Growth slows for digital cameras

Global growth in digital camera sales slowed substantially last year, and it is expected to remain comparatively modest in coming years, according to a report released Friday by market research firm IDC.

Worldwide shipments of digital cameras in 2001 grew 22 percent year over year, to 18.4 million units, according to the report. Revenue totaled $8 billion.

While such growth seems substantial compared with troubled markets such a PCs, it's a dramatic downshift from previous annual growth rates of around 100 percent, said IDC analyst Chris Chute.

Chute said the slowdown is due partly to the size of the digital camera market. But he also pointed to larger market conditions likely to constrain growth in the near future.

Ancillary digital-imaging services, such as in-store kiosks that allow camera owners to easily make prints of their images, are still in their infancy, Chute said. Until such services become widespread, digital cameras will only appeal to a technologically literate portion of the public.

"We believe unit shipments will drop rapidly four or five years out if the equipment you need to allow digital camera owners to use the devices as easily as film cameras...isn't out there," Chute said. "You're still just going to be (referred to) the person who understands PC technology...In the U.S., that leaves out almost half the households."

Chute said photography companies are scrambling to popularize printing kiosks and other digital-imaging services, but photo-finishing shops and other retailers have remained cautious.

"The business model for a digital imaging infrastructure is still theoretical," he said, "so convincing the retail guys to invest in a $100,000 mini-lab is kind of a hard sell."

IDC predicts annual shipments of digital cameras will hit 41 million units in 2006, with growth flattening out toward the end of the 5-year period.

Sony was the leading camera maker for 2001, grabbing the top spot from Olympus with market share of 22 percent. Olympus fell to second place with 19 percent of the market, followed by Fuji with 16 percent and Canon with 12 percent.