Digital Camera Sales Skyrocket

U.S. consumers are buying significantly more digital cameras this year than in previous years, despite their lack of specific product knowledge. Digital camera vendors shipped over 3.5 million units in the first half of 2002, up 50 percent from the same period last year, according to a new report from market researcher IDC.

The average digital camera buyer "doesn't really know what to look for," in terms of features or specifications, says Chris Chute, senior analyst at IDC, based in Framingham, Massachusetts. "They are generally concerned with price and the recommendations of friends" over any specific features or options when making a purchasing decision, he says.

But vendors are not flooding the market with low-cost cameras to compete solely on price, Chute says. Instead, they're offering more features at a competitive price point, between $199 and $399 on average, he says.

Sony in Control

Sony led the U.S. market in terms of shipments with 25 percent in the second quarter. Olympus Optical trailed with 16 percent, and Canon had 12 percent of second-quarter shipments. This was the first time Canon had broken into the top five, which was driven by sales of its Digital ELPH S200 camera, IDC says.

Canon priced that camera within IDC's competitive pricing range of $199 to $399 for the first time, IDC says. Eastman Kodak and Fuji Photo Film rounded out the top five with 11 percent of the market each.

For the first half of the year, Sony and Olympus led the pack, with Kodak in third place.

Part of the reason Sony shipped the most digital cameras is its strength in the retail consumer electronics market. Consumers visit stores operated by Best Buy or Circuit City Stores, where other Sony products are prominently displayed, and are drawn to Sony's digital camera technology, Chute says.

Still Going Strong?

IDC expects the strong growth to continue through the end of the year, especially centered around the holiday buying season at the close of the year. Prices will further decrease during that time, as 40 percent of all digital camera shipments come in the fourth quarter, IDC says.

"Digital cameras have been growing at a pretty good clip for a while, but this is a PC technology, and you're going to hit a wall at some point," says Chute. When as many U.S. households have digital cameras as households that have PCs, digital camera vendors will need to find ways to make the technology less dependent on PCs, he says, since most users have to use PCs to view and send the images.

About 20 percent of U.S. households will have digital cameras, far below the 60 percent of households that have PCs, Chute says. This translates into about 20 million cameras that will be in use by the end of the year, he says.

The U.S currently makes up about 40 percent of the worldwide market for digital camera shipments, with Japan close behind, but the Japanese market is more saturated in terms of households with digital cameras, Chute says.

IDC is a division of International Data Group, the parent company of IDG News Service.