Digital camera sales growth to slow

"Slow" here means 13% growth which is pretty healthy.

Cheers,
Alan



Study Predicts Slower Digital Camera Growth

Reuters
Thursday, February 10, 2005; 5:08 PM

NEW YORK -- The photography industry expects U.S. digital camera sales growth to
slow to about 13 percent this year, as the market matures after growing at a
breakneck pace for almost a decade, according to a report released on Thursday.

Unit sales of digital cameras, which use no traditional film and record images
on a memory chip, will rise to 20.5 million this year from an estimated 18.2
million in 2004, industry trade group Photo Marketing Association said in its
annual photography industry report.

The increase pales beside the rapid gains of more than 30 percent in each of the
last three years.

"Digital cameras are expected to continue their growth in 2006 before reaching
their peak at the end of that year or the next," PMA said. "As the digital
camera market matures, industry revenue will increasingly depend on accessories,
consumables and services."

The rapid transition to digital photography has forced companies like No. 1 film
maker Eastman Kodak Co. to shift their business strategy away from film. It also
hurt the retail photo developers where most consumers took film to be turned
into prints, although use of retail printing is rising.

The overall camera market, including film-based models, is expected to be flat
in 2005, after growing by 3 percent in 2004.

Total film sales are expected to fall 18 percent in 2005 to 532 million rolls,
after sliding 19 percent last year. Sales of single-use cameras -- which are
also called "disposable" and are counted as rolls of film -- are expected to
slip to 217 million in 2005 from 218 million.

PMA also said that more consumers are printing digital photos at local shops
like pharmacy chain Walgreen Co. and Wal-Mart Stores Inc. , but the majority
still develop their snapshots at home,

Some 40 percent of the 7.7 billion digital images printed in the United States
this year will be made at retail stores, up from 31 percent in 2004. By
contrast, 18.2 million traditional film prints will be made in 2005, down 18
percent from last year.

Printing of digital pictures at home will shrink to 52 percent in 2005 from 61
percent in 2004. Online photo developers are seen staying at about 8 percent,
the study said.

Digital snapshots can be e-mailed, viewed on a computer or television, stored on
a computer or deleted. Most are never printed.

The group came up with its projections after surveying retailers and about
10,000 households.

All markets saturate eventually

On Fri, 11 Feb 2005 16:35:29 +0000, bmoag wrote:

All markets saturate eventually

Moreover, for film cameras, specially 35mm, photographers often carry two
camera bodies loaded with slow & fast films. With digital, there is no need for
that.

--

Gautam Majumdar

Please send e-mails to

I have been seeing this headline all over, it's great. They are not
saying that the sales of digital cameras are slowing down, what they
are saying is that the rather incredible sales volume will in fact
increase but that the rate of increase will not be as high. But when
we are talking about 20 M unit /year so just keeping that level of
sale it pretty impressive.

I can see the sale going up more however, depending on developments in
the cameras. We are getting very close to the point where a $50 digital
camera will make great looking 4 x 6 prints, I figure it takes about a
2 MP camera to do that and even 1.2 MP is not too bad. These are at the
$100 mark which puts them out of the impulse buying range for many
people but at $50 I think a whole lot of people who have not yet bought
a digital camera would say what the hell I'll give it a try.

But I think there will be a real flattening of the market in not too
many years. It is sort of like computer in that you can try to get
people to up-grade there cameras, but for computes the push to get new
ones has large been to be able to run the new software. What will
happen when everyone who wants a digital camera owns one?

Scott

Scott W wrote:

...
I can see the sale going up more however, depending on
developments in the cameras. We are getting very close to the
point where a $50 digital camera will make great looking 4 x 6
prints, I figure it takes about a 2 MP camera to do that and
even 1.2 MP is not too bad. These are at the $100 mark which
puts them out of the impulse buying range for many people but
at $50 I think a whole lot of people who have not yet bought a
digital camera would say what the hell I'll give it a try.

I agree with that.

Two things may happen at the low end of the market:

1. Electronic integration will lower the parts count.

Various chip companies are hard at work building integrated
circuit solutions to the entire digital part of the digital
camera. As component feature size shrinks, integration goes
up, and more and more complete solutions appear, we may see
a single chip incorporating a sensor, digital image
processor, control processor, memory, and software all in
one device that can be manufactured and sold in millions of
parts per year.

2. Pixel counts will go up.

You can't buy a 386, 486, Pentium I or II computer these
days. Nobody makes them. The cheapest and slowest
computers made today are tremendously faster than the chips
made 10 and 20 years ago. I'm thinking that the same thing
may happen with pixel counts on sensors.

But I think there will be a real flattening of the market in
not too many years. It is sort of like computer in that you
can try to get people to up-grade there cameras, but for
computes the push to get new ones has large been to be able to
run the new software. What will happen when everyone who wants
a digital camera owns one?

A very interesting question. What will the next big thing be?
Are they working on an integrated cell phone, digital camera,
GPS, PDA, video and sound recorder, radio and TV?

Capitalism has many flaws, but one of them isn't that there's no
innovation.

Alan