Magazine Article


The Digicam Goes BOOM!


The Digicam Goes BOOM!

By Michael McEnaney

July 2001

Have you hung your head out of your office window lately and heard the unmistakable sound of stampeding feet? I'll wait a minute if you haven't had the chance yet...see, wasn't that fascinating?
Just by chance you didn't hear anything, let me tell you, that's not a good thing. That ground-shaking sound was all the digital camera manufacturers scrambling to prepare for the second big explosion in the digital camera market.
You might have missed the first cap go off, (if you're reading this and didn't hear that either, again, not a good thing) say about 1996, when these things first hit consumerdom. Remember when everyone complained that they weren't making any money with digital imaging - some horrible margins if you recall, especially when it came to digital cameras.
Well, as the pixels have gotten a bit sharper the stakes have gotten a bit higher the digital camera may have taken center stage as the world's fastest-growing sector in mainstream consumer electronics.

Perhaps a little proof to back up the aforementioned statement - the folks at InfoTrends are always a good place to start when it comes to doing that kind of stuff.
The Massachusetts-based research firm recently completed a study that revealed 25 percent of all Internet-enabled households now own a digital camera. This number has more than doubled from the 12 percent figure they reported at this time last year. The group is expecting that number to double again by this time next year. That's not simply solid growth...that's almost virus-like.
While many of the digicams (in the study) are lower-level models, industry insiders feel strongly that the $200-$500 range models will see a surge in sales by year's end due to the interest the lower level models have generated.
Adding fuel to the digital fire comes this news out of Japan - the Japan Camera Industry Association (JCIA) estimates film camera shipments by Japanese manufacturers dropped 6.4 percent last year to about 31.7 million units, and another 7.3 percent drop was forecast for this year. Okay, we're not going to start running 72pt bold headlines screaming "Film is Dead" but it certainly has a few bumps and bruises...maybe a bad sprain even.

Based on talks we've had with several digital camera manufacturers lately you can count on numerous Q4 releases of digital cameras in the 2 - 3 Megapixel range coming in at between $200-$300. If this is true, it will mark another corner-turning moment in the mainstreaming of consumer-level digital imaging. If this industry starts putting 2+ Megapixel digicams in the hands of consumers for close to $200 and couples this with the continued increase in digital print options at retail...again, hang your heads out the nearest window and simply listen for the thunder.
Another factor in the continued growth will be the inevitable shake-out that we may be about to witness. That Q4 we just spoke about should really turn up the heat on the pretenders in this market. We may ultimately be looking at a big six, or maybe even a big five in the digital camera game as profit margins begin to come under some serious pressure.
For a few of these guys (Kodak, Fuji, Sony) the digital camera is part of a grand design for owning share in the potentially lucrative digital printing market. Of some 4 billion digital images snapped last year only about 3-4% were actually printed. Imagine the growth (and dollar) possibilities here?
Yup, following the digital camera market is going to be a treat in the coming months. Just make sure when you hang your head out of that aforementioned window it doesn't get ripped right off.
Fasten your USB cables gentlemen, it's going to be a bumpy ride.

Michael McEnaney
Moderately Psychedelic Editor