The huge U.K.-based European cellular retailer, Carphone Warehouse, is aggressively promoting camera phones -- and competing against low-end digital cameras -- but cellular operators aren't pushing MMS because of the disappointing revenues, according to an article in Mobile.
Vodafone UK this week will begin offering the two megapixel Sharp 902 camera phone that it unveiled in September as part of its big push into 3G, and the phone is "a harbinger of the range of mobile phones with increasingly powerful camera capabilities set to appear in shops throughout 2005," the article says.
Rupert Elvins, the head of imaging at Carphone Warehouse told Mobile, "Looking at what the manufacturers are putting out later this year, there is a very real chance that people will buy a camera with a mobile when they’re looking for a low to mid-end digital camera."
Gunning for digital camera vendors
Mobile notes that Carphone Warehouse appears to be gunning for digital camera retailers, such as Jessops in the U.K. The article says, "Jessops insists that camera phones aren’t a threat, but it is thought to be expanding its modest 14-handset range this year to ensure it doesn’t surrender the mantle as the default camera retailer in the minds of consumers.
"Carphone hopes that its superior retail presence will be a key factor. Significantly, regardless of how much the devices resemble cameras, the commercial proposition will continue to be built on operator subsidy – an area in which Carphone has the experience and well-established relationships that the likes of Jessops can only look to in awe."
Elvins tells Mobile, "If camera phones and digital cameras share the same capability, camera phones will win, simply because they will be subsidised by operators and because they are 'dual functioned.'"
Camera phones versus digital cameras
Despite Carphone Warehouse's optimism, revenues from camera phones have been disappointing. The article notes, "Operators haven’t thrown their weight behind imaging because there is no evidence that camera phones drive up ARPU.
"MMS has failed to meet expectations, largely because of interoperability, and any strength of the camera is lost when sent to an inferior phone. Most consumers have opted to share images by Bluetooth or print them at kiosks."
The lack of interoperability is well known and the fault is clearly with cellular operators that aren't moving fast enough to enable it. It is interesting that the article notes the value of a good image is reduced when you see it on a handset with a poor screen.
No rush by camera manufacturers
The article notes that although cellular phone manufacturers have been rushing into the camera phone business, camera manufacturers have not. Mobile notes, "Sources claimed that the likes of Nikon and Canon have revealed nothing to indicate a sudden move into camera phones."
I've been looking at this market and wondering when, or if, camera phone manufacturers would enter the camera phone market. Although there haven't been many efforts, many subsidiaries and other companies that are affiliated with the camera business are entering camera phones.
One notable example is Sony's participation in Sony Ericsson. Also, divisions of Fuji, Kodak and Samsung, for example, produce digital cameras as well as offering products for the camera phone business.
No threat?
Mobile interviewed a source at Canon who compared the camera phone market to the threat from single-use cameras. The source says, "There was some concern about the impact they would have on camera sales.
"As it turned out, the popularity of single-use cameras increased the number of consumers interested in photography, boosting camera sales.
"We believe that camera-equipped cellphones will serve as a similar impetus for the digital camera market."
No so fast
The threat from single-use cameras is much different than from camera phones. You have to think about carrying a single-use camera, while you are often carrying a cellular phone. That is an enormous difference.
Also, until recently, all single-use cameras were completely analog -- film only. The value of digital -- to be able to snap away and delete photos you don't want -- is unmistakable.
Granted, single-use cameras usually have far superior flash capabilities and all around better ergonomics. In addition, image quality -- while inferior to 35mm cameras -- is typically much better than today's VGA camera phones.
Technology will help
I believe camera phones will rival many digital cameras in enough features to make them tough competitors to digital cameras. Some one megapixel camera phones produce photos that are just fine for printing.
With two, three and even five megapixel camera phones with much more powerful flashes and optical zoom lenses already available in Asia -- and two megapixel handsets in Europe and coming this year to the United States -- the bugaboo of poor camera phone quality will fade in a few years.
Digital cameras certainly aren't going to go away (I use camera phones, digital cameras and film cameras) but if I were in the digital camera business, I'd be very concerned. How good does a mass market camera have to be?
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