IHS iSuppli expects entry-level point-and-shoot camera sales to suffer as smart phone cameras become increasingly capable. With the introduction of the iPhone 4S, Apple presented one of the most sophisticated phone cameras on the market. In addition to an 8 megapixel BSI CMOS image sensor, which allows 73% more light to hit the sensor, thus improving low light sensitivity, Apple has also upped the ante with the lens, opening the aperture from f/2.8 to f/2.4. Apple also included a hybrid infrared filter, which is intended to reduce the effects of chromatic aberration and ghosting often seen in small mobile sensors. Apple claims the results in image quality due to the improvements in the sensor and the lens will make pictures printed as large as 8"x10" pixel for pixel possible. The video capabilities of the iPhone 4S have also been enhanced from 720p to 1080p HD at 30 FPS, which brings Apple up to par with most Flip-style recorders. To top it off, digital image stabilization and temporal noise reduction have been included as well. Similarly, other smartphones are seeing increased capabilities too, such as HTC’s recently announced Titan and Radar, which both sport cameras with f/2.2 lenses. The HTC Incredible and Motorola’s Bionic Android also sport an 8 megapixel sensor matching the new iPhone’s 8 megapixel resolution.
Today’s life style is about convergence and convenience. Aside from increased performance, camera handsets are becoming one of the fastest growing segments of the digital camera market due to the ubiquity factor of always being with us while reducing the number of gadgets in consumer’s pockets. However, smartphones biggest edge over point-and-shoots today, aside from its ubiquity and all-in-one characteristics, is ease of sharing. The point-and-shoots that are experiencing the greatest loss to smartphones are the entry-level compacts, normally purchased by consumers who are only interested in posting pictures to Facebook and Flikr and who think megapixels are what define photo quality, for whom smartphone cameras are “good enough.” With social networks being the norm for how we communicate and share photos, mobile camera phones make sharing seamlessly easy. Without a constant broadband connection, uploading photos from a digital still camera onto a social networking site still requires effort. Cameras with built in WiFi or Bluetooth are rare today, as shown by IHS iSuppli data, with only 3% of digital still camera units offered WiFi in 2010 and growing to only an estimated 16.3% in 2015. Smartphones, of course, are almost always connected via their 3G/4G interface.
However, there are still some caveats that keep phone cameras from being a point and shoot camera killer. Most notably is the exclusion of the optical zoom lens, as consumers today want the highest zoom lens available. Photography enthusiasts care about image quality. Therefore, the more advanced point-and-shoots and DSLR digital cameras will remain in demand. Nonetheless, in conjunction with improvements in quality, phones are starting to win market share from the low end point-and-shoot camera OEMs. IHS- iSuppli believes this trend will continue as year-over-year digital still camera unit growth penetration rates decline from 12.2% growth in 2010 to only 0.8% in 2011, and declining to -2.9% in 2015. DSLRs, 3D cameras and more advanced point-and-shoots are cushioning these declines, keeping demand relatively flat over the forecast period. In the near term, smartphone cameras are starting to erode the low-end point-and-shoots, but for those consumers who don’t want the size or expense of a DSLR yet still want better optics, the high-end point-and-shoot market will continue to subsist.
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