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COMPUTING

Digital, PC cameras march to convergence

October 27, 1999
Web posted at: 10:17 a.m. EDT (1417 GMT)

by Nancy Weil

From...
IDG.net

(IDG) -- Future PC cameras will be more like their mobile, digital kin as U.S. consumers keep those converging markets hot, according to International Data Corp. (IDC).

More PC cameras that detach from computers and share the features of digital cameras will be released in the coming years, said Kevin Kane, an analyst at the Framingham, Mass.-based market researcher. The convergence in the camera market already has begun, he said.

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While that continues, low-cost PC cameras will become increasingly attractive to consumers, spurring growth of second- and third-tier vendors which are expected to challenge market leaders Logitech and Intel, IDC is forecasting.

Ezonics during the third quarter marketed PC cameras for as little as $29, Kane said. Logitech in turn offers a $49 PC camera. Devices at the high-end of the market retail for about $150, with an average price of $70.

"To be honest, I'm not sure there's a huge difference between the $150 products and the $130 and $70 (range)," Kane said.

IDC expects a compound annual growth rate for PC cameras in terms of units shipped of 61 percent from 1998 to 2003.

During the third quarter of this year, which ended Sept. 30, Logitech shipped 38 percent of the 410,000 PC cameras in the U.S. market, followed by Intel, which shipped 29 percent of the total, IDC found.

Digital cameras will remain more expensive than PC cameras, but future cameras will have more features and offer better image quality for ever-lower prices, the usual trend in electronics. Hot segments of that market will be the so-called "toy" cameras for youngsters, and low-end wares priced for less than $250.

Though the low-end digital cameras will have lower resolution, less memory and fewer options than more expensive models, they will appeal to consumers who are "a little wary of new technology as far as spending $500," the analyst said.

Digital and PC cameras are expected to be hot items at the upcoming Comdex trade show in Las Vegas. Kane expects to see vendors introduce consumer digital cameras offering three mega pixels in the $700 to $1,000 price range.

Camera enthusiasts who can bear to wait a few months will see those prices drop rapidly after the first of the year, Kane said.

Undoubtedly, market leaders Sony and Eastman Kodak will be touting new camera wares at the show.

Sony cornered 35 percent of units shipped in the U.S. digital camera market during the third quarter of this year, according to IDC.

Kodak cameras came in second, with 20 percent of the 440,000 total shipments.

Olympus America was third in shipments with 17 percent.

IDC forecasts a compound annual growth rate of 50 percent in units shipped for digital cameras from 1998 to 2003.

The figures were included in a new quarterly market report. This marks the first time that IDC has issued quarterly data about digital cameras, but the market researcher intends to continue doing so through next year.

IDC is owned by IDG News Service parent corporation International Data Group.

Nancy Weil is a U.S. correspondent for the IDG News Service in Boston.



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