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HP, Sony Duel for Digital
The Business

HEWLETT Packard (HP) is to challenge Sony for dominance of the exploding global market in compact digital cameras.

HP intends to dovetail its printer technology with its cameras to offer consumers a more comprehensive service than Sony.

An HP spokesman said: HPs cameras are designed to appeal to the same target market as Sonys but HP will leverage its printer technology to offer consumers a total picture-development service.

Last week in Cologne, at the major photography show Photokina, HP signalled the expansion of its online and retail photobusinesses in Europe. In the UK, HP has signed two deals with leading photographic equipment equipment retailer Jessops, now one of the first retailers outside North America to install the HP Photosmart Studios in its high-street shops. These allow customers to make creative changes to their pictures without any knowledge of photographic software.

HP also intends to host an online photo site, Picture House, enabling Jessops customers to upload photos to the online photo site and pick up prints at the Jessops store of their choice.

HP also claims to have invented a new category of compact printers, HP appliance printers, which are designed to make high-quality photographic prints. These have integrated Bluetooth and PictBridge wireless technologies so that photos can be uploaded instantly and wirelessly.

With HPs entry into the retail photo-printing market in Europe, the company is now competing in the $35bn-plus (18.4bn, E26.9bn) photo industry on an international scale, said the spokesman.

According to a 2006 InfoTrends survey of nearly 2,000 internet users in western Europe, almost 75% of respondents own a digital camera. HP believes that digital photography is fast becoming as familiar and commonplace as watching a TV or listening to a CD.

Sales of digital cameras in the UK alone have broken the 20m barrier for the first time, according to market research firm GfK. Despite the fact that the technology only was introduced to the retail market as recently as 1997, two thirds of all households now own a digital camera. The UK market is worth almost 1bn annually, with 3.3m digital cameras sold this year already.

But GfK reports that the market is far from saturated and that there is rapid growth in the additional and replacement market as consumers either trade-up and replace their old digital camera or buy an additional piece of equipment.

However, despite more feature packed cameras with greater pixel resolution, manufacturers and retailers are finding it difficult to increase the price of a camera. Since 1997, the average price of a Digital Camera has fallen from 464 to 169.

This tremendous growth has adversely impacted sales of traditional cameras and film. The value of the analogue camera market is estimated to have fallen 68% over the past year ending August 2006 with many retailers in Great Britain deciding to stop stocking analogue cameras in the last few years.

Traditional film sales have declined over 75% since 1997. Single use camera sales also declined by over 18% in the last year, as the use of mobile phone cameras becomes an increasing threat.

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