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But I believe the dominant memory we will have of 2003 will be as the year the Digital Age in consumer imaging finally arrived. After years of anticipation and debate, the entire industry seems to have come to the conclusion that we no longer talk about if or when, but now.

That is not to say that we have given up on our silver roots. All of the serious players in the industry are still making major investments in research and development to improve our films, papers, chemicals and the processing equipment that support them. But Agfa and the rest of the imaging industry, mindful of where the future truly lies, now concentrate on digital. Digital now, and support for older, analog equipment to keep them as a bridge to the future for as long as possible.

Our recent announcements-the new Agfa d-lab.1 and d-lab.2plus, and the Agfa image box, a kiosk product-and the product line introductions of our competitors reflect that reality.

It is, unfortunately, a reality that combines a brave new world excitement with potential downside risk for many involved. While we have phenomenal growth of kiosk services for consumers and expanding imaging use of the Internet, mixed blessings both, we also realize the serious threat digital poses to the lucrative film and finishing market.
Now that the imaging industry is actually living in the Digital Age, our primary job in 2004 will be to figure out how to manage and prosper in it.

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CANON
The Big Picture
by Eliott Peck, Director & General Manager of Sales, Canon Consumer Imaging Group

For our industry, 2003 will be remembered as the year that digital cameras surpassed analog cameras in actual unit sales. What's more, year-over-year, 2003 will account for approximately 30% more digital cameras sold than 2002. That huge increase is proof that the digital market is still in its infancy, still developing, still emerging.

And still…(to paraphrase Mark Twain), the rumor of the film camera's demise is greatly exaggerated. Though film cameras are a mature market (and not subject to the huge growth spurts of its youthful digital companion), 35mm cameras-both SLRs and point-and-shoots-remain a vital and healthy part of Canon's business.

The photo industry today and for the foreseeable future represents a triumph of choice for consumers and a truly golden opportunity for retailers.

There is no question that digital is re-energizing the photo marketplace. What's more, our introduction last month of the new EOS Digital Rebel SLR at a sub $1,000 street price is bringing back that old SLR excitement for consumers and is letting retailers focus on the equally exciting prospect of selling lenses and other accessories.

Clearly, digital also represents a shift in the processing paradigm that has fed much of the photo industry for decades. Today, retailers' digital printing operations remain a far cry from the 24- or 36-print volume enjoyed with traditional [film] D & P. Nonetheless, digital opens new opportunities for dealers to present home printing as an easy, fun and economical addition to their digital experience (offsetting some or all of the diminished film-processing revenues with increased sales of photo ink, photo paper and even printers).

Additionally, the introduction of the industry's new PictBridge technology protocol (allowing the crossing of brand lines to direct print without a computer) makes the move to home printing easier and more flexible than ever. Significantly, at Canon even our new Mini DV Camcorders are PictBridge compatible. With their enhanced photo mode, these new digital video cams offer high quality still results-hence the PictBridge printer connection-while offering the consumer the economy of purchasing (and carrying) one digital camera that does the job of two.

Finally, as an industry, we need to better communicate the differences in digital designs; to clarify the over-simplified "megapixels for the money" shorthand that has dominated "informed" purchasing decisions. To remind consumers that quality pictures begin with quality optics for capture and innovative, intuitive and responsive technology for fast, accurate and aesthetically pleasing results. To assure our customers that digital technology is here to stay and offers new and exciting possibilities…opportunities to satisfy our human desire to document, to chronicle and to share life's milestones, moments and memories.