Digital camera sales to peak

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Sales of digital cameras are expected to peak in the US this year, forcing camera makers to focus more on emerging markets and ways of making money from after-sales services such as the storing, sharing and printing of pictures.

After the double-digit growth of recent years, shipments of such cameras in North America will rise by about 7 per cent, from 25m-26m last year to 28m this year. They will then remain at that level to 2010, according to InfoTrends, a US technology research firm.

Japan’s digital market peaked in 2004 at 8m units shipped and western Europe is expected to flatten next year. Growth in Latin America will continue but is a small part of the global market. However, worldwide digital camera shipments will continue to grow at a compound annual rate of 6 per cent to 104m units by 2010, pushed by demand in newer markets such as eastern Europe, China, India and Korea. Shipments in emerging Asian markets are expected to triple.

The slowdown in the big digital camera markets has forced smaller companies to fold and bigger ones to scale back production. Kyocera/Yashica last year closed its digital camera operations while Konica Minolta left the Canadian market. Bigger manufacturers such as Sony and Olympus have cut production and reduced their workforces because of tapering demand.

Ed Lee, analyst at InfoTrends, said there was still growth in demand for higher-margin, digital SLR (single lens reflex) cameras with removable lenses, but less so for cheaper point-and-shoot models. Much of the recent focus of digital photography had been on taking pictures and printing them, but companies must develop ways to make money from images after they had been captured, Mr Lee said.

“Storage and management are areas to still tap into,” he said. “People aren’t yet willing to pay for storage or management software but they will eventually need tools and services.”

He said digital images contained data that tagged the time and place the image was captured. Such information could be a source of revenue.

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