The Year Behind, And Ahead

By Staff On Aug 4 2003 - 6:00am

TWICE:Where do you see the digital camera market today? What did we learn in 2002 that has had an impact on how we're doing business today?

Young: This is a turning-the-corner year for the industry because we just passed over 20 percent household penetration and at the same time, exceeded the number of conventional film cameras sold. It means a lot of changes in the kinds of consumers who are buying the cameras and the way they evaluate them. I don't think we're going to see anything less than the 50 percent rough unit growth we saw last year. It will be of a slightly different nature than last year, with far fewer earlier adopters and far more conventional photographers stepping into digital photography. And that can only be a good thing, because it pushes us to make it simpler to do.

Arnette: It was clearly a year of explosive growth. For the first time, people actually came into retail stores asking for digital cameras instead of PCs or printers, so it became the No. 1 selling item for a lot of retailers worldwide. I think it was refreshing for the channel to actually have something new, exciting and fresh to bring people in and to talk about.

Peck: Last year was probably one of the best ever, and 2003 should finish with remarkable growth as well. We're finding that people are using digital cameras now to capture memories, rather than just to send e-mails or store something in the computer. And once we can tap that market where it becomes a memory-making device, the next challenge that we're all going to face is, how to get them to make prints.

John Maciag (Olympus): Certainly a year of dynamite growth in the industry, which is even more impressive considering the gloomy economics that we lived through last year and the uncertain political climate that we're living in now. Imaging was an extremely strong category, outpacing most other categories in consumer electronics and it puts a lot of responsibility on us as manufacturers to deliver products to our retailers so they can actually drive their business.

We also learned that the digital SLR is becoming a more important part of the business and it's going to grow and outpace the remainder of a business that's growing very fast. There are a lot of different customers and markets to address this year.

Susan Schaffer (Fujifilm): One of the most encouraging factors was, I believe for the fourth year running, digital cameras maintained their position as one of the top gift-giving items at Christmas. Digital photography is definitely taking a different position in the consumer's mind and there's been a shift in the types of consumers that are in the market. You've gone from the early adopters to an evolution of the mass market, but still sustained a tech-savvy group that's supporting the SLR market and the new higher resolution cameras that are coming out.

But this evolution that's happening within the mass market, with traditional consumers who are continuing their role as the memory-keepers in the household, they are definitely interested in sharing the final output. Certainly e-mail is very important, but from what we've seen, the print becomes a critically important part of that mix for this audience. We think there's a huge opportunity in this market this year.

Sienkiewicz: We learned that Chicken Little was not misquoted. The sky is falling, prices continue to erode and that makes it increasingly difficult for us as suppliers and manufacturers to produce tenable products. It's good news for the consumer. He has a lot of choices at a number of different prices. Fortunately the other good news for us is that digital has not completely eroded the sale of film cameras, how long this will remain true, remains to be seen.

Finally, I think that the digital camera experience has given all users a new way to perceive the value of the image itself. Where in the old days, you would take a picture and it had some intrinsic value and you would attempt to keep even the bad ones, because you only got twelve back from the photofinisher anyway. Now there's absolutely no reverence for the image itself.

Grossman: The most surprising thing was that despite a difficult economy, it was a very satisfying year and I think that speaks a lot to the strength of the products. I think it certainly speaks a lot to the strength of the category. I think what we've seen is a real broad acceptance both on the low end and on the high end of the market. The mass market is certainly seeing a great benefit from that. We're also seeing a lot of repeat purchasing on the high end. We're seeing people going into their second and their third cameras and looking for advanced features, and looking for cameras that will give them better photographs. It's not just a snapshot, it's not just an e-mail anymore, it's a photograph. It's something that people are hanging on the wall now. And three, four years ago, you couldn't really do that.

And I would be remiss if I didn't echo what [John Maciag] said about the SLR category. Not only digital SLR, but film SLRs are hot. People are recognizing that photography is back.