Smartphones are crushing the point-and-shoot camera market

TOKYO: The rising popularity of smartphones is stifling demand for point-and-shoot cameras, threatening the once-buoyant sector as companies scramble to hit back with web-friendly features and boost quality, analysts say.

A sharp drop in digital compact camera sales makes them the latest victim of smartphones, as video game consoles and portable music players also battle the all-in-one capabilities offered by devices like Apple Inc.’s iPhone and Samsung Galaxy.

Just as digital cameras virtually destroyed the photographic film market, the rapid switch to image-taking smartphones has ripped into a camera sector dominated by Japanese companies such as Canon Inc., Olympus Corp., Sony Corp. and Nikon Corp. is dominated.

“We may be seeing the beginning of the compact camera market collapse,” said Nobuo Kurahashi, an analyst at Mizuho Investors Securities.

Figures from Japan’s Camera and Imaging Products Association reflect the analyst’s gloomy forecast.

Global shipments of digital cameras by Japanese firms in September fell about 42% year-on-year to 7.58 million units, with compact deals down 48%, the association said.

High-end cameras with detachable lenses fell a more modest 7.4% during that time, it said.

Part of the decline was due to weakness in debt-ridden Europe and a territorial dispute between Tokyo and Beijing that has sparked a consumer boycott of Japanese-branded products in the Chinese market.

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However, according to analysts, smartphones have proven to be a powerful rival for point-and-shoot cameras as they offer an all-in-one phone, computer and camera with comparatively high image quality and internet photo download.

These features have also dug out from video game makers like Nintendo, who have just released their new game console, the Wii U, as smartphone owners increasingly download free online games or store music on the devices rather than using standalone MP3 players.

“The market for compact digital cameras shrank faster and on a larger scale than we imagined as smartphones with camera capabilities spread around the world,” Olympus President Hiroyuki Sasa said in a press conference this month.

Olympus said its camera business lost money in the first half of the fiscal year due to the growing popularity of camera-equipped smartphones and a strong yen making overseas Japanese exports less competitive.

Digital camera companies have trimmed their revenue targets for the fiscal year ended March in a “collapsing” market, said Tetsuya Wadaki, an analyst at Nomura Securities.

“Order volume at parts suppliers currently appears to be down more than 30% year-on-year,” Wadaki said.

Companies are striving to further improve image quality, offer features such as waterproofing, and expand their internet capabilities, for example by allowing users to share images via social media networks.

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Areas of growth for camera manufacturers include emerging markets – where many do not own cameras or smartphones – and the demand for spare parts among compact camera owners.

And the drop in demand hasn’t been as severe for the more expensive cameras with detachable lenses, which are favored by avid photographers and a growing number of camera-loving retirees, particularly in rapidly aging Japan, they say.

Another emerging battlefield is mirrorless cameras, which can be made nearly as small as point-and-shoots but have image quality to rival their bulkier counterparts.

Canon insists the market hasn’t been left to smartphones.

“The demand for high-quality snapshots is there, such as photographing your friends’ weddings, a vacation abroad or your children,” said a Canon spokesman.

“We believe there are many people who need compact cameras,” he added.

Mizuho analyst Kurahashi acknowledged that compact cameras “are not going away”.

“But we see the current trend continuing as image quality in smartphone cameras continues to improve,” he said.

“The compact camera market will continue to shrink and it is difficult to predict an immediate comeback or have any optimism.” AFP


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