Digital cameras on the decline

Are digital camera sales going to decrease in the coming years? Well according to a recent PMA article and IDC report this will happen in the near future.

A few thoughts.

Digital camera manufactures aggressively pushed out new cameras with slightly better features each year before the market really needed the new features.
Digital cameras have now reached the price sensitive mainstream consumer. Once satisfied with a decent low cost option they will not purchase for a few years.
Most mainstream users don’t care for more megapixels they just want a good picture at a good price.
Cell phones have begun to dip into the digital photography market. The consumer pie will be divided up with multiple devices cell phones, digital cameras, and maybe more long term but video units.

Check out the pma article below for more details.

Digital camera market peaked too soon, says IDC report

The digital camera industry has reached maturity early, and the heady growth rates will slow, according to a recent report, notes CNET News.com. Shipments will be strong in the next couple years but will slow and then dip over the long term, research firm IDC forecast. Indications are that the market will peak prematurely, missing the opportunity to replace film cameras as the predominant method of taking photos--instead the market will be made up of a more diverse range of devices with photo capturing abilities, such as cell phones and other combination devices.

"Digital cameras won't become as ubiquitous as film because manufacturers became obsessed with features instead of the unmet market," said Chris Chute, digital imaging analyst with IDC. "They were rewarded with market growth, but once they filled that bucket there wasn't any other bucket to fill."

Though shipments will continue to be strong through 2006--reaching 94 million units--growth will slow then begin shrinking in 2007. By 2009, shipments will decline to 82 million units, Chute forecast.

The digital camera is still viewed as a PC peripheral limiting its reach over the long term. Consumers are also shifting their buying patterns and instead of focusing on megapixels, they're turning to prices, which are also dipping, reports CNET News.com. Average selling prices for cameras will fall from last year's $340 to $295 by the end of 2005 and $200 by 2009.

Manufacturers will be re-evaluating their roles in the digital camera market during the next 18 months, Chute said. The top digital camera makers worldwide and in the United States are Canon, Hewlett-Packard, Eastman Kodak, Olympus, and Sony.