Camera Makers Hope To Surpass Forecasts
Focus falls on non-computer users
By Greg Scoblete -- TWICE, 7/11/2005
New York — Despite forecasts showing a slowdown in the torrid growth of digital still cameras, manufacturers noted that initial second-quarter sales estimates beat forecasts, casting an optimistic sheen on the upcoming holiday season.
“This year has been a little bit slower in terms of growth than 2004,” said Chuck Westfall, technical information director, Canon. He estimated that the category could grow 15 percent to reach 24 million units by year's end.
“The numbers for the first half are coming in, and they're a little better than what we forecast,” Westfall added.
“I think the category continues to be strong,” said Philip Scott, general manager, Kodak “It's not as strong, or the growth percentage isn't as great as prior years, but I think this is going to be another year where we just under-predicted the size of the category for the full year.”
“Every month, sell-through is coming in a little bit higher, right around 30 percent growth,” said Stewart Muller, general manager, Olympus. “So what we thought was a 23 million unit category may be more like 24 or 25 million, which would be a 20 to 25 percent increase of the U.S. market.”
Driving the dollar-end of the market have been digital SLRs as 2005 has seen a field formerly dominated by Canon and Nikon joined by Olympus, Konica-Minolta and Pentax with aggressively priced interchangeable lens cameras.
“One area of growth which will be robust, meaning in excess of 60 percent unit growth, will be the digital SLR category. And that's obviously a good place for growth, because that keeps the average selling prices up for manufacturers as well as the retailer,” Muller said.
Of the projected 27 million units that IDC expects will be shipped in 2005, 2.5 million of them will be digital SLRs, said Chris Chute, senior analyst, IDC. From the $500 to $1,000, the “real action” is in the d-SLR market, not the high-end, ultra-zoom models in the same price band, Chute said.
“We still think there is a lot of value in a fixed lens model above $500. With the exception of an interchangeable lens, it offers much better features than a d-SLR,” said Ken Gerb, senior VP, Samsung.
On the lower end, pricing is “fiercely” competitive, and the quest for share has already caused several players, notably Kyocera, to exit the market, leaving retailers with a dilemma, said Gerb. “Do they buy from a brand that might not survive in the next few years?”
The consumer base is also shifting toward fewer newcomers and more repeat buyers. The resultant shift explains the significant improvements in camera performance and specifications, but has also raised the possibility that digital cameras will fail to achieve the widespread acceptance that their analog predecessors enjoyed, Chute said.
“There's nothing to indicate that camera makers can get beyond that computer-centric buyer,” Chute said.
“We are aiming at customers who don't own a computer,” said Ken Wardrop, product manager, Hewlett-Packard. “They want convenience and ease of use, and that's what we're focused on delivering.”
The desire to net non-computer users, coupled with the steep price cuts in hardware, have also made hard bundling digital cameras with photo printers far more viable this year than last, Wardrop said.
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