Digital Still Cameras: It’s Time for More Innovation

Jeff Hayes
Jul 7, 2010

I read an interesting article today in the Wall Street Journal that reminded me of the lack of innovation taking place in the digital still camera market. In the article Videogame Makers in Talks About Portable 3G Connections there is a quote from NTT DoCoMo President Ryuji Yamada who said, “videogame makers know that in order for portable game machines to take the next step forward, they need wireless. We are discussing this with various players.”

Unfortunately, most of the camera vendors have taken a very traditional approach to camera design by primarily focusing on megapixels, zoom, shutter lag time, and lower prices. While these improvements are all very nice, my feeling is they are pretty much played out.

The following chart shows DSC camera placements in North America over the last five years along with average megapixels and average selling price. Let’s face it, the market is saturated. DSC vendors have fulfilled the basic needs of consumers (taking a quality photo) with a wide range of cameras that meets every traditional need at a price point they can afford.

Lower Prices and More Megapixels Aren’t Driving More DSC Shipments

North American DSC Shipments, ASP and AMP

I believe further investments in improvements along these traditional vectors are likely to bring diminishing returns to the camera vendors and, more importantly, to the end consumer, particularly in the mobile/Internet/social media-centric developed markets of North America and Western Europe.

What’s a camera vendor to do?

More and more people want to share their pictures electronically — through their Facebook page, email, MMS, and numerous other sites and services. They want their friends to be “in the moment” with them. Consumers don’t want to wait until they can print out a high quality 4×6 and mail it to a friend. Life’s too short and moves too fast. We want to share it now! (for more details check out InfoTrends Mobile Photography and Social Network/Photo Sharing studies)

DSC vendors have dabbled with wireless options, but haven’t really embraced wireless connectivity as a critical dimension of the modern camera — something as important as photo quality. There are cameras with WiFi and Eye-Fi WiFi cards, but most of these devices are designed to get your picture off the camera and on to the PC where you can edit, print, or share it. Nice, but not exactly revolutionary. InfoTrends estimates less than 1% of DSCs ship with some type of built-in wireless connectivity capability.

Meanwhile my new iPhone 4 has a five mega pixel camera with a flash that lets me tag and share pictures (and video) via WiFi or 3G. In other words, anywhere anytime. (Well, maybe not with current AT&T service levels in the US.) You also have a growing number of Google Android-based phones that have very nice photo and video capabilities plus very intriguing integration with websites, web services, and applications. These smartphones will become more valuable as the “functionality” of the Web expands.

The WSJ article on video games and 3G connectivity closed with an observation from Yusuke Tsunoda, an analyst at Tokai Tokyo Research Center. He noted talks of a carrier partnership are a sign that the videogame-hardware makers are feeling the pressure from smartphones, which are used to download and play simple games. “The distinction between gaming devices and mobile communication devices, like smartphones, are blurring. And it may eventually disappear,” said Mr. Tsunoda.

I believe DSC vendors need to take note of what is happening in the video game and smartphone markets and shake up their product design. Embrace broadband wireless connectivity and the Web as core functions/resources that are part of digital still cameras. Figure out the engineering, work out deals with the carriers, and ramp up the marketing programs. It’s time for more innovation!

Post note:

My colleague Mette Eriksen alerted me to an article published yesterday by Reuters with a statement by the recently appointed Nikon president Makoto Kimura that the company intends to form wide-ranging ties with online and mobile device companies to provide more ways of storing and sharing photographs taken on its digital cameras.

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