Camera Phones Prove Popular

Mobile phones with embedded cameras outsold conventional digital cameras for the first time in the first half of 2003, signaling a turning point in the wireless industry's efforts to carve out a piece of the booming digital photography market, according to new market research.

Worldwide sales of mobile phones with built-in cameras soared to 25 million units in the first six months of this year, compared with 20 million conventional digital cameras in the same time frame, Neil Mawston, an analyst with Strategy Analytics, said Monday, citing new market data.

In the first half of 2002, mobile phone operators worldwide shipped 4 million phones with integrated digital cameras, according to the analyst.

Supply and Demand

The surge in demand comes primarily from Japan, Mawston said. The country accounted for six of 10 camera phones sold globally in the first six months of this year.

"Japanese consumers are really eager to buy and test new consumer electronic products," he said. "In addition, local operators such as NTT DoCoMo are heavily subsidizing handsets, which isn't the case with digital cameras."

Camera phones sales in Europe and the U.S. will "continue to grow but not nearly at the same rate as Japan," Mawston said. "Japan is going to drive this market for some time to come."

Displacing Disposables?

While camera phones don't pose an immediate threat to high-end digital cameras, offering resolution levels of 3 megapixels and higher, they will capture a chunk of the lower-end disposable camera market, Mawston said.

"Consumers will still want to have a high-quality digital camera to take high-quality photos but for quick shots, many of them will be inclined to use camera phones, which they'll carry around most of the time," he said.

Japan's NEC and Matsushita Electric Industrial (which uses the Panasonic brand name) each accounted for 15 percent of the global camera phone market in the first half of this year, followed by Finland's Nokia with 14 percent.

Each vendor is eager to expand its market share but could face some challenges moving ahead.

In recent months, numerous groups and companies have raised concerns about camera phones invading privacy or breaching security, resulting in usage being banned in some public places and workplaces.