Smartphones Crush Digital Camera Market

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The soaring popularity of
smartphones is crushing demand for point-and-shoot cameras, threatening the
once-vibrant sector as firms scramble to hit back with web-friendly features
and boost quality, analysts say.A sharp drop in sales of digital compact
cameras marks them as the latest casualty of smartphones as videogame consoles
and portable music players also struggle against the all-in-one features offered
by the likes of Apple’s iPhone and the Samsung Galaxy.

Just as digital
cameras all but destroyed the market for photographic film, the rapid shift to
picture-taking smartphones has torn into a camera sector dominated by Japanese
firms including Canon, Olympus, Sony and Nikon.

“We may be seeing the
beginning of the collapse of the compact camera market,” said Nobuo Kurahashi,
analyst at Mizuho Investors Securities.
Figures from Japan’s
Camera and Imaging Products Association echo the analyst’s grim prediction.
Global shipments of
digital cameras among Japanese firms tumbled about 42 percent in September from
a year ago to 7.58 million units, with compact offerings falling 48 percent,
according to the Association.
Higher-end cameras
with detachable lenses fell a more modest 7.4 percent in that time, it said.
Part of the decline
was due to weakness in debt-hit Europe and a Tokyo-Beijing territorial spat
that has sparked a consumer boycott of Japan-brand products in the China
market.
But smartphones have
proved a mighty rival to point-and-shoot cameras, analysts say, offering an
all-in-one phone, computer and camera with comparatively high quality pictures
and Internet photo downloading.
Those features have
also dug into videogame makers such as Nintendo, which has just released its
new Wii U game console, as smartphone owners increasingly download free online
games or store music on the devices instead of using standalone MP3 players.
“The market for
compact digital cameras shrank at a faster speed and scale than we had imagined
as smartphones with camera functions spread around the world,” Olympus
president Hiroyuki Sasa told a news briefing this month.
Olympus said its
camera business lost money in its fiscal first-half due to the growing
popularity of camera-equipped smartphones, and a strong yen which makes
Japanese exports less competitive overseas.
Digital camera firms
have scaled back their sales targets for the fiscal year to March in a
“collapsing” market, said Tetsuya Wadaki, an analyst at Nomura Securities.
“Order volumes at
parts suppliers currently appear to be down more than 30 percent year-on-year,”
Wadaki said.
Firms are scrambling
to keep improving picture quality, offer features such as water-proofing and
expand their Internet features, like allowing users to share pictures through
social media networks.
Camera makers say
growth areas include emerging economies — where many own neither a camera nor a
smartphone — along with replacement demand among compact-camera owners.
And the fall-off in
demand has not been as stark for the pricier detachable lens cameras favoured
by avid photographers and growing ranks of camera-buff retirees, particularly
in rapidly ageing Japan, they say.
Another emerging
battleground is for mirror-less cameras which can be made nearly as small as
compact cameras but with picture quality that rivals their bulkier
counterparts.
Canon insists the
market has not been abandoned to smartphones.
“Demand for quality
snapshots is there, like taking pictures of your friends’ weddings, an overseas
vacation, or your children,” a Canon spokesman said.
“We believe there are
many people who need compact cameras,” he added.
Mizuho analyst
Kurahashi acknowledged that compact cameras “will not disappear”.
“But we see the
current trend continuing as image quality in smartphone cameras steadily
improves,” he said.
“The compact camera
market is going to keep shrinking and it’s difficult to forecast any immediate
comeback, or have any optimism.”

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