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Digital Camera Prices Dropping, Analysts Say

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November 19, 2004 – Hard times may come to the digital camera industry. The field is polarizing, with Nikon tripling profits from increased sales of their D70 and Sony and Canon still catching a profit, and other companies like Pentax, Konica Minolta and Olympus falling in the red. In the $17 billion market, compact digital camera prices dropped by 15 percent in 2004 and are expected to drop another 15 percent in 2005, according to market analysts. In 2004, growth climbed 40 percent to 68.5 million units worldwide. 2005 will see 22 percent more growth to 84.1 million before hitting a plateau in 2006. To offset this problem, companies such as Nikon are shifting product lines toward the higher end (i.e. more expensive) market where prices are more stable. Other companies, such as Kodak, are focusing more on processing and printing. Camera phones have taken a bite out of business, as the quality of the camera devices increase and users find themselves only needing enough megapixels to email or print 4 x 6-inch prints. Consumers aren’t lured to more megapixels now that they’ve found they can get great prints with 3 or 4 megapixels.

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