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 research firm IDC, 9.7 million digital cameras were sold in the US in the first half of 2005, a healthy 20 per cent 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 per cent 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 US forecast of 16 per cent 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 mobile 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 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 US digital-camera market, with sales of 2.15 million units in the first half of 2005 and a 22.1 per cent market share. Next up is Canon, with sales of 2 million units and market share of 20.6 per cent. Sony is third, with 1.78 million digital cameras sold and 18.3 per cent 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 by 68.7 per cent during the first half of 2005 over the same period in 2004, compared to Kodak's growth of 46.3 per cent.

In any case, Savage said IDC's numbers don't necessarily prove the market is stabilising, 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.