The Imerge Group's new affordable industry report entitled CIS Sensors: At the Vortex of InfoImaging 2007 reports that EDoF, extended depth of field has become the winning cameraphone architecture beating out other SW autofocus technologies and Liquid Lens, (fluid lens) piezo electric solutions and OmniVision's Wavefront TrueFocus. According to Imerge's principal analyst, Ron Tussy, "the current big winner is Dblur of Israel and DxO of France, garnering module partnerships with Micron and ST Micro, two of the world's largest sensor module providers.We'll start to see EDoF in branded camera based phones in Q-4, 2007 and into 2008, but there is a big unknown factor whether users will readily adopt this new autofocus architecture, which allows the entire image to be in focus, rather than selectively focusing a foreground and background as photographers have done for the last 150 years. The workaround to this problem is allowing the user on the cameraphone to toggle fore, middle and background focus. If EDoF is not accepted and adopted enmass within two years fluidic lens/ electrowetting systems from VariOptic, IMRE, Philips and Rhevision, providing autofocus will have overcome temperature limitations and will be ready for adoption. An entire section of this 80 page report is based on new lens architectures, lens and modules and provides in-depth details and analysis regarding design wins and likely winners. The report cost is only $2000.
Imerge's new CIS 2007 affordable industry report from the The Imerge Group entitled CIS Sensors: At the Vortex of InfoImaging indicates that CMOS image sensor (CIS) vendors will ship over 3.8 billion units by 2010 and acrue more than $13 billion in revenue. The report states that a select group of CIS providers are right now in the design-in process with device vendors and are providing better over-all image quality than same-scale CCD's for consumer devices such as cameraphones, digital still cameras and digital camcoders.
According to Imerge Group principal Ron Tussy, "by Q-4, 2006 the sweet spot of 5 mega-pixel consumer still cameras will be in the range of $149 to $199 at retail from branded DSC vendors, resulting in a unit cost of about $38 to the vendor. This leaves no room whatsoever in the BOM for expensive CCD's and vendors will be forced to encorporate lower-cost CIS units into that BOM. These branded vendors would never think of doing this though, unless these new CIS's are on-par in image quality and sensitivity with CCD's, due to the potential negative effect on their brand, built over the last 80 years."
"New industry-changing architectures in CIS's are going to revolutionize market requirements in consumer products, starting in Q-4 this year and beyond and we are going to see HD (high-definition) become the new buz word in consumer image capture sectors such as cameraphone, DSC and digital video. In about two years, cameraphones will be providing HD resolution video as well as 5 MP still capture resolutions, with quality on-par or better than current DSC's with CCD's. Consumer digital still cameras will have much higher frame rates of up to 60 FPS, higher resolution and a very high dynamic range and this will also change the way consumers capture still images, pulling the precise moment in time out of numerous frames to chose from, states Tussy. "
According to the new report, these new process technologies and architectures are allowing a more open photodiode (pixel well), utilizing transistor sharing, detection amp sharing, multi-sampling and dark current and reset noise abatement methods. As a result, a select few CIS vendors are now providing increased sensitivity, higher signal-to-noise output and higher dynamic range than previously thought possible. These new architectures allow smaller pixel sizes (1.4 to 1.75 micron) resulting in smaller form-factor sensors from the same dye size without loss of sensitivity.
According to Imerge Group, in a little more than two years, CIS units will be in more than 80%-90% of consumer capture products compared to CCD's.
The report details 20 application areas that will be effected by these new sensor designs, provides WW and geo unit, ASP and revenue forecasts out to 2010 and provides a SWOT analysis of those companies positioned with industry-changing architectures and process technologies, poised to lead this revolution. The report details new sectors that will provide the mega apps for CIS and logic vendors from 2010 and beyond.
Imerge Group's Principal, Ron Tussy presenting this report's contents to institutional
investors at the Gerson Lehrman Group Institutes: TMT Summer Symposiums 2006,
N.Y. City June 27 and San Francisco, July 22nd - Sensors: At the Vortex of InfoImaging
http://www.glginstitute.com/
This 40 page presentation is available for $500 sor a single seat license. Multiple seat licenses are available upon request.Please call: 650-631-5737
Thanks to the ubiquity of digital cameras, flat-panel televisions and videogames with ever-more sophisticated graphics, Forbes.com's Infoimaging Index has outpaced the S&P 500 by 9 percentage points since its December 2002 inception.
The index, tracks the industry that's taking shape as digital imaging and information technology converge. Included are companies such as Apple Computer (nasdaq: AAPL - news - people ), Hewlett-Packard (nyse: HPQ - news - people ), Eastman Kodak (nyse: EK - news - people ), Adobe Systems (nasdaq: ADBE - news - people ) and graphics chipmaker NVIDIA (nasdaq: NVDA - news - people ).
All together, the index is a market-cap-weighted group of 58 companies that had market values of at least $50 million, sales greater than $100 million and share prices of $1 or more at the time the index was generated.
While Imerge questions the validity of some of these firms being truly Infoimaging corporations, whose core competency is actually Infoimaging, for example Cisco Systems, while others are ommited such as OmniVision - (OVTI - fabless CMOS sensors) whose valuation has risen nearly 250% since the first of the year, the message is clear. Institutional investors who ignore this sector are subject to missed opportunities.
Forbes Infoimaging Index of Companies:
AN OPEN LETTER TO ALL DIGITAL STILL CAMERA VENDORS
Encorporate MP3 Capabilities.....or Be the Device That Gets "Left Behind"
Update 6-6-06:
Study suggests
cameraphones could replace digital cameras
A new global study commissioned by handset maker Nokia aimed to find out just
how much people use the constantly-expanding functions in mobile phones. Nokia
questioned 5,500 people between the ages of 18 and 35 in 11 nations in early
2006. The study shows that 44 percent of people currently use their cameraphone
as their main camera, and 67 percent of those questioned said they expected
their phone to replace their portable music player.
The research revealed some cultural differences among those who responded, with
68 percent of those questioned in India being the most likely to use their phone
as their main camera. By contrast, 89 percent of Americans said they would stick
with two separate devices. The global average of those expecting to use just
one device was 42 percent.
The study also showed, on average, a third of people regularly browse the net
on their phone. At the same time, mobiles are taking over from more mundane
devices. For instance, 72 percent of those questioned use their phone as their
alarm clock, and 73 percent use it instead of a wristwatch.
More than 30 percent said they would rather lose their wallet or purse than
misplace their mobile. A fifth of respondents would rather lose their wedding
ring than their handset, the BBC reports.
This is a critical study for DSC providers as the rest of world is the last remaining geo left for DSC adoption. Resolution in consumer digital cameras will soon reach maximization due to economies of scale in the manufacture of sensor wafers and the fact that consumers really don’t need cameras beyond 12 mega-pixels with unwieldy file sizes. The value of current features (resolution and zoom) are quickly being commoditized as a selling point at retail and it is no secret that DSC adoption into the masses has slowed considerable down to about a 5% - 10% or less year-on-year growth rate in North America, Asia and Europe. The reason for this is simple. Digital still cameras are intrinsically tied to the installed base of Internet enabled PC’s and will continue to be unless drastic measures are taken.
Market requirements for what was once known as “cameraphones” has changed drastically within the past year and this will be very evident. Within the next two years, mobile phones will be known more as “mobile communication and entertainment devices”, or MM phones. As a result, camera functionality on entertainment phones will move down to third spot as a market requirement from 2nd. The phone as a communications device (voice and MMS) will always be #1, but music and digital books (MP3) playing and storage will move into the 2nd most required feature. Video capabilities will become the fourth requirement and digital radio and TV are on the horizon.
Why are these new media phones so sexy, so fun for consumers where digital still cameras aren’t? The reason is also simple. They are a platform that doesn’t have to mimic previous analog usage paradigms for adoption. They simply evolve into the existing installed base of mobile phone users, not having to create a new category and the installed base is 40 times larger than DSC's. They are wireless and Digital Specific. They can offer features only a digital device can provide and not be so encumbered with pre-existing usage models as DSC's. Conversely, digital still cameras have been relegated to being regarded as the “workhorse” of capture devices, used for only the most mission critical family or social circumstances. The perception of the DSC has become an “all work and no play” device to consumers.
For the last 11 years, digital camera providers have been so focused on getting cameras to a point where they can mimic film cameras from atechnical standpoint without sacrificing equivalent image quality as film, camera providers have forgotten the “digital specific aspects” of digital cameras, the digital features that will allow a camera to go well beyond film cameras in functionality, quality and ease-of-use.
So what can digital still camera vendors do to help drive adoption further upward and put some of the entertainment value back into picture taking. Here’s a list of five action items Imerge believes DSC vendors should provide to move digital cameras back into the revolutionary mode and away from the old paradigms that are currently constraining growth:
1. Support other digital media such as MP3 playback and other functionalities!
The DSC camera is a storage device along with being an image capture device.
It has a processor/co-processor that can be used beyond pre and post capture
functions. Now that the cost of Flash memory has become so affordable, (a 2
Gb card costs less than $100) there is no compelling reason why a digital camera
should not function as an MP3 player for example. Flash memory as a platform
unto itself is used ubiquitously across all platforms. DSCs should at least
support MP3 storage and playback.
Consumers have many options now regarding the devices they take with them whether
it be a MM phone or digital audio MP3 player. If all DSC vendors do not wake
up, smell the coffee and encorporate digital audio, when a consumer chooses
which device to take in his/her pocket, DSCs will be the device that gets left
behind. There is no question on that. Besides, music and photography have always
worked symbiotically well together. This is a marriage made in heaven. I’ve
always felt music gets the creativity juices going and I'd love to hear music
of my choice when shooting anything other than people.
2. Build wireless capabilities into cameras such as Ultra-Wideband. Casio was the first to try a wireless DSC but was way ahead of their time. Nikon and Kodak currently are the only vendors willing to show some risk. If both those brands put some marketing muscle into this feature, build a community of users who can share amongst the brand, this will pay off for them as early leaders in this new wireless distribution paradigm. If they treat it as just another feature, it most likely will fail until the industry reaches critical mass where all vendors are providing wireless capabilities years from now. In the mean time, entertainment phones are gaining resolution, features and converts, and are cutting into the mind share of consumers who would normally purchase a DSC as the survey shows. Further, UWB could enhance the print opportunity due to the “distribution factor” of one image being seen by many users.
3. Enhance the user’s creativity: There is no reason why digital cameras
should not make us all better photographers over a film camera. It is high time
DSC vendors started thinking of this as a digital device and not just a replacement
for a film camera. Digital Specific attributes could be built into the camera’s
functionality such as “digital selective focus” where only a portion
of the image is designated by the user to be in focus by integration of a touch
screen and stylus. Another would be in-camera digital filtration on selective
parts of the image using this same method. Another attribute could provide a
rating system on all the images stored by using scene recognition algorithms
where the camera would “rate” your own photography. Then there’s
the combination of GPS and location based services that would provide specific
helpful information to take a better picture and help you find the nearest UWB
zone, or nearest minilab for printing. The sky is the limit regarding digital
features that could be built into a camera. Sure it could slightly drive up
cost on the camera, but it would also help to differentiate itself as a device
from a mobile phone and help keep ASP's from plumeting.
4. Start partnering and working more closely with print vendors, print engine
providers and kiosk providers to make the wireless hand-off of images seamless
and easy. By bypassing the PC, adoption would go up by default into the same
realm that consumer film cameras used to occupy, 98% penetration into homes.
Standardization of an in-camera to kiosk digital print order form would be a
start. One that the kiosk server would recognize, de-encrypt and one requiring
no human intervention what so ever. In this wireless world, PictBridge is not
enough.
5. Build on-board capabilities to instantly “resolution down” to
a reasonable size those images that are to be wirelessly transferred to another
device. This will drive up usage of wireless transmission from device to device
and perhaps allow more images to move downstream into print from the distribution
factor.
Ron Tussy
President & Principal
Imerge Group
A Gerson Lehrman "Leader" Advisor
Digital Specific TM is an Imerge Consulting Group trademarked term.
In 2004, the worldwide consumer digital camera market experienced enormous pricing pressure on the low-end, primarily due to camera phone adoption, effecting DSC unit sell-through which remained nearly flat from 2003 at a 26.3% growth rate, amassing $11.2B in street valued revenue. ASP’s in 2004 plummeted –19% on average across all geos. Those non-branded camera vendors providing sub $150 units suddenly found themselves in competition with branded vendors at retail selling cameras at the same price-points. Many were forced out of the market in 2004.
Contrary to another research firm’s assessment for the WW consumer DSC market, (guessing 1% year on year growth rate in 2007), Imerge Consulting Group firmly believes this sector will slowly settle between 5% and 10% growth year on year out to 2009. Even though resolution will peak and will not be a market requirement or driver out to 2007 and beyond, price, wireless transmission, improved image quality, digital filtration, location based services and digital specific attributes will provide more convenience and an enhanced value proposition and will backfill to provide an enhanced user experience. Also as a benchmark, consumer point and shoot film cameras continued to grow at a 2.0% yearly rate up until just recently, even when competing for mindshare with digital cameras.
"There is no compelling reason whatsoever to believe that consumer digital cameras will only grow at a 1% yearly rate in just two short years" states Ron Tussy, principal analyst at Imerge. "Only 35% to 40% of US households have been penetrated and soon printer docking stations and wireless transmission, (BlueTooth, 802.11 G, Wifi and WiMAX) will allow direct connection to printers, kiosks, digital minilabs, hotspots and other capture devices, circumventing any need for a PC. All these attributes will eventually drive adoption up to the same 98% level of penetration of film cameras into US homes. For other geos such as China, Eastern Europe and ROW, adoption has barely become a mass market opportunity. "
The North American consumer DSC market continued its downward spiral with unit growth rates plummeting to 16.3% year on year and ASP’s dropping –20%, accruing just over $4 billion in street revenue. What has slowed down adoption in North America the last two years is the lack of value proposition to consumers who want to conveniently move their non-disposable images downstream into prints for long-term archiving and it is print archiving, not technology that will be the long-term medium for preserving treasured memories of families and friends. Consumers have long ago lost confidence that any technology will be around as it exists 30 years from now, but have confidence that their prints, if properly preserved will.
It is also abundantly clear that multi-media phones, (providing still capture, MP3, audio, MM messaging, video and video conferencing capabilities as of 2005) are going to fulfill the low-end of adoption as an image capture platform, in-fact displacing single-use film cameras worldwide.
The worldwide consumer digital camera market is growing in stops and starts akin to plateaus of adoption rather than the smooth bell curve of adoption we have seen with other sectors of consumer products. These adoption plateaus are driven by previous and existing usage paradigms and the consumer digital market is so closely mimicking the film camera market, it is becoming evolutionary rather than revolutionary. For example, by 2005 most of analog minilabs will be 7+ years old and will be reaching their end-of-life. At that point, mass retailers will be forced to adopt digital minilabs by default and this and wireless transmission will be the final technology adoption hurdle to mass adoption of consumer digital cameras worldwide.
Most point and shoot DSCs continued with 6 – 9 month design-cycles with most branded vendors. Asia Pacific (38.5%) surpassed North America (35%) as the dominate region in 2004. By 2009, Mainland China consumers will dominate Asia Pacific accounting for 48% of the world’s DSC sales and N.A. accounting for 23% with the WW installed base of DSCs expected to reach 231 M units.
Innovation discussed in this report includes microelectronics and micro-camera designs, new sensor technologies, 802.11 G, WiMAX, WiFi, camera phone effect on DSCs, advanced lens architectures, flash memory technologies, new sensor designs, digital kiosks and digital minilabs, embedded TV photo viewers, OLED screens, 4/3 lens designs, DSLRs, micro-electronics, quad transistors and much more.
This report also provides analysis on the worldwide consumer digital camera market and it’s dynamic, including 2004-2009 forecast units, (actual and forecast) ASV, (actual and forecast) street value, (actual and forecast) top 10 market share, channel dynamics, and segmentation, installed base and adoption dynamics.
For North America this report provides analysis on the North America market
and it’s dynamic, 2004-2009 forecast units, (actual and forecast) ASV,
(actual and forecast) street value, (actual and forecast) top 10 market share,
channel dynamics, and segmentation and adoption dynamics. The Worldwide Consumer
Digital Camera Forecast and Market Overview, 2004-2009 also includes Asia Pacific
(Japan included), Europe and ROW 2004-2009 units, (actual and forecast) ASV,
(actual and forecast) street value, (actual and forecast).
Imerge's new Worldwide Consumer Digital Camera Forecast and Market Overview,
2004 to 2009 is now available. See our home page www.imergeconsulting.com for
report details and pricing or call 650-631-5737 or email tussy@ix.netcom.com.
In Q-4, 2004 Ampex (traded OTCBB symbol AEXCA.OB) racked up a windfall $65 million from settling patent infringement and licensing agreements regarding thumbnail image display in digital capture devices with Sony Corp., Canon Inc. and Sanyo Electric Co. In 2003, Sanyo manufactured close to 60% of the world’s digital still cameras for vendors such as Nikon, Olympus and many others. Next on the list according to Ampex is Eastman Kodak and a host of other imaging vendors. Ampex is currently attempting to pay off a large dept load related to retirement pensions. "For the next five years, they're looking at $86 to $90 million in unfunded pension liability, from 2009 through 2013, another $91.7 million" comments JM Dutton & Associates analyst Richard West.
According to company sources, Ampex will announce several additional licensing agreements with digital camera and camera-cell phone makers in the next 90 days, which certain analysts with potential conflicting motives to talk up this stock say could net tens of millions more. "They opened up a vein, and it's a gold mine," said JM Dutton & Associates analyst Richard West. Ampex "could have another huge settlement" said West, who estimated that worldwide digital camera phone sales will total $45 billion in 2005. "Sony, Canon and Sanyo have 45 percent of that market. Eastman Kodak, who (Ampex is) talking to, has 20 percent." And, West noted, Ampex is negotiating with nearly all the other players. Not surprisingly, JM Dutton & Associates have rated Ampex as a “strong buy”.
We say, beware of the good sound bite and to JM Dutton & Associates and Mr. West, we question your assertions. Kodak has about 20% DSC market share….. but only in the US! Kodak is barely a brand in Japan, which is >30% of the WW market for DSC’s. Kodak is doing very well in Europe, but in its infant stages of adoption as a brand in China. Also, Mr. West needs to recalculate his numbers regarding the camera phone industry which will most likely ship more than 50M phones WW in 2005, but the vast majority will be low-end VGA phones, some having a street value of only $29. Imerge’s estimates place the total burgeoning camera phone street value at between $6 and $8 billion for 2005, not $45B. It has a long way to go before it is truly a mass market opportunity and mass adoption as a platform is still in question in many geographies such as North America.
In July 2004, Ampex filed complaints with the International Trade Commission and a federal district court, asking them to stop the sale and import of Sony digital still cameras because of alleged violations of Ampex patent regarding creating thumbnails on digital capture devices. Less than four months later, Sony agreed to pay $40 million to use Ampex patents to manufacture and sell digital tape recorders, cameras and other products through April 2006.
Imerge Consulting Group believes that Ampex’ best days are behind it regarding it’s ability to accrue large revenues from licensing and past infringement. Case in point is Forgent Networks who claimed to own the codec in which the JPEG format was built upon in 2001. In the last three years Forgent has generated over $100 million in revenues from the licensing of its patent to 35 imaging companies but recently, the well has dried up for Forgent which has provided a roadmap to Ampex regarding IP enforcement.
In 2001, Forgent’s attorneys, Robins, Kaplan, Miller & Ciresi were incentivised by their ability to accrue 55% of all settlement revenue and initially went after Sony first as the top tier of low hanging fruit, not because Sony had the lions share of the market, but because Sony has a history of rolling over rather than fighting protracted lawsuits and paid Forgent $25 million to make Forgent's claims go away. Next Forgent went after Sanyo, then Canon, then HP, then Kodak and currently is still going after the second and third tier of vendors which may put up a fight to Forgent. It is interesting to note that Forgent’s attorneys did not target the largest potential violator, Microsoft which has an enormous war chest of litigation funds available and posed a threat to Forgent and its third party attorneys. Ampex already has acquired the low-hanging fruit with Sanyo’s, Canon’s and Sony’s settlement revenues in Q-4, 2004.
Not surprisingly, Forgent’s stock value went from a high of around $11 right after announcing settlements with Sony in 2001 to its current value of $1.81. Also not surprisingly, JM Dutton & Associates Richard West also currently places a strong buy rating on Forgent claiming it will soar to $5 a share soon.
Imerge strongly disagrees with JM Dutton & Associates and Mr. West's assertions because there is an existing model (Forgent) of early windfall leading to a fall-off, which is already built into Ampex' valuation leading to lesser potential revenue from lesser vendors. Also there is the fact that Ampex and their analysts JM Dutton & Associates are betting that Kodak's revenue stream from licensing to Ampex will be more substantial that what it could possibly be, along with the assumption that future camera phone vendors will devise a workaround rather than pay enormous fees, Imerge asserts that Ampex should not be a "strong buy". Ampex will accrue more revenue, and is probably a near term "buy" but the real meat of this windfall has already been realized and built into Ampex's valuation.
An update:
On January 24th, 2005, Ampex announced it will license its digital still camera
patents to Matsushita, Pentax and JVC. Ampex Corp.has concluded license agreements
with these three manufacturers of digital still cameras based in Japan: Pentax
Corp., Matsushita Electric Industrial Co. Ltd., which markets to consumers under
the Panasonic and other brands, and Victor Co. of Japan Ltd. which markets under
the JVC brand.
The agreements permit the use of several United States and foreign patents held
by Ampex in the manufacture and sale of digital still cameras. The licenses
provide that their terms are confidential. Ampex will receive, during its first
fiscal quarter, negotiated payments totaling approximately $5.5 million to settle
liability for past use of its patents prior to conclusion of the agreements.
The licensees will also pay to Ampex quarterly running royalties in the future
based on the sales value of digital still cameras that utilize its patents.
Just as we predicted, Ampex's stock dropped 2.85% the day after this announcement on a day the DOW climbed 0.90% and NASDAQ climbed 0.56%. We expect further insignificant announcements in the future from Ampex.
Ron Tussy
Principal Analyst
Imerge Consulting Group
On August 7th a known research firm announced their estimates of North America “unit” market share for the consumer digital camera sector. The next day AP’s business writer, Ben Dobbin penned a headline and article stating ”Kodak Gains Ground on Front-Runner Sony in Burgeoning U.S. Consumer Digital Camera Market.”
Dobbin went on to quote the research firms estimates for “unit” share as frontrunner Sony loosing “unit” share to Kodak, going down to 21.5% and Kodak jumping up 3 points to 18.3%. The article quoted the research firm as putting other brand titans such as Canon at a lowly 14.7% unit share so far for 2004 and Olympus falling back to 11.8%. Fujifilm was at 8.7%, HP at 7% and Nikon at 5.7%.
For the record, Imerge Consulting Group puts the North American unit market share as of August 2004 as follows: Sony 20.5%, Canon 18%, Kodak 17%, Olympus 12.5%, Fujifilm 8%, Nikon 7%, HP 6% and all other 65+ North America vendors at 2% or less. When considering revenue share, Kodak drops down to about HP’s level of share for DSC’s.
At face value, this may seem like great news for Kodak. The only problem with this unit share good news for Kodak is that it only reflects unit share, not revenue share.
This analyst will concede that Kodak, with an average ASP of only $227 across their consumer DSC product line (excluding digital SLRs) has the ability to sell a lot of cheap, sub $129 consumer digital cameras to first-time buyers in the North American. That may seem like a good thing to many but is it, compared to Canon who’s ASP across their line is currently at $364? That’s a 37.6% difference in ASP and it translates to higher margins and more profitability for Canon and other branded vendors. I would also wager that the majority of Kodak’s 2% unit market share gain in North America has been with sub $179 digital cameras. Why does this matter?
Kodak still has to purchase each camera from their manufacturer Chinon in Japan, (Kodak owns 49% of Chinon – maximum amount by Japanese law) and Chinon has to outsource nearly every major component in Kodak’s cameras, lens, sensor, LCD, microprocessor except the chasis and body. On a camera introduced at $149 (retail), Kodak must pay Chinon about $49 to manufacture the camera, excluding costs for tooling, which can run from $50K - $250K per model. By the time operational cost of goods per product are factored in by Kodak, along with the channel’s cut and manufacturing cost, Kodak could make less than $1.00 per camera and on $79 to $129 cameras, the situation gets even worse regarding profitability to most vendors, including Kodak and in many cases is a negative business model per camera unit.
So why would Kodak care if their unit share goes up 2 points but has no effect whatsoever on their revenue share, in fact a possible negative effect? All of Kodak's cameras are positioned to need an optional docking station. Kodak is hoping their unit share gain will also turn into a one-to-one connect rate of camera unit sales to docking stations because Kodak’s cost for these stations is about $5 per unit and they sell on average for about $79 at retail, about an 80% margin per unit for Kodak, a back-ended profitable model for Kodak - if it works. And that's what Kodak's ads are all about....driving up this connect rate.
Every camera vendor’s business should be assessed across their entire product line based on the ASP and margin they can accrue. So let’s keep Kodak’s modest unit share gain on the extreme low-end in perspective. Kodak may be gaining a couple of points of share, but that does not necessarily translate into higher margins across the product line, in fact to gain that unit share Kodak must sacrifice ASP and profit margins across the line.
Worldwide
Digital SLR Camera Forecast Reports 172% Unit Growth in 2003 - According to
Research Firm, Imerge Consulting Group
Belmont, CALIFORNIA – January 7, 2004, A new imaging industry report by
Imerge Consulting Group maintains that while ASP’s were plummeted in the
low-end of the consumer digital camera market in 2003, quite the opposite was
occurring in the digital single-lens reflex camera sector. Not since 1999 has
a sector of the digital camera market experienced triple-digit growth like the
DSLR camera market, expanding 172% year on year in 2003.
"Our new report shows that in 2003, worldwide unit growth for digital single-lens reflex cameras exceeded 765,000 units, as ASP's dropped -31% associated primarily with worldwide sales of new DSLR products such as Canon's Digital Rebel, Nikon's D100 and the Olympus E-1 System. The elasticity model for vendors works well in this sector as street revenue jumped 88% even with this sudden ASP decline. Revenue for this sector is expected to be more than $1.5 billion USD in street valued revenue in 2003, and is further forecast to reach $11.8 billion by 2008," according to Ron Tussy, Imerge Consulting Group’s Principal Analyst.
"We agree with the findings of this report that the digital single lens reflex market is growing exponentially and will continue high growth into the future due to new price/performance benchmarks and the value proposition to prosumers and professionals as seen in our new E-1 DSLR camera system," says John Knaur, Sr. Marketing Manager of Olympus America, Inc.
According to Tussy, "The North American digital single reflex camera market also experienced a high growth rate of 165% year-on-year, accruing more than $580 million in street valued revenue. Due to the lag of product availability from Japan for Canon's Digital Rebel, and early growth in the year of Nikon's D100, 2004 is also expected to be a banner year for DSLR cameras in North America. The North American market for digital single lens reflex (DSLR) cameras regionally will account for approximately 38% of the worldwide market starting in 2004. More models from Olympus built around the E-1 system and Canon’s Digital Rebel are expected as well as pro-caliber offerings Pentax and Minolta in 2004."
The report states that traditional camera vendors, with their experience and proprietary intellectual property ownership regarding lens design, DSLR camera ergonomics and brand recognition left over from film SLR cameras have driven this sector into being one of the only high-margin profit centers in the digital camera franchise.
According to Imerge’s report, it's evident that it is more than price that is driving avid enthusiasts otherwise known as prosumers to this sector. "There is a growing worldwide segment of individuals that honed their skills with camera models such as Canon's film Rebel SLR and other film SLR models from Nikon, Olympus and Pentax since the 1970's, and these photo enthusiasts view digital photography as empowering them to have more control over their picture taking. They want cameras that don't have inherent shutter lag issues, the highest image quality they can afford, interchangeable lens that don't require a major re-investment and the look and feel of a camera that has substance and ergonomics to it. On top of that, the ROI and savings for these avid enthusiasts averages a little over one year or 40 rolls of film when counting savings from film purchases and film processing costs" states analyst Tussy.
According to the report, the sweet spot of the market for these new camera systems is targeted to the lower-end of pro users, advanced amateurs or prosumers, those consumers seeking luxe populi and the low-end of certain sectors of the professional market. Also professional photographers in regions outside of North America use these lower-end DSLR cameras as professional cameras for studio portraiture and photo-journalism.
Imerge Consulting Group's New Reports
3G, WiFi and WiMAX: Connectivity of the Future for MultiMedia Handsets, Digital Capture Devices, Game Consoles and Smart Phones and the Effect on Imaging and Music Industries, 2005 - 2010 The first report of this kind available anywhere, an Imerge Consulting Group special report and forecast regarding multimedia phones, wireless connectivity and removable flash memory and the impact on Internet portals/datacenters, retail and the gaming and music industries. Featuring interviews with top execs at HP, Sandisk, Motorola, Verison, CVS, Nokia, Apple, Sprint, Micron, Samsung, TouchPoint, Yahoo!, M Systems, Kodak, Shutterfly, MicroSoft and many others.
CMOS and CCD Imaging Sensors for Camera Phones, Digital Cameras and Digital Devices, A Worldwide Forecast and Market Overview, 2004 - 2009 - a breakthrough, one-of-a-kind report detailing regional segmentation and market requirements for Japan, China, Korea, N.A. and Europe regarding camera phones and DSC's, providing regional forecasts and fab and fabless sensor vendor SWOT analysis
Future Flash - Memory for Digital Cameras, Camera Phones and Consumer Digital Devices, A 2004 - 2009 Forecast and Market Overview - a future market outlook and forecast by WW regions and dynamics of flash memory and their relationship to future digital capture devices, print fulfillment at retail and future "smart flash memory"
The Imerge Consulting Group Worldwide Consumer Digital Camera Forecast and Market Overview, 2004-2009 - considered by many the industry Bible - the most comprehensive digital camera report in the industry, used by many top tier vendors for product planning and forecasting- all data gathered by interviews and surveys
The Imerge Consulting Group Worldwide Digital SLR Camera Forecast and Market Overview, 2004-2009 - New Digital SLR "systems" have reached a price/performance quotient that allows penetration into the majority of applicable pro and prosumer segments. This report is an industry first and provides analysis of this segment and the franchise of products surrounding its periphery including the aftermarket lens opportunities derived from digital SLR sales- all data gathered by interviews and surveys.
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