Digital still camera sales suffer

For several years, camera makers fought off the encroachment of camera phones by continuously increasing the megapixel resolution, but most camera phones have reached the point of providing "good enough" picture quality to satisfy most consumers. Figure 1 underscores the threat coming from camera phones with 3Mpixel and greater picture resolution. Shipments of ≥3Mpixel camera phones are forecast to grow much more quickly than DSCs and exceed one billion units for the first time in 2014. Direct wireless connectivity to the Internet has become a major issue for standalone DSCs, which are losing marketshare to "good-enough" embedded cameras in smartphones that can quickly connect and upload photo files to websites and e-mail. This convenience is now trumping higher picture quality in DSCs, especially when it comes to the high-volume point-and-shoot digital cameras. To compete with camera phones, many DSC makers are packing new models with more features and capabilities--many of them similar to what's found in smartphones. Also, the market has seen the emergence of a new breed of digital camera that combines the small body of compact point-and-shoot DSCs with interchangeable lens-mounting systems of D-SLR models. These new systems are called electronic viewfinder interchangeable lens (EVIL) cameras, which are thinner than bulky D-SRL cameras because they do not use mirrors between the image sensor and optical-eyepiece viewfinders but instead have all-electronic viewfinders built with LCD technology. DSC unit shipments increased by a compound average growth rate (CAGR) of slightly more than 37% in the 2000-2005 period, but slowed to 9% per year between 2005 and 2010, and are projected to rise by merely 2.1% annually from 2010 through 2015.