Digital cameras were the latest must-have product, and hordes of consumers were rushing out to purchase their first digicam. Not only that, but many were willing to pay quite a premium to do so. Manufacturers happily rushed in to fill the void. Some brought with them a heritage in film cameras; others brought a heritage in consumer electronics. Some were essentially complete unknowns. Models spanned the range from high-tech cameras with almost every feature a consumer could ask for, to entry-level and toy digital cameras that offered pictures you could almost make out faces in, if you squinted just right... Some manufacturers designed their own cameras, others tweaked designs from OEMs; some simply resorted to rebadging cameras from the OEMs just to have their name in the marketplace. Cooperations between traditional camera and consumer electronics companies blossomed as they strove to strengthen their respective offerings.

A few years down the line the market growth has slowed, with many consumers already having purchased several digital cameras. With image quality - even in supposedly entry-level models - already meeting many many consumers' requirements, the rapid expansion seen in a fledgling digicam market couldn't be sustained indefinitely. A handful of manufacturers from the film camera and consumer electronics fields had by now stamped their dominance on the majority of the market. That, coupled with rapidly falling digicam prices, left the remainder fighting each other on razor-thin margins - something that can only go on for so long before the cash runs out.

A couple of recent news stories have confirmed this trend, with instantly recognizable names either leaving the digital imaging market, or struggling for their very existence. One such piece of news, courtesy of the British Journal of Photography, is that Kyocera (and its well-known Contax brandname) have ceased making 35mm film cameras, and will end production of digital cameras by the end of the year. Contax first appeared in 1932 as a product of Zeiss Ikon AG, and was later absorbed into a Japanese electronics company, Yashica. When Yashica themselves were taken over by Kyocera, the Contax brand was included as part of the deal.

Kyocera / Contax produced some fine digital cameras over the years, but the company also stumbled a few times - most notably with the Contax N Digital, the world's first full-frame digital SLR. The camera was a cutting edge product when announced, but struggled against numerous problems. Shipping delays, image noise, poor low-light AF performance, high power consumption, and a product recall just a couple of months after the camera started shipping - all took their toll. In the end what should have been an example of a trend-setting product befitting Contax's reputation became nothing more than a drain on the company's finances.

Kyocera isn't the only company with a rich history that has stumbled in the digital marketplace. Leica is a very well-known brand, and one that evokes fierce loyalty among its users. The company that created the first ever 35mm camera in 1914 (albeit as a prototype), and lists a number of other firsts throughout its product history. A partnership with consumer electronics company Panasonic looked to have given Leica a great boost in the digital market, and the products of these companies' combined efforts have received great reviews.

Despite all this, however, Leica has recently found itself in financial difficulties, with sales dropping significantly year on year. A recent announcement that its forecast operating losses would lead to a loss of half the company's registered share capital prompted banks to partially sever Leica's credit lines. A press release on the Leica website puts a brave face on the situation, noting that the reductions in credit lines "do not as yet endanger the Company’s solvency" and that Leica has just launched a joint-venture sales company in Japan. Unquestionably though, Leica is facing one of the most difficult challenges in its 150+ year history - and it will have to make significant changes to survive in the digital world.

The difficulties faced by Kyocera / Contax and Leica illustrate perfectly what may be coming for some of the other smaller names in a rapidly consolidating digital camera market. There simply isn't enough growth to sustain so many manufacturers, and the question isn't whether there will be more failures, but when (and whom?) For the individual companies involved, these failures will be heartbreaking - but the world of digital photography as a whole will continue to move on unimpeded, with dozens of manufacturers remaining to spur healthy competition. At the end of the day the consumer wins, with digital cameras that are becoming incredibly capable, for a fraction of what they'd have once cost.