iSuppli: Cellphones Challenge Low-End Digital Still Cameras

By Joseph Palenchar -- TWICE, 3/8/2010

EL SEGUNDO, CALIF. — Cameraequipped cellphones might soon begin to cannibalize sales of low-end digital still cameras as they add more megapixels and as more camera phones come with f lash capabilities, iSuppli analyst Pam Tufegdzic said.

Cannibalization “is likely to occur fi rst in Asia and Europe as consumers in these regions seem to be more comfortable with taking pictures using camera phones,” she said. But as the number of megapixels in camera phones rises, the quality of some camera phones “will rival low-end point-and-shoot cameras, presenting a competitive threat,” she said.

Although more camera phone megapixels deliver smoother, less-pixelated images, she continued, camera phone makers are focusing on other performance enhancements to make camera phones a capable competitor to low-end cameras.

Camera phone makers will focus on adding optical zoom, auto focus, improved f lashes and more sophisticated image-processing electronics, she explained. Features such as image stabilization, automatic judgment and multiple image capture will also migrate from cameras to camera phones during the next few years, she added.

Camera makers are responding to the competitive threat by increasing resolution in smaller form factors, but Tufegdzic questioned whether that would be enough “to fend off the incoming attack from handsets.”

The average resolution for camera phone CMOS sensors will rise to 5.7 megapixels in 2013, up 171.4 percent from 2.1 megapixels in 2009, iSuppli noted. In contrast, camera megapixels will rise to 13.9 in 2013, up only 46.3 percent from 9.5 megapixels in 2009.