It seems very strange to me to pick up the Sunday flyer and see most digital cameras hitting $99 to $199 price points. This is reminiscent of the end of the film camera business 10 to 15 years ago when the industry matured and reached a low point in profitability.
What is interesting is that while digital cameras are similar to film cameras, in many ways they inherently have an added cost because of LCD’s, sensors and re-chargeable batteries. How can the industry survive on $99 digital cameras?
We know the film camera market matured primarily because the technology matured. It was hard for manufacturers to continue to develop innovative features to expand the market and justify higher price points. Clearly digital camera technology has not matured. So why does it seem that the market has matured?
Is it because the industry started segmenting cameras by mega-pixel and now the benefit of higher mega-pixels has diminished?
Is it because the industry decided to categorize zooms by 3, 4 and 5 time magnification instead of millimeters? I remember the days when the difference between 120mm and 140mm in a film camera meant something to the consumer.
Possibly manufacturers lack confidence in the advancement of technology such as face detection and image stabilization. Or possibly these features are not meaningful to consumers, at least not enough to maintain higher price points.
The real challenge in my opinion is that the industry is facing a self-fulfilling prophecy. Without adequate returns on investments what will motivate companies to develop new digital technology? Without new technology the industry will mature prematurely. Cameras will soon or may have already become commodities. Once cameras become commodities, manufacturers’ and retailers’ brands will no longer matter.
Sounds pretty pessimistic? Actually, I remain very optimistic about the future of the industry because manufacturers still have access to many different technologies that can be used to bring innovative new digital cameras to market.
At Casio we are excited about our new advanced high speed CMOS/LSI technology. I feel the new high speed technology in the EX-F1 can change the world of photography. At 60fps photographers are assured of capturing the decisive moment. Taking it a step further, photographers can even capture the moment they think they may have already missed. With EX-F1’s new “move in” Best Shot mode you can automatically capture 60 images of a subject when it enters the target viewing area. Have you ever tried to photograph a hummingbird? Probably not, since it is almost impossible. Now you can. With the camera’s 300, 600 and 1200fps video you can see things you have never seen before. Casio continues to develop technology and cameras that do things that couldn’t be done before.
I am sure others in the industry are working on equally exciting new technology. New technology is critical to avoid the maturation of the digital camera industry. It is also necessary to reverse the dramatic decline in average price points and profitability in the industry. yy
