Camera phones eating into South Korea's digital camera market

The Korea Herald reports that camera phones are eating into South Korea's digital camera marketplace. The article has fewer hard facts to back up this claim than I woud like, but reports that digital camera vendors are worried about the effects of camera phones.

The last paragraph of the article has the best information: "Officials at LG Corp., which handles the distribution of Canon cameras in Korea, said the outlook for compact digital cameras is dimming due to the fast penetration of camera phones."

Samsung and LG have already introduced one megapixel camera phones and will introduce two megapixel models during the first half of this year, thus "sounding an alarm to digital camera manufacturers such as Sony, Canon, Olympus and Nikon." More than half of Samsung's cellular phones -- 51 percent -- will feature cameras this year.

New digital camera strategies

The Korea Herald says the popularity of camera phones is forcing digital camera vendors to adopt new strategies, such as emphasizing greater resolution and more features. The article notes that Canon's new models focus on higher resolution.

"On the IXUS 500, the successor to its popular compact IXUS 400 model, the company raised the resolution from 4 million to 5 million pixels without changing other key functions or the design."

On Monday I wrote an entry about how a Nokia executive says camera phones will kill digital cameras in five years. I think the executive ought to stop smoking those "funny" cigarettes because there will be a substantial demand for higher end digital cameras with superior lenses and features.

Demand will decrease

However, as I wrote, I do indeed see camera phones reducing sales of lower end digital cameras. When two million and three million pixel camera phones are readily available, they will place even greater pressure on the digital camera market.

I am assuming that the photo quality is good enough (pixels are just one part of the equation).

What some people tend to forget is a camera phone is more than a still camera! It offers such useful and fun capablities as ringtones, a camcorder, MP3 player, PDA, TV (of sorts), SMS, e-mail, Web surfing, eBook reader and, of course, voice communications

Features will spark demand

When you add all these features into the equation -- and also figure a hefty price subsidy (sometimes) by cellular operators for signing a one- or two-year contract -- you start realizing that camera phones offer lots of advantages over digital cameras for people who are not true photo aficionados.

As The Korea Herald's article notes, "The greater pixels number means better picture quality when making large prints. But experts said ordinary users who shoot their everyday life with compact cameras do not need such high resolution.

"Just 2 million to 3 million pixels are sufficient for family albums and other general photography."

Yes, but...

What is sufficient doesn't necessarily mean good enough, at least for some people. If you crop photos or want to print them large, you want more than three megapixels. So, I would be careful about saying that any technological advance is "sufficient" -- at least for more than a few years.

But for many people, two megapixel or three megapixel (again, assuming good photo quality) camera phones will be just fine for taking snapshots. That's why digital camera vendors need to worry.