Growing digital photo market lifts all boats


28 Feb 2005

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After several years of spectacular growth, the European digital photography market is at last beginning to slow, an international press briefing hosted by Hewlett Packard’s (HP) Leixlip plant heard last week.

Presenting new research at the event, Paul Withington, research manager of western European peripherals group at IDC, said the market grew 58pc year on year in 2004 but that the growth would slow to 13pc in 2006. By that stage, the European market will be worth an estimated US$10bn per annum or 28 million units, up from US$7.8bn (23 million units) in 2004. Canon retained its position as market leader with a 17pc share, followed by Sony (14pc), Olympus (13pc), Fuji (11pc) and Nikon (10pc).

Regarding market trends, Withington noted that, while camera phones would eat into the number of low-spec digicams being shipped and wipe out entirely the market for small spy or toy cameras, digital cameras would continue to exist as a separate and thriving product category.

“There will be some convergence but there will still be room for both types of product,” he told siliconrepublic.com. However, manufacturers would look to put some distance between their products and camera phones by incorporating additional features, he said. In this context, the entry-level resolution for digicams would rise to 4MP, said Withington, noting that MP rating and the presence of a zoom were seen as the No 1 and 2 selection criteria by buyers. Didier Cayrac, digital imaging segment manager for HP EMEA, added: “The MP race will continue as all the camera manufacturers want to bring better solutions to market. It’ll probably slow down but for the foreseeable future, the cameras will keep getting better.”

Withington noted that the popularity of digicams was having a knock-on effect in the home printing market, where sales of small format or ‘appliance’ printers (printing 6×4 inches as standard) were booming. Whereas the market for A4-plus sized inkjet printers declined by 17pc in 2004, the appliance inkjet printer market grew by 54pc. Some 10 million such devices were sold, predominantly by HP, which accounted for one in every two machines shipped. While the cost of consumables and the associated ‘hidden cost of printing’ has been a constant irritant for buyers, Withington noted that vendors have taken important steps to making the cost more transparent by offering bundled packages of printer paper and inkjet cartridges – thus giving users offering a cost-per-photo view of printing. He noted that although home printing typically costs between 35 cent and 40 cent per photo, which is more than typical retail outlets, users benefit from greater convenience and control. This helped explain why some 80pc of digital image printing is done at home.

Commenting on the market opportunity for HP, Kim Holm, vice-president of supplies for HP EMEA, said that photoprinter business was growing by 100pc year on year for the computer firm as sales of digital cameras continued to rise and consumers looked to print from home.

By Brian Skelly