August 4, 2005 5:16 PM PDT

Digital-camera growth has peaked, study says

While digital-camera sales continue to grow at rates most industries would love to see, the numbers haven't kept up with the torrid pace of a year ago, a new report says.

According to Framingham, Mass.-based research firm IDC, 9.7 million digital cameras were sold in the United States in the first half of 2005, a healthy 20 percent more than were sold during the same period last year. But according to IDC senior analyst Christopher Chute, the segment's growth in 2005 pales in comparison to the 50 percent growth during the first half of 2004.

Chute attributes the numbers to an expected industry slowdown.

"The growth slowdown in the market (is) indicative of the general maturity IDC has forecasted for the digital-camera market," Chute wrote in a summary to his report. But "the industry is on track to meet IDC's U.S. forecast of 16 percent growth to 27 million units."

To Jay Savage, editor of the Weblogsinc-owned digital-photography trends site Digital Photography Weblog, Chute's findings omit a critical piece of the overall puzzle that may explain the smaller growth numbers.

"The other thing, of course, is the tremendous sales of cell phones with digital cameras built in," Savage said. "Those are definitely digital-camera sales that need to be taken into account, because it's a way that people are getting digital cameras into their hands. When you take all those numbers and put together, I'm sure you'd see a much greater expansion than what IDC's numbers are showing."

Meanwhile, Chute reported that Kodak currently is the top dog in the U.S. digital-camera market, with sales of 2.15 million units in the first half of 2005 and a 22.1 percent market share. Next up is Canon, with sales of 2 million units and market share of 20.6 percent. Sony is third, with 1.78 million digital cameras sold and 18.3 percent of the market.

"A 10-point difference then separates the top three from the rest of the vendors," Chute wrote.

But while Kodak leads the market, IDC's numbers reveal that Canon could easily take the top spot soon. That, Chute reported, is because Canon's sales were up 68.7 percent during the first half of 2005 over the same period in 2004, compared to Kodak's growth of 46.3 percent.

In any case, Savage said IDC's numbers don't necessarily prove the market is stabilizing, though he does think huge growth at the low-end may be over. However, he said there's no way as of yet to know how the huge sales of disposable digital cameras are affecting the market for more traditional equipment.

 

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