Camera Phones Hot, Cameras Not

moto phoneQuick – which is the number one digital camera maker in the world? If you guessed Cannon, Pentax, Olympus or any of the usual suspects, well you are wrong. According to the latest research from Strategy Analytics, 257 million camera phones were shipped worldwide 2004. That’s a 200% jump from 2003 when 84 million camera phones were sold. In 2004, 68 million digital still cameras were sold up from 49 million in 2003. Put another way, in 2004 the sales of camera phones were four times the total digital still camera shipments.

Nokia had 18 percent of the camera phone sales, followed closely by Motorola at 17 percent, and Samsung in third position at 13 percent. Clear sign, hard times are ahead for digital camera phones. Chris Ambrosio, Director of Strategy Analytics’ Global Wireless Practice points out that, “The digital still camera market is running out of steam. Vendors such as Kodak, Canon and Fuji will find growth harder to achieve in 2006. Camera phones will eventually capture 15 percent of the low-end digital still camera market by 2010, while attempts to sell households in developed markets a second or third device will be restricted by the ubiquity of multi-megapixel camera phones.” Strategy Analytics says that while most of us will be getting VGA phones, but the handset makers are going to indulge in “pixel wars” and phone makers will use pixel counts as a differentiator in higher product tiers.

The analyst firm predicts that removable memory will be standard issue on camera phones by the end of 2007 but the wireless connectivity landscape for camera phones (e.g. USB, WLAN / WiFi, Infra-red, Bluetooth, etc.) will be fragmented, requiring printer, and other ecosystem, players to support a wide range of solutions based on regional market dynamics. To learn more about the future of the cellphones in the US, check out my Business 2.0 column, Waiting for Cool Phones.