Digital Camera-Phones Sales Are Surging

San Mateo, Calif.— Cellular phones with embedded digital cameras or digital camera attachments have exploded onto the retail market and are poised to outpace film and digital camera unit sales combined in 2003, according to a recent report from the research firm Future Image.

The report, titled "The Camera-Phone Phenomenon – A New Deal In Imaging" highlights an emerging picture-taking technology that, while popular overseas, has yet to grip the hearts and minds of American consumers. That, according to Future Image, will change in 2003.

The report forecasts that 1-megapixel quality camera-phones will be on the market within months, with 2- and 3-megapixel units following close behind. This would bring camera phones into the resolution-range of mass-market digital still cameras, but with none of the associated features that govern picture quality.

"The camera-phone is about to evolve from an Asian phenomenon whose scale warrants global attention, into a global phenomenon" said Alexis Gerard, president, Future Image. "In less than four years from their first commercial introduction, these devices will have become the world's most widely used picture-taking appliances."

The Photo Marketing Association has predicted that 24.9 million cameras (excluding single-use models) will be sold in 2003. By contrast, the Boston-based firm, Strategy Analytics, estimated that 36 million camera phones will be sold by the end of 2003.

Though standalone digital cameras remain a high-growth category, with an estimated 25.5 percent growth in unit sellthrough in 2002, according to the Belmont, Calif.-based Imerge Consulting, the emergence of cellphones with embedded digital cameras has begun to challenge the market by improving the picture-taking technology in the phones. According to Future Image, the challenges to mass-market adoption of camera-phones in the United States — both business and technical — will be met within the next 12 months.

It noted that carriers such as Sprint, T-Mobile, and AT&T have already been sowing marketing seeds among customers for months with television and print ads aimed at raising public awareness of picture messaging.