Tuesday, May 29, 2007
The Road Ahead
With the staggering number of recent changes in the camera industry, professionals are suddenly looking at a shifting group of manufacturers who will be producing the tools of the trade
One negative about these developments: even if you're a die-hard film shooter, you may have to forget about negatives. Steve Koenig, Senior Manager of Industry Analysis for the Consumer Electronics Association (CEA), says it will become increasingly more expensive to use film. “With Nikon dropping out of the film camera arena, film shooters are going to be facing an uphill battle,” Koenig says. “Furthermore, the supplies and materials necessary to process film will become more and more expensive. Shooting film may become cost prohibitive.”
Medium-format camera makers are likely to be the hardest hit. After 47 years on the market, the Bronica camera brand disappeared in 2005. Medium-format film cameras are no longer deemed viable because of the inroads made into the professional wedding and portrait markets by digital cameras. Other medium-format camera makers appear to be struggling as well. Many professionals confess that they only shoot film when a client requires it.
One factor that could potentially have the greatest negative impact on the professional digital camera market is just beginning to appear. The amateur market, which has enjoyed explosive growth over the past several years, is beginning to cool. Household penetration is reaching market saturation, and by the end of the decade, digital camera sales are predicted to decline. Sales success in the amateur market fuels research and development in the professional segment. The professional market alone is simply too small to generate enough business for a camera manufacturer to survive.
“We estimate factory-to-dealer shipments of digital cameras will reach 26.7 million units in calendar 2006 and 27.5 million in 2007,” says Koenig. “But that will be the peak. By 2010, the annual volume will have fallen back to 23.6 million units. Digital SLR cameras and SLR-like cameras, however, will continue to grow. We aren't anticipating a decline in those categories.”
Adds Koenig, “In 2007, the best-selling amateur camera models will be the 6- to 7-megapixel range. It will stay that way until 2010. The sweet spot of the market won't follow the resolution ladder as it has in the past.”
Another analyst agrees that digital camera makers are chasing the right rabbit—the digital SLR customer. Liz Cutting, Senior Imaging Analyst for The NPD Group, feels that digital SLR camera sales will continue to grow, despite the sales decline in compact point-and-shoot models. “We see digital camera sales peaking in 2007,” she says, “with a decline setting in for 2008—overall DSC unit volumes and specifically for compact DSC. Through 2010, however, we still see growth for D-SLRs.”
That doesn't mean that the road ahead is a bed of roses for D-SLR camera manufacturers, however. “The immediate effect of behemoth electronic firms newly competing in the D-SLR space will be competitive pricing pressure in an increasingly crowded advanced amateur D-SLR market,” Cutting explains. “Where the landscape will be rockier for companies for which optics aren't a specialty is within price points over $1,500. This price band represents almost a quarter of D-SLR unit sales in 2006, nearly 100 percent belonging to Canon and Nikon.” In other words, the amateur D-SLR market will be a train wreck while a few familiar players will dominate the upper tiers.
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