Digicam market heading for a crunch?|
(Tuesday, June 12, 2001 - 16:19 EDT)
Reuters looks into its crystal ball and foresees tough times ahead for digital camera manufacturers...
An interesting item from news agency Reuters today looks at the future of the digital camera marketplace, and predicts some tough times ahead for manufacturers in a marketplace which is heading for a shakedown that could reduce profit margins and remove the weaker players. The full item can be read in its entirity on Reuters' site, but some interesting highlights are as follows:
- 80% of the world's digital cameras are made by Japanese companies
- The top four Japanese brands are Sony, Olympus, Fuji Film and Canon; all four expect to carve out a 20 to 25% market share, leaving precious little for other manufacturers such as Kodak and Hewlett-Packard if they achieve their goals. Kodak and HP are concentrating on the US market, the largest digicam market in the world; they are also slashing camera profit margins to increase market share and promote their printer/online imaging businesses...
- Canon execs foresee a final industry 'map' with potentially as few as three major players; certainly no more than 4 or 5.
- Global sales last year reached 11 million units; forecasts expect a further 40 to 50% rise this year. Profit margins for the big players are only 12-13%; predictions as to what will happen to these margins vary wildly. (Merrill Lynch predicts level or possibly shrinking margins due to a more competitive market and slowing growth rate; UBS Warburg suggests the top 3 or 4 companies could leverage their market share into a 20-30% profit margin.
- The shift to digital is predicted to erode film camera and supplies sales, but a potential is noted for sales of film to be replaced with sales of printers and related media (inks, paper, etc.)