The Impact Of The Digital SLR

TWICE: What is your impression of the digital SLR? What impact will it have on the market, particularly high-end, fixed lens models?

Peck: When the Digital Rebel was introduced, it touched off a firestorm of activity between retailers and consumers. I have to relate that back to 1976 when the AE-1 was introduced. It was a model that made photography simple and was very affordable to the consumer at that time.

Up until last year a digital SLR was quite expensive and out of reach to the average consumer. Second- and third-generation users of digital cameras were frustrated by shutter lag, by the auto-focus systems. They were frustrated by the limited flash of point-and-shoot type cameras. So they are looking for something where they can do a little bit more. Which is why we saw explosive growth of digital SLRs.

It was mentioned before that the retail market was segmenting itself but the Digital Rebel, everybody wanted to carry it, from the lowest-end retailer to the highest-end specialty store. There was a huge demand for this product.

Lee: The SLR market is strong and it is good for manufacturers, and it is going to be good for consumers. We do think that anyone who says it is not going to impact $800 to $900 full-featured point-and-shoot cameras is dreaming. It is going to impact it. Those products will still have a strong place in the marketplace. They are going to have to hit the [right] price points.

Peck: I'd add something on the impact on the $999 price point, 8-megapixel cameras in the market: [The digital SLR] has had an impact on those products, and I believe to be successful those price points are going to have to come down.

Young: I think that the SLR is successful in part because it is familiar. It has the same shape as a pro camera. We are seeing a lot of pent-up demand for something that felt like a film camera and acted like a film camera but was digital.

But so do those high-end 8-megapixel cameras. While you may call them point-and-shoots, I don't think of them that way. There are things that we can do in those designs that you can't do with an SLR. There are things you can do with size. There are things you can do with quality of a single lens in terms of focal range and brightness that you can't do with an SLR lens. There are things you can't do with an SLR, like video, that we can do full frame, 30 frames per second, in one of those $800, $900, $1,000 high-end [fixed-lens] cameras.

Lee: Good point. But I think you are also assuming that SLRs are going to stay like they are now, and at Olympus we don't think that they are. I think you'll see SLRs doing different things that they couldn't do in the 35mm world.

Ryan: The user need is still there [for fixed-lens models] based on things that it can do that a digital SLR can't, and $499 is the killer price point. They can squeeze out a coexistence model but [the high-end, fixed-lens cameras] will have to come down from $999 to something close to $500.

Peck: It is very reminiscent to 15, 20 years ago where a household may have two or three or four or five cameras. I just don't look at it as an either/or situation.

Sienkiewicz: We think the SLRs are wonderful. We wouldn't be spending the money that we are if we didn't. However, we also realize that they are not for everybody. There are people that are far better off with an all-in-one camera with a 28 to 200 lens. We are not backing away from that category.

Nelkin: When we look at the market, we find what the customer wants from the digital SLR is one of two things. The customer wants to use his old lenses, or he likes it because it feels like a camera. There is no lag. So [in the d-SLR] all the negatives points that we had talked about in the digital camera market were overcome.

You have also caused us to innovate in the middle of the line, with things like 12x optical zoom lenses.