USA Today: Camera phones helping stock prices

USA Today reports in "Investors bet camera phones keeping clicking with consumers" that camera phones are improving (or could improve) stock prices of companies in a variety of categories, such as handset manufacturers, component vendors and cellular operators. I've been writing for more than a year (although not in this Weblog) that camera phones will spark significant opportunities across many sectors.

USA Today says, "Many stocks reflect the hype. A group of the major makers of camera phones is up 52% on average this year, while shares of companies that make pieces and parts that go into the phones have gained 207%.

"'They're outstanding,' says Richard Gould, portfolio manager of the Rockland Small Cap Growth fund, who is investing in, and using, the technology. Gould just bought a camera phone and used it this month while on a business trip to view photos of his 20-month-old daughter."

What companies are doing well?

The writer, Matt Krantz, isn't a rah-rah booster of camera phones, and that's good. He says that while the early signs for success are encouraging, you've got to be careful about investing. Wise advice.

In the handset category, Krantz says that about one-third of Nokia's phones shipped this year will include either an internal camera or the ability to attach an external camera. He quotes Richard Gould, portfolio manager of the Rockland Small Cap Growth fund, who says all Nokia handsets will include camera phone capabilities within 18 months.

There have been numerous articles in the press about Nokia's interest in camera phones, including one by CNET News where the head of the Finnish company says Nokia this year could be the largest manufacturer of digital cameras in the world.

Component vendors are winners

The biggest winners in the camera phone marketplace are the companies manufacturing the components. OmniVision is generating 23 percent to 40 percent of its revenues selling sensors to camera phone vendors, according to one analyst quoted.

In the future, companies that produce memory cards, such as SanDisk, could profit significantly from camera phones, USA Today says. According to the research group IDC, 64 percent of camera phones might include memory card slots by 2007.

The cellular operators will have the toughest time capitalizing on camera phones, according to the article. "Finally, there is the danger that this is just a fad. A third of camera-phone users stop using the camera part of their phones in just a few months, IDC found."

Nextel's problems

The article concludes with a discussion of Nextel, that isn't going to offer camera phones. "'We don't develop technology for technology's sake,' says spokesman Rich Pesce."

Too bad Pesce's obvious and "so what?" quote ends the article. Nextel is held hostage in a sense by Motorola as the supplier of its infrastructure and handsents. Motorola has had a terrible time trying to bring camera phones to the market, as I wrote previously. So even if Nextel loved camera phones, it might not be able to offer them soon.

To be fair, though, Nextel has another problem: It primarily targets business users, and many corporations are scared senseless (with the emphasis on senseless) about camera phones, as I wrote as few weeks ago.

Employee education and good marketing

I will never tire of writing that the solution to corporate stupidity and the growth of the camera phone market in general is employee education and good marketing. A few companies have legitimate security concerns and banning camera phones and other recording devices makes sense.

But the vast majority of companies are concerned that moronic men will snap photos of women in compromising positions. Nextel needs to educate its corporate customers about the value of camera phones for business applications -- something cellular operators haven't been doing.

In addition, the cellular industry needs to educate that marketplace about the value of camera phones beyond the simplistic TV commercials.

If any companies would be interested in help with camera phones marketing strategies and customer/employee education, send me an e-mail. It's part of my wireless data consulting business.

Comments

[felix]

Hello
I have a daughter doing her birthday ceremony on 14 of these month so i promise to get handset for her so i will like you to tell me much it will cost and how to pay
Please need your reply as soon as possible and u send it togather with the price ok
So i will even buy of mine i also want to change my handset
NOKIA 7610

[James Teske]

How do you invest in the Romanian wireless company Simeda? Is there a ticker symbol/ What exchange