San Jose Mercury News reporter Therese Poletti today writes about the business of camera phones, focusing on applications and the increasing sales of camera sensors for handsets.
The article says that as the market expands for camera phone sensors, "some chip makers are looking to buy their way into the business." Cypress Semiconductor bought FillFactory, a Belgian company producing sensors and Micron purchased Photobit, a spinoff from Pasadena, Calif.'s Jet Propulsion Laboratories.
T.J. Rodgers, the CEO of Cypress says in the article, "We believe that cameras are going to be the next thing that are going to become very prevalent in cell phones. Anything that goes into cell phones is going to be high volume and the winner will be the company that can manufacture high volumes at low cost."
Applications
Poletti also interviews several people who use camera phones for business applications, including a real estate agent and a project manager at a construction company, Engineered Structures in Boise, Idaho. Engineered Structures has given camera phones to a few supervisors in the field so they can transmit photos for daily updates.
Nels Nelson, a project manager at the Boise company, says, "I can come in every morning and log on and view a project in central Washington and one in Phoenix." Some project managers also use regular digital cameras.
Nelson says, "Instead of having to carry two tools, a cell phone and a camera, they can carry one,'' he said. "It makes communications on a project that is a long ways away seem like it's in the same town.''
My [mis]quote
I'm also quoted in the article about the use of camera phones by BBC reporters and about how camera phones are eating into the market for film cameras.
However, the reporter made a mistake. I'm quoted as saying that once we get two and three megapixel camera phones they will "start eating into the high end of the digital camera market."
No -- I said "higher" end of the market -- higher than VGA, but not high end. As I've written in this Weblog many times, camera phones are cutting into sales of VGA digital cameras and will begin cutting into sales of higher -- one, two and three megapixel cameras -- once we see good higher resolution camera phones.
Digital camera market
But there will continue to be a good market for high end digital cameras -- those beginning at, for example, five megapixels and above. The sweet spot for the digital camera market is three and four megapixel cameras.
I try to be very clear about this when speaking to reporters, but I will try to be even clearer!
In Japan and South Korea, where one megapixel camera phones are prevalent and where three megapixel handsets have just been introduced, camera phones are eating into the low end of the digital camera market and will begin affecting a higher tier of the market -- but not the high end.
In the United States, we'll see a variety of one megapixel camera phones by the end of the year but we won't see a major impact of these higher resolution handsets (assuming the image quality is good) until later in 2005 when prices are reduced.
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