Aggressive price cutting on digital cameras

Peter Vogel

Digital photography is perhaps the most rapidly adopted consumer electronics technology of all time. If not, it must be a close second to the DVD, often touted the same way.

A decade ago digital cameras were simply exotic toys, far too expensive for mainstream use. Units not even at the single megapixel stage sold for around $1,000. LCD screens were available, typically as add-ons that hung off the side of the camera.

Battery life of such cameras was measured in minutes. A hundred shots from a quartet of AA batteries meant you were doing very well. If the LCD was in use you could easily cut that number in half.

Those days, mercifully, are behind us. Digital cameras still chew up batteries, but the batteries are much improved, as are the cameras themselves. At school most of our cameras are Canons with proprietary lithium batteries. These batteries aren’t cheap but they quickly pay for themselves.

Every year about this time we publish a synopsis of the local digital camera marketplace (available online at www.ndrs.org/iol/cameras.htm), as presented in the avalanche of Christmas advertising flyers arriving in our mailboxes and community newspapers.

Last year’s survey featured around 80 different models from a dozen or so manufacturers. These companies produce many more models, but most elect to promote just a handful. Others may be highly specialized models with little mass-market appeal.

This year’s survey, although not yet complete as this is written, has just 54 models, a reduction indicative of consolidation in the marketplace. Epson, the company that was the first featured in this space for its PhotoPC 500 almost a decade ago, has effectively disappeared from the local digital photography field.

Most apparent in the current survey is the change in market sweet spot, the megapixel range where most advertising is focused and where the value for the dollar is greatest.

Last year it was 5 MP, with almost half of the field falling into this category. This year, 5-MP models are barely represented, with just 10 units. Four MP has just two and will almost certainly be gone from next year’s survey, joining 1, 2, and 3 from previous years in the technological trash heap.

This year’s sweet spot is 6-MP cameras, representing almost half the survey. Of those units, half come from the big three in North America: Canon, Kodak, and Sony. Fuji and Olympus are also competitive players. Nikon’s previously aggressive marketing, not only in this range but across the spectrum, is conspicuous by its almost complete absence this time around. Computer and printer manufacturer HP appears to be faltering, although it does occupy six spots on the chart.

Smaller players such as Casio and Samsung still have a couple of models locally, although it seems unlikely these two will still be in this field a year down the road.

Aggressive price cutting by all manufacturers has to be taking a toll. A year ago it looked as though Kodak might have turned a corner in a veritable fight for its corporate life. Today it’s hard to say how that battle will play out.

Who’d have thought a year ago that today, for $200, you could have a 5-MP Canon A430, with decent optics and additional features. Two years ago, our survey ranked the comparable A95 as a best buy, at $470!

Last year’s prediction that 8 MP might be the sweet spot this time around clearly has not panned out. Perhaps it came a year early. Once the supply of 6-MP and lower-image sensors has been exhausted look for advertising that targets the more profitable (read expensive) higher-resolution sensors.

There’s no doubt that the field is maturing. Certain consumers may already be on to their third- or fourth-generation digital camera. Gone are the days where venerable Canon, Nikon, and Pentax film cameras looked pretty much the same from one decade to the next.

Semi-professional DSLR (digital single-lens reflex) cameras represent a rapidly growing segment of the digital camera market. Many users are fed up with shutter lag and image processing time between successive shots in standard digital cameras. DSLRs don’t have such issues, but then again, a DSLR doesn’t exactly fit in a purse.

A sure bet as a winner in the DSLR category is the recently released Canon Rebel Xti, a significant upgrade (10-MP image sensor, up from 8-MP, bigger LCD) on the popular Rebel XT, itself still available for around $780.

Be sure to check out our list www.ndrs.org/iol/cameras.htm with its links to detailed specifications for cameras at prices from $80 to well over $4,000, all conveniently grouped by resolution and with prices for each camera from up to three local vendors.

At its 2006 Industry Forum in mid October, the Consumer Electronics Association released its annual projection of spending habits for the coming three months.

CEA, an umbrella organization for some 2000 manufacturers and retailers in the consumer electronics industry, is a powerful group, one that can shape trends and bring legislative clout in the American marketplace.

CEA figures project that CE spending will hit some $21 billion, or about one quarter of all Christmas spending. Those figures are up noticeably from the year previous, at $17 billion (21 per cent).

The survey also tracked what consumer electronics consumers want the most (wish list items) and what they are mostly likely to give (gift list items) this Christmas. For the second consecutive year, MP3 players topped the wish list among adults. The rest of the top 10 list included: DVD players/recorders, digital cameras, laptops and PCs, televisions, video game systems, cellular phones, camcorders, and HDTV.

Topping the gift list, an indicator of what consumers actually plan to buy, are digital cameras, cellular phones, MP3 players, video game consoles, portable CD players, carrying cases, cordless phones, additional memory for digital cameras, laptops, and clock radios.

CEA also surveyed teen participants aged 12-17. Topping their wish lists were MP3 players, video game consoles, and computers.

The CEA site www.myCEknowhow.com presents useful consumer electronics tips.

Product of the week

The 10-minute e-mail address. Yes, you read that correctly, an e-mail address that lasts 10 minutes (short extensions available) and then expires. Perfect for online applications requiring an e-mail address for confirmation purposes. Try one at http://www.10minutemail.com/.

Peter Vogel is a Physics and Computer Sciences teacher at Notre Dame Regional Secondary School (www.ndrs.org). Suggestions and comments may be sent via e-mail to peterv@portal.ca.