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IDC Looks Into the Framed Future

pma08.jpg By MIKE PASINI
The Imaging Resource Digital Photography Newsletter

LAS VEGAS -- We rose before the sun did Thursday morning to get the Wynn Las Vegas in time for IDC's breakfast briefing "The Forthcoming of Imaging in a Digital World" before the PMA trade show floor opened. The future of digital imaging wasn't quite so much on our mind as our stories about yesterday's Sneak Peak and Digital Focus. Talk about time warping.


Latin America

Capturing Camera Markets

The Captured Content


But it didn't take long for IDC's analysts to clear up whether we were coming or going. Both, as it turns out.

The three presentations covered the Latin American market, Capture challenges and Content issues (which turned into an interesting discussion of digital photo frames). Rather than report them point-by-point, we'll hit some of the more interesting observations. Sort of the microwaved version of the buffet.

LATIN AMERICA | Back to Contents

Latin America Consulting Director Natalie Eisner's talk covered the emerging market in Latin America. "Capturing a Slice of the Double-Digit Growth Opportunity: The Latin American DSC Market," she called it. We'd call it Selling Digicams in Latin America.

It turns out, it's not that simple.

One problem is Latin Americans are wary of buying over the Internet, preferring to purchase in person at a store. That store is likely to be a department store, but the department store will be stocked with products from second and even third tier companies. Combine that with "paucity of in-storm promotion" and the very price conscious Latin American consumer and you'll understand why Sony's share of the pie has shrunk considerably since 2002.

Sony still sells about 25 percent of the gear, followed by Kodak, Canon, Samsung, Olympus and HP. Those name brand sales were often buttressed by bundles (Canon with a tripod, HP with a printer). But the lower tier companies are now 20 percent of the pie.

Price consciousness isn't the only issue with higher end sales. Financing (even with a credit card) is difficult to arrange, Eisner said. In some cases, companies have gotten pretty creative about financing. Some computer manufacturers actually bill through the utility company, she observed.

The lower concentration of computers in Latin America is an opportunity for increased print sales. It's the way images are shared with family members who don't have a computer. Or broadband, with only 15 percent of households enjoying that advantage in 2007 and only 25 percent anticipated by 2011.

The dSLR market is expected to grow 35 percent this year as entry-level models under $1000 proliferate. That hints at a more sophisticated buyer in Latin America, no longer impressed with mere megapixels when they go shopping. But the entry-level market remains confused about what matters in a camera.


Christopher Chute, IDC manager of Worldwide Digital Imaging Services and Solutions, addressed the gathering with a presentation entitled "Fight the Future! Challenges and Opportunities for the Camera Markets."

While camphones (which Chute called "multimedia handsets") are expected to break the 800 million unit mark this year, up from about 700, digicams will see only a modest increase, remaining well under 200 million units.

Pricing per megapixel of camera continues to decline but is starting to level off as we hit the $200 price point. The dSLR market has come down from over $1,000 in 2006 to about $900 this year with projections as low as $700 by 2011.

But it isn't about megapixels anymore. The compact camera has matured, with buyers looking for optical and mechanical image stabilization above all. They also want increased optical zoom, HD video and autofocus enhanced with face detection.

Camphones, however, are leading the way as networked, socially oriented devices with video sharing predominant. Sony leads in the digicam social networking lane with its PMB Portable software and Sharemark feature. Casio's eBay and YouTube Scene modes are also a move in that direction, although they don't actually transmit anything.


Finally, Ron Glaz, IDC director of Digital Imagine Solutions and Services, discussed "Digital Image the True Challenges and Opportunities."

The world is going digital, Glaz confirmed, with 206 million households expected to have a network installed by 2011. There are already 59 million cell phone users in the U.S. who access the Internet with their phones. And 70 percent of the U.S. relies on the Internet on a daily basis. Of those households that use the Internet, 87 percent use a social network.

Glaz described the big challenge as stimulating users "to release photos from the PC." He offered two approaches: the digital photo frame and photo printing keyed to user lifestyles.

As camera technology slows down (a little bit, anyway) and households enjoy acquiring more and more content from multiple cameras, users are interested in releasing their images, but want the best solution for distributing, managing and sharing them.

Glaz suggest digital frames are a popular, inexpensive way to at least view the images. In 2007, there was a six percent market penetration with a $75 mean price paid (but not at the same time as a camera was purchased). Interestingly, 38 percent of purchasers did not know what brand they had bought, but memory card slots and battery power (hide that ugly cord) were the top features influencing purchase.

Brand confusion isn't hard to understand with nearly 90 companies selling digital frames whose technology is engineered by a handful of companies.

Driving sales of frames (besides the cool gift factor) are the increased capacity of flash memory cards at decreasing prices, the evolution of home networks to support content distribution, lower cost frames with larger sizes and support for still, video and audio.

There are a couple of inhibitors to sales, too. For one, the novelty wears off quickly if content isn't continually refreshed. For another, high LCD demand is keeping the price up.

The most popular size will remain the seven to 8.9 inch frame, Glaz predicted. Larger sizes compete with notebook displays and smaller sizes don't compete with the framed photos hung on the wall.

The wireless frame, he also predicted, will take over the market by 2011, modifying the way frame content is refreshed. WiFi cameras will move content to the home network which will share it wirelessly throughout the house and move it online, too.

His second suggestion -- photo printing keyed to user lifestyles -- is based on the observation that more and more people are interesting in sharing their life experience with family and friends through custom prints and merchandise. Custom revenue is expected to grow from $185M in 2005 to $1B in 2010. That will be accompanied by a conversion to dry minilab kiosks from the wet minilab that still predominates today.

So Glaz believes digital frames are a first step for the consumer desperate to share their memories with wireless technology playing a key role in keeping that solution fresh. Social networks drive online creativity and present another opportunity. Dry minilabs provide retailers with the ability to offer creative prints onsite.

In the discussion period afterwards, Glaz confessed he sees the digital frame as enabling image viewing on the TV, which is a far more complex proposition. But the large HDTV is the perfect frame for any digital photo. As our IT-conscious population matures, sharing images over the home network on one or another output device will be common.

And that includes printing images you see on display, too. "Oh," he quoted a recent visitor to his home, "can I have that picture?" Sure, he said, and made a print of it from his computer for them. It would never have happened without the TV slide show.

That was a nice note to leave on, we thought. Readers of this site have been following these trends with our unusually comprehensive reviews of digital frames and HDTV image sharing. Apparently we're getting up early enough in the morning to catch that worm.