What Can Save P&S Cameras?

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Mar 13, 2014

The digital camera market is in decline. Vendors are cutting back on their product range. Olympus and Fujifilm have announced that they will exit low end compact cameras. Even Canon has hinted following rumours that they will consider what to do with cameras that are priced under ¥20,000. Nikon seems to be the vendor that is planning to stay in for the long run, capturing low hanging sales as competitors exit.

InfoTrends’ forecast shows the trend clearly over the last 10 years. 2014 is shaping up to show continued steep decline. Changes in technology, the emergence of competing devices and perhaps a tendency for camera vendors to believe that the exceptional image quality found in cameras will protect them from competition can all be used to explain the shape of the curve below.

Figure: InfoTrends’ Worldwide Forecast for P&S Cameras, historical data 2004-2013

In spite of the downward trend InfoTrends believes that cameras, P&S and ILCs, are here to stay for the long term. Photography holds a deeply important role in most societies and cultures around the world. We all like to record special events and memorable moments during our lifetime and most of us would like to share those images with future generations. These are fundamental drivers for photo taking. Most of these images can be taken with smartphones. However, for hobbyists and those who are reaching a milestone in their life such as the birth of a child standalone cameras will be the camera of choice. For this group of consumers image quality will be of high importance. InfoTrends sees the camera market as reverting to what it was when we used film. Cameras are becoming household items, they are replaced infrequently and mainly hobbyists are spending large amounts of money upgrading their camera equipment.

For P&S cameras to regain some foothold camera vendors and stakeholders in the camera market need to think beyond the point of capture. InfoTrends has long spoken about the need for connectivity in cameras. In the last 6 months we have seen that connectivity is becoming a standard feature in P&S cameras. Connectivity is the first step to enable images to move through the imaging ecosystem. Today, there is no single camera vendor that is showing that they are thinking carefully about what consumers would like to do with images once they have been captured. We think that vendors need to consider the following:

  • An open operating system — this will create the possibility of apps that can be downloaded to the camera which in turn will create a personal photo experience
  • Better processors — will enable more complex imaging tasks to be performed like HDR or facial recognition
  • On camera workflow — ownership of computers will decline as handheld devices are replacing them. Consumers in developing markets will skip computers and move straight to mobile devices. Camera vendors need to consider how they fit into a computer free eco-system

We think that the real opportunity is in building intelligence into cameras. By intelligence we mean cameras that in some way can anticipate the needs or requirements of the user.  Camera vendors are not well positioned to capitalize on this opportunity themselves. They need to seek out software partners who can help them. Some of examples of start-ups with intelligent imaging solutions are:

Lyve — will soon be launching an image storage solution which anticipates where you would like to view your images

Magisto — an Israeli app company showed at Mobile World Congress technologies that are making intelligent decisions and which will come in future releases of their app.

Flyby — is a US company that has created a location based messaging app that uses image recognition.

Perhaps even more fundamental to the survival of P&S cameras is the willingness of camera vendors to change their cultures to ones that reward risk taking and which embrace change.

During 2014 InfoTrends will be launching the Imaging Innovators Service. This service will cover companies and services that are breaking new ground in the imaging market and consider their impact. If you would like more information about this service please contact matthew.okeefe@infotrends.com .


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