Lower-End Cams Dominate Digital

by Doug Olenick On Jan 6 2001 - 8:00am

LA JOLLA, CALIF. -Five years after the first digital camera was introduced the market has oddly segmented itself, with the majority of cameras selling at the high and entry-level price points and the usually popular midrange bringing up the rear.

According to ARS, La Jolla, Calif., 35 percent of all cameras purchased cost less than $300, and 25 percent $700 or more.

This presents an annoying problem for vendors, said ARS analyst Amy Wyniger. Although it is financially attractive to play in the low end, these produce low profit margins and astronomically high-up to 50 percent-return rates.

Wyniger said these returns start a vicious cycle where the consumer looses faith in a particular brand, which leads to the retailer becoming annoyed with that company and eventually dropping the vendor from their merchandise mix.

The best way to avoid the majority of returns is for vendors to continually improve the camera's user friendliness and usefulness, either through the bundled software or online photo-finishing offerings, she said.

This is not an issue with the more ex-pensive models because they are bought by more consumers who understand the camera's capabilities and how to get the most out of the devices.

Digital Camera Market Share By Price - September 2000