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Fading away

Film is rapidly following flashbulbs into obscurity as digital cameras' popularity rises and prices fall.

By DAVE GUSSOW
Published February 26, 2005

ORLANDO - It's number crunching time for digital cameras.

From the top to the bottom of the line, consumers will spend less for more powerful cameras as intense competition has manufacturers cramming more features into ever-smaller and less expensive cameras.

Canon, which two years ago broke the $1,000 threshold for a consumer digital SLR (single lens reflex) camera, is squeezing the high end. It is cutting the price of the original Digital Rebel to $799 and introducing the Rebel XT at $999 with a higher resolution and more features.

At the low end for point-and-shoot cameras, Concord Camera of Hollywood, Fla., is coming out with a 5-megapixel (resolution) model for $99, and Kodak has an EasyShare model with 3.2 megapixels for $99. Nikon increased the resolutions for its entry-level cameras, including one with 7 megapixels for $379.

Film was almost forgotten at this week's Photo Marketing Association International trade show, as the transformation to digital photography has accelerated. The numbers over the past two years tell the story:

In 2003, digital cameras first outsold film cameras. Last year, digital had a 3-1 advantage, according to the trade group's figures, and this year it is projected to grow to a 4-1 margin.

The price per megapixel dropped from an average of $119 in 2003 to $82 last year. Cameras with 6 or more megapixels made up 3 percent of sales in 2003, and rose to 8 percent last year, largely on the popularity of digital SLR models.

While 3- and 4-megapixel models, which have been the sweet spot for resolution, had 43 percent market share in 2003, that dropped to 36 percent last year as more people bought higher-resolution cameras.

Chris Chute, an analyst with the IDC research firm, says prices will continue to come down. Eventually, Chute says, they may level off at about $500 for digital SLR models and $100 to $300 for the bulk of point and shoot cameras.

The cost of retail printing went down, from an average of 38 cents at the beginning of 2003 to 27 cents at the end of 2004. The number of digital prints increased, though the industry has not fully recovered from the printing slump caused by the digital transition.

The number of U.S. households with a digital still camera has gone from 7.9 percent in 2000 to 41 percent last year. This year, it's projected to grow to 52 percent and by 2008 it is expected to be about 70 percent.

"It can't continue growing as robust as it has," said Gary Pageau, group executive for content development and strategic initiatives for the trade association.

But even as the market matures, the industry expects people will have more than one camera in a household, and older cameras will become hand-me-downs.

Film continued a fast fade. While sales of single-use cameras remained strong, film sales have dropped from a peak of 800-million rolls in 1999 to an estimated 438-million last year. And this year, the trade group projects, sales will fall to 315-million rolls.

"It's still a very good technology for a segment," Pageau said, and it won't disappear.

In another sign of the fast-evolving nature of the digital camera market, the show had a section devoted to mobile imaging. And, for the first time, a phone company executive was part of a panel looking at the industry's future, in particular the role of camera phones.

Suddenly, the industry doesn't have to rely on the obscure "wireless data" description to get people to understand cell phone capabilities, says Jeff Hallock, Sprint's vice president of product marketing and strategy. A picture really is worth a thousand words.

Last year, Sprint customers shared 300-million photos, he says. Sprint can use that as a foundation to push other services, from games to video on the handset.

"It's an opportunity for us to give (customers) more value," Hallock said, noting that the first camera phone two years ago sold for about $350. Now, models can be had for as little as $29.

At the show, Sprint announced deals with Epson for customers to print phone photos and with Sanyo for a multimedia phone for music, photos, video - and phone calls.

"Any time there's a shutter to press, there's an opportunity to make a print," said Andy LaGuardia, a spokesman for Fuji.

Dave Gussow can be reached at 727 771-4328 or gussow@sptimes.com

[Last modified February 26, 2005, 01:14:15]