With next generation digital cameras starting to hit the shelves, analysts are predicting mainstream adoption of digital photography -- if the price is right.
The new 3-megapixel units, which boast 35-mm quality stills, let users blow up details of smaller sections of a digital image. Some next-generation digital cameras -- Canon's US$799 Powershot S20 and Nikon's US$999 CoolPix 990 -- are already on the market. Olympus has announced that its US$999 C-3030 ZOOM US$999 will be available in May.
However, according to IDC analyst Ron Glaz, consumers won't just zoom in on better image quality. "While improved picture quality will help drive users adoption, ultimately price will be the dominant factor," Glaz said.
The new 3-megapixel units are expected to drive down prices of older digital cameras. With 3-megapixel cameras retailing for an expected US$700-US$1,000, prices for 2-megapixel units should fall to the US$500-US$700 price range. And 1-megapixel units will be available for between US$200 and US$500.
Increased market penetration
Market penetration of digital cameras has been on the rise since 1999, when they posted 202 percent growth (3.1 million units shipped) over 1998 (1 million units shipped). The digital camera industry expects that, thanks to the coming price drop in 2-megapixel cameras, it will ship 5.1 million units this year -- a 62 percent market growth.
Alexis Gerard, president of The Future of Image Report, said picture quality for the average consumer was good enough at 2-megapixels. "From an image quality point of view, we crossed the inflection point at 2-megapixels," Gerard said. "Now users are considering price, battery life and ease of use."
Data from IDC suggests that price conscious consumers have already started making their presence felt and will continue to do so in 2000. In 1999, sub-US$200 units accounted for 30 percent of the 3.1 million units shipped. In 2000, sub-US$200 units will also account for 30 percent of the 5.1 million projected units.
The sub-US$200 digital camera represents the entry level and is used by adopters that just want to download images onto their PC. Manufacturers covet the sub-US$200 market because it will ultimately help to grow the market as younger users grow up and buy better quality cameras.
