Digicam Market Grapples With Several Challenges Ahead

TWICE: Can you identify the single largest challenge facing the imaging industry as we move into the holidays?

Phil Lubell, Sony: I think one of the challenges, which is not unique to any category, is for the manufacturers and retailers to get credit for some of the features that are now in cameras that improve the consumer experience. Obviously, physical design and style are easy things to get credit for on a retail sales floor. But it's the things underneath, in the electronics and the software that both manufacturers and retailers need to get across to the end user.

Jerry Magee, Kodak: Similar to what Phil said, it's a question of how we can communicate our secondary and tertiary features. As people are buying their second- or third-time cameras, it gets harder to communicate that message especially when the retailers are asking for top three blocks. It's going to become harder for us to tailor our messaging to that need. It might become more specialized in terms of marketing and messaging to a smaller niche. And that's something that concerns us.

Steve Cordova, Samsung: I think the single largest challenge for us is market saturation. And I think statistics clearly indicate that we're about 70 percent right now. Most people already own a digital camera. So I think the age of the early adopter is more than past. I think what this means is that the manufacturers and retailers need to continue to provide consumers new and compelling reasons to buy a digital camera.

David Lee, Nikon: The digital camera market has been fairly resilient so far. We see one of the biggest challenges out there is the price compression. Keeping manufacturers and retailers profitable will probably be one of the biggest challenges as the market starts to peak and we try to deliver more and more features to the consumer.

John Maciag, Olympus: We think that understanding the consumer is the key challenge. It will be key to having a successful next 12 months, and specifically key for this holiday season. The manufacturers and the retailers who succeed in understanding their consumer based on the fragmentation and segmentation of the market as it's going through right now, will be those who are successful. And certainly products that are innovative, that have pioneering features, will be those that will be well accepted by both the retailer and the consumers.

Darin Pepple, Fujifilm: I think [the biggest challenge] is the average unit price and the sheer volume of models that are compressing prices. It's really making it difficult to compete. And there are many more manufacturers now willing to compete at lower prices. And the ability to educate the consumers then at those lower price points as to the features and benefits of the cameras, and to what they should be looking for, becomes very difficult. You have the top three basic issues that you have to try and communicate within a very short time.

Ross Rubin, The NPD Group: The set of features that are driving the market now are not necessarily easy to communicate as a pure megapixel message. But I think what it adds up to is really mind share, particularly for the holiday season, and particularly in a gift-giving scenario, there's competition with other categories, particularly for small portable electronics.