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The State of the Imaging Industry 2004



President, North America, Agfa Consumer Imaging Last year in this annual commentary on our industry, I observed that the Digital Age in consumer imaging had finally arrived. As supporting points, I cited a series of new Agfa digital photofinishing products for retail venues, including our d-lab.1 and d-lab.2plus products. These kinds of advanced product offerings from Agfa and others provide a technology breakthrough for the growing retail segment of the digital photofinishing industry—mass retailers, independent retailers and professional labs.

If 2003 marked the nascence of the retailer-based digital photofinishing industry, I see 2004 as its coming-of-age. And not a moment too soon: consumer adoption of digital photography has posed a significant threat to all retailers, in the form of lost film and photofinishing sales as well as related store visits. Some analysts have projected that in the next five years, digital cameras will have replaced nearly all conventional cameras in U.S. households. This major technological change is opening up new ways for people to capture, store, interact, print and share their images and thankfully, in the process, creating a slew of new retail products and service opportunities.

The new generation of digital photofinishing solutions enables retailers to address this "digital challenge and opportunity." By giving consumers a good reason to take their digital images to retail stores—for printing, manipulating, and more—the retail industry can retain much of this high-margin category responsible for more than two billion store visits per year. With the new-generation digital technology platforms, retailers are now well-positioned to generate a strong revenue stream, keep overhead low and margins healthy, and grow their market share in the fast-changing photofinishing marketplace.


SONY
Beyond Megapixels, Zoom and Snapshots

by Greg Young
General Manager, Digital Imaging Products Marketing, Sony This year the meaning of the word "camera" emphatically shifted from film to digital, and U.S. consumers found new and better ways to capture and share visual records of their lives. And the turbulent times in which we live only make these records more precious.

In 2004, we witnessed and enjoyed the benefits of the digital upgrader market, consumers who learned from their first experience with a digital camera what they want in their next upgraded model. Whether it's a larger LCD, a longer battery life, faster response time, higher performance video features or more automatic controls, Sony delivered. And this high-growth, highly profitable consumer group will continue to be a major driving force in product development. Sony's top-selling Cyber-shot DSC-T1 further underscored this year that style is also a powerful factor in the purchase decision.

Options for printing at home are now faster, cheaper and better, and retail kiosk printing, for a broad segment of the digital consumers, has become a happy habit. In fact, according to estimates by the Photo Marketing Association, retail printing has jumped from 9 percent of all prints in 2002 to more than one-third of all prints this year. While it's still a 4x6 game, that's not the end of the story. We know the customers who use our PictureStation kiosks like being able to enlarge, edit and print on their time, and enjoy the kiosks' enlargement size variety and interactivity.

We're looking forward to the next year as another wave of upgraders continues to learn and benefit from Sony's digital imaging solutions.


OLYMPUS
Listen to Your Customers

by Martin Lee
Vice President of Marketing, Consumer Products Group, Olympus In a competitive market crowded with digital camera models, Olympus is cutting through the clutter and taking the lead with products like the Stylus line. The new Stylus Verve, launched last month at Olympus Fashion Week, will set a new standard for digital camera function and style. In 2004 we have set new standards for prosumer digital cameras with the introduction of the C-8080. And we have bridged the gap between capture and printing digital images with the new P-10 personal photo printer.

One of Olympus' objectives is to strengthen its position in the Digital SLR camera market. The Olympus E-1 Digital SLR System was born out of our desire to develop a truly digital camera, one in which all components were reconsidered from a digital perspective, and designed to work together to deliver ultra high-resolution digital images.

As consumer digital photography becomes increasingly popular, camera companies must begin to sustain and grow their customer base in order to survive. Olympus must deliver on the expectations that brought consumers to make the purchase—and then keep them as long-term Olympus users. The key to this is constant progress—using technology as an accelerator of momentum, not a creator of it. Becoming pioneers in an application of technology and then dominating that market space. Of equal importance is how Olympus reacts to technological changes: with thoughtfulness and creativity, driven by our compulsion to turn unrealized potential into results, and introducing products that are designed to do more.

In addition, Olympus will support these new products with high-profile national television and print advertising. Moreover, our numerous sponsorships, which include Olympus Fashion week and the U.S. Open Championship tennis tournament, as well as America 24/7, the largest collaborative photographic project in history, continue to demonstrate our commitment to high performance products and design innovation. Fashion Week, held in New York City each September and February, has served as the ideal venue to expose the new E-1 Digital SLR System to professional photographers. Our sponsorship of the U.S. Open Tennis Championship, one of the world's best-known sporting events, raises our visibility across all business targets and customer segments.

Olympus is inspired and informed by our long history of innovation and technological precision. Yet we constantly are moving forward, with a focus on new technologies. The reason we are able to continuously improve and refine what we do is simple: we listen to what out customer and business partners tell us.


KONICA MINOLTA
Encourage Consumers to Print

by Todd Schrader
Vice President of Marketing, Konica Minolta Photo Imaging U.S.A., Inc. Thanks to the growing consumer demand for all things digital, as we enter 2005 there's a renewed sense of optimism and hope for our industry. A rising tide does float all ships and trends in the broader consumer electronics arena continue to have significant impact in our converging worlds of photography and digital imaging. That's not to say traditional analog photography is extinct nor will it be in the near future. Film cameras, film, single use cameras plus interchangeable lenses and accessories still serve an important role for many consumers; those manufacturers and retailers who support the broadest base of customers will continue to enjoy their success in a very competitive market.

Today's generation of powerful personal computers featuring robust multimedia operating systems have spawned an unprecedented level of extremely powerful digital cameras, scanners and high-quality printers. As new consumers dip their toes into the "digital waters" their desire to trade-up to the latest technologies comes into sharp focus. The result is that a wider range of photographers from those who are content with ordinary snapshots to those who earn their living with a camera, have now been empowered to create and share their photographs in record numbers. And that is a trend that's here to stay.

The near-term challenge for everyone in this industry is finding a way to tap into this broad consumer demand which has spawned new competitors—while profitably growing their businesses. Only those companies who succeed at understanding this business dynamic and add value to every sale they make will keep up with the competitive pressure necessary for long-term staying power—and that's as true for manufacturers as it is for retailers.


   







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