Digital camera phone boom peaking? Camera phones confusing

The demand for digital cameras might be peaking, and camera phones have potential for increasing revenues for photo processing if consumers can figure out how to get photos out of the handsets and into the hands of photo labs, according to an article in USA Today.

The Photo Marketing Association International (PMAI), that's holding its annual convention now, says digital camera sales are expected to grow at 13 percent this year, a decrease from previous years.  The association says 52 percent of U.S. households will own a digital camera by the end of this year.

A PMAI report I found on the organization's Web site, "Photo Industry 2005:  Review and Forcecast," says in 2003, 28 percent of U.S. households owned a digital camera.  Digital camera sales grew 40 percent in 2004, when 18.2 million cameras were sold. 

More growth, then plateauing

This year, 20.5 million digital cameras are expected to be sold, 82 percent of the total camera market, and increase from 73 percent in 2004, according to the report (see below).  Digital camera sales are expected to grow until the end of 2006 or 2007 and then the sales slow considerably.

The PMAI report says, "As the digital camera market matures, industry revenue will increasingly depend on accessories, consumables and services."

In 2004, more than 55 percent of digital cameras were four megapixels or more compared to 30 percent in 2003 (see below).

Camera phone are revolutionary

As I've been writing, camera phones are indeed a revolution.  The PMAI report says, "Cameraphones have the potential to revolutionize the way consumers take and share pictures....Eleven percent of U.S. households, more than 12 million households, are estimated to have owned a cameraphone in 2004, up from 2.5 percent the previous year.

"The usage of cameraphones is, however, low and has not generated significant value for retailers yet.  Resolutions of cameraphones are still low and network speeds are currently not sufficient for transmitting large image files

"Look for cameraphones to compete with single-use cameras in the short-term and low-end digital cameras in the near future."

Single-use cameras peak

Single-use cameras -- a shining light in the sales of cameras -- have peaked.  The PMAI report estimates that single-use camera sales peak in 2004 at 218 million units.  Sales will be "virtually unchanged" in 2005 (see below).

The film camera market declined 19 percent in 2004 with 656 million cameras and is expected to decrease to 532 units in 2005.

Printing photos

The number of photos printed in 2004 is expected to have been 27.4 billion, a decrease from last year of 28.7 billion, the PMAI report says.  Sixty-one percent -- 3.1 billion -- prints were made at home compared to 76 percent (2.3 billion) in 2003.

The report notes, "Home printing is therefore increasing in absolute volume but other printing methods are growing faster and gaining share." These methods include printing from kiosks, minilabs and online (see below).

Online ordering will increase significantly.  It's convenient and the easiest way for consumer to order prints stored on their computers, the PMAI says.

Opportunities

Although billions of photos are printed, the majority are not (see below) and the PMAI sees significant opportunities for increasing revenes by convincing consumers to print more photos.

Also, the use of non-traditional cameras, such as camera phones and PDAs, could result in an explosion of additional photos and represent new opportunities for photo finishers.

It's not an entirely rosy situation.  The photo finishing market isn't doing as well as it would like.  The PMAI notes, "Losses in the photofinishing market are accerlating.  The total value of film processing in the country is projected to be at $3.7 billion in 2005, compared to $4.6 billion and $5.3 billion in 2004 and 2003, respectively."

Taking action

The photo finishing industry definitely is not ignoring the problems and opportunities [this is me speaking <g>).  They understand the problem.

Take a look at PicturesMatter.com, an industry effort to encourage consumers to print more photos.  (Disclosure:  I'm writing some information for that site.)

PicturesMatter is more than just a Web site.  For example, a child psychologist discusses the value of photos to preserve childhood memories and is being promoted as a guest speaker on television and radio.

More opportunities for selling prints

Also, at least one association for photo finishers in very interested in working with cellular operators to sign up their members as camera phone resellers.  (If you're a cellular operator or distributor and want to explore this opportunity, contact me.)

The cellular industry certainly hasn't ignored the potential revenues from printing camera phone images.  Companies like Kodak Mobile and Fuji are working with cellular companies around the world.

Just take a look at the articles in the "Printing" section of this weblog.

Good for consumers, problems for the industry

The USA Today article notes that competition in the digital camera industry is great for consumers, as prices fall and camera resolution and features increase.  But is isn't always great for the industry.

The cost of printing a 4" x 6" photo has decreased from $.60 in 2000 to $.30 in 2004, the PMAI says.

Digital camera companies are slashing prices and increasing features.  USA Today points to Nikon pricing its seven megapixel CoolPix 7600 at $379.  (Amazing.  Just a couple of years ago I bought a four megapixel Canon PowerShot 45 for something like $550.)

Camera phones hold promise, but...

USA Today says, "Photofinishers see the explosion in camera phones as a potential holy grail. Some 150 million camera phones sold worldwide last year, compared with 64 million digital cameras. That's a lot of potential prints to process.

"But camera phones have fuzzy, low-resolution images, and pictures are hard to transfer."

In addition, many camera phone users have problems getting photos printed because there's no way to physical get the photos out of many handsets except by sending images over the cellular network.  Also, the process of transferring photos for printing can be difficult.

Not there yet

USA Today notes, "Expectations for camera-phone prints at last year's PMAI show were huge, but so far are unfulfilled."

I am optimistic.  I believe consumers will eventually force cellular operators to be more open about enabling camera phone users to transfer photos, whether through a cable to a computer, Bluetooth or a memory card.

The user-hostile attitude of some operators who demand that handset vendors disable or not include Bluetooth, a data cable capability and a memory card slot has got to end.

Comments

[Tychocat]

I'm guessing that my overall attitude towards my camphone photos is eccentric, judging from the rush to markets that don't engage me. I rarely print my photos, and don't keep online albums. I mainly regale my friends with photographic proof of my travels, sending them pictures of events at least on the same day by e-mail. (One of my snarkier real-time pictures was of myself and my girlfriend watching the sunrise on New Year's Day on a Hawaiian beach.)

I suppose it might make sense if I kept a blog, but I'm too private for that... in any case, all I really need from a camphone is really good camera. All too often, I'm finding the photos from my old SE T300 need to take a meeting with PhotoShop (to adjust the contrast, and occasionally the color *groan*) before I can cheerfully e-mail them on.