth for the next three years. However, production will start to flatten in 2014 as the market matures. By then, shipments are expected to decline by 0.6 percent to 135.4 million units, with DSC models at the low end of the spectrum expected to encounter stiff opposition from the cameras in cell phones, which increasingly will become the primary image-capture device for consumers.

2. The anticipated growth of the DSC market in 2010 continues the up-and-down fortunes of the sector during the last few years. After expanding by 16.3 percent in 2006, 19.5 percent in 2007 and 10.6 percent in 2008, the DSC space began to decelerate in the second half of 2008 as the global economy faltered. The year 2009 proved to be an even tougher period, when shipments fell 13.8 percent to 110.0 million units.

3. This year, digital cameras are profiting from a resurgence because of declining prices, an improved economy and increased consumer demand. Nonetheless, the DSC market will continue to experience near-term weakness, iSuppli believes, and overall trends are unfavorable for a number of reasons.

4. In particular, multimedia handsets now equipped with higher-megapixel cameras may be cannibalizing low-end DSCs that have equivalent resolutions. Already, the phenomenon is occurring in Asia and Europe, as consumers in these regions have grown comfortable with taking pictures through their camera phones.

5. Furthermore, consumers increasingly share and store photos through social networks such as Facebook and Flickr, which are unable to effectively process higher-megapixel pictures due to bandwidth issues-further leading consumers to abandon DSCs in favor of more flexible devices, such as camera phones.

6. The unstable economy has led to longer camera replacement cycles among consumers. No longer is a higher megapixel count an automatic selling point for DSCs given that megapixel density has reached a point of diminishing returns, especially in mature markets.

7. Despite the gloomy prognosis for the overall DSC market, pockets of growth can be found within segments of the industry, such as in hybrid high-definition (HD) cameras, future 3-D cameras and the higher-end range of consumer cameras known as digital still lens reflex, or DSLR.

8. An important technology trend that is fundamentally changing the DSC market is the hybrid HD camera, which integrates high-definition video recording and still-camera capability into a single device. Though still in the somewhat early stages at this time, hybrid cameras will become more popular and affordable in the marketplace, especially as advancements are made in silicon processing capability and as prices for flash storage decline.

9. Shipments of hybrid cameras will grow from 8.3 million units in 2009-representing about 7.6 percent of total camera units shipped-to a staggering 120 million units in 2014-accounting for about 89 percent of total cameras shipped. Already, hybrid camera models are available from Eastman Kodak, Canon, Nikon, Samsung and Sony, etc. and hybrid cameras at the $150-$200 price point represent the next big growth opportunity in the industry, iSuppli believes.

10. 3-D cameras represent another area of growth for the camera sector. With 3-D games and video already being offered, iSuppli believes 3-D cameras will likely hit store shelves by the 2011-2012 time frame. Nonetheless, such cameras are not expected to become a mainstream technology until after the 3-D screens that are used to show 3-D pictures and video reach approximately 30 percent penetration.

11. Other areas of growth for digital cameras include the integration of features such as GPS and Wi-Fi, increasing their attractiveness and potential for everyday use.

12. GPS systems inside cameras will allow users to capture the exact location where each image was taken-a process known as geo-tagging that takes travel and location photography to a new level; while Wi-Fi chipsets inside digital cameras will allow consumers to send photos wirelessly to an Internet network, PC or printer-achieving better photo quality than that provided by mobile phone cameras.