Smartphones continuing to eat into photography and gaming markets

Smartphones continuing to eat into photography and gaming markets

According to IC Insights research, it took less than 10 years for the digital camera to render the film camera obsolete and it has taken roughly the same amount of time for cell phones and smartphones to do the same to traditional stand-alone digital cameras. Its figures show that smartphone handsets with a 3 megapixel or greater image sensor are currently outselling standalone digital cameras by a 6:1 ratio. Annual revenues for standalone digital cameras have been on the decline since 2007. Worldwide, unit shipments of digital still cameras, which peaked in 2011 at 142 million systems, are expected to decline 3 percent in 2013 to 133 million after falling 4 percent in 2012.

ABI's research, which looks at how smartphones are disrupting both the digital camera and portable gaming console markets, shows that shipments of portable games consoles are also expected to fall at least 4 percent globally and 11 percent in North America, while according to its figures, digital camera shipments are expected to fall by a much greater margin than IC Insights predicts. It claims that camera sales will drop 13 percent worldwide and a staggering 20 percent in the US. And this is despite the best efforts from Sony and Samsung to develop cross-over products like the PS3 Vita and Android powered Samsung Galaxy camera.

Senior ABI analyst Michael Inouye commented, "Early sales of Sony's 3G Vita were quite strong, likely attributable to pre-launch bundles which favored the cellular version -- more recent holiday bundles have since favored the Wi-Fi-only model. Incremental monthly fees consumers must pay when adding these devices to their cellular data plans combined with metered data often overweigh the benefits of mobile devices excluding smartphones and tablets."

Although Samsung's Galaxy camera wowed the crowds when it was demonstrated at CES 2011, now that it has officially launched, consumers don't appear so excited by the prospect of having to buy a camera with a monthly network carrier contract. However, ABI believes that the two markets can continue to compete through devices and products that truly differentiate themselves from the smartphone competition -- for example cameras with superior lens and image sensor quality and portable games consoles with superior user interfaces and exclusive games title tie-ins.

TV & video practice director, Sam Rosen added, "While the auditory and visual quality of content in many ways is less important today than in the past, some consumers still look for these features. A subset of customers still look to higher end single-purpose cameras for higher image quality and portable game players for better game-play quality over Smartphone feature sets. When CE manufacturers and operators work together to develop win-win data plans, and reduce the cost burden of the additional hardware, these classes will again find favor with consumers."