Camera Phones Snap Up Sales

As embedded cameras continue to make a splash with mobile phone buyers, handset makers that have arrived late in the game may lose market share in the short term, according to analysts.

"Camera phones are going to be very important in the fourth quarter of this year and carriers are planning a big push," said Neil Mawston, senior analyst with Strategy Analytics in the United Kingdom.

According to Strategy Analytics, sales of camera phones outpaced sales of digital cameras in the first half of this year, with 25 million camera phones shipped worldwide compared to the shipment of 20 million digital cameras.

Furthermore, American Technology Research predicted this week that camera phones would continue to outsell independent digital cameras "permanently."

The popularity of phones with embedded digital cameras represents a boon for vendors such as NEC, Panasonic, and Nokia, according to Mawston, while handset makers such as LG Electronics and Motorola are dragging slightly behind.

Look at What's Developing

Motorola is planning to ship its V300, V500 and V600 clam-shell camera phones to the United States near the end of November in preparation for the holiday season, a Motorola spokeswoman said Friday. It was unclear, however, whether that would give carriers enough time to market the phones for the holiday rush.

"Motorola is being quite sluggish," Mawston said, noting the fourth-quarter holiday season is one of the most important in terms of sales volume.

However, Motorola spokeswoman Una Kent said Friday that the V300, V500, and V600 are one of their most exciting product lines and that they are "working with the U.S. carriers to make sure they meet schedules to maximize the products' holiday sales."

Motorola's new camera-embedded phones are shipping in Europe, the Middle East, and Asia in October, Kent said, while Asian carriers can expect to see them late in the fourth quarter of 2003 and early in the first quarter of 2004, in time for the Chinese New Year.

LG is also expected to ship a couple of camera phone models to the United States within the next six months, Mawston said, in an effort to regain ground.

Vendors like Nokia are already on top of the camera phone trend in the United States, in hopes of raking up during the holiday season, Mawston said.

Furthermore, American Technology Research predicted that Nokia could become the largest camera maker in the world given that one-fourth to one-third of their product roadmap for holiday 2004 consists of handsets with camera or camcorder features.

Picturing the Future

While vendors tussle for sales of camera phones in the short term, analysts see the market as a long-term opportunity, giving vendors like Motorola and LG the ability to snap up future market share with flashy innovations.

According to Strategy Analytics, the camera phone market could reach $49 billion by 2008.

In 2003, the image-conscious phones will account for 13 percent of global handsets with 65 million units expected to ship worldwide, Strategy Analytics said.