Arrow-right Camera

Business

Smartphones get blame for sharp decline in camera sales

Sat., Dec. 21, 2013

Friends Amrita Mohanty, 16, left, Marta Williams, 16, center, and Michelle Mao, 15, take a Snapchat “selfie” while having coffee at a tea bar in Woodbury, Minn., on Dec. 12. As smartphone cameras become more advanced, traditional cameras are feeling the pinch.
Friends Amrita Mohanty, 16, left, Marta Williams, 16, center, and Michelle Mao, 15, take a Snapchat “selfie” while having coffee at a tea bar in Woodbury, Minn., on Dec. 12. As smartphone cameras become more advanced, traditional cameras are feeling the pinch.

It’s a modern paradox: People are taking more photographs than ever before, nearly 400 billion this year, yet sales of cameras are shrinking.

Overall, global shipments of digital cameras have fallen 30 percent this year, according to Christopher Chute, research director of worldwide digital imaging at IDC, a market intelligence firm. Camera stores are closing, and those that remain are emphasizing customer service or high-end products as they fight to stay relevant.

“It’s especially shocking because this was a market that until recently was growing by double digits,” he said. “This is the beginning of the collapse for cameras.”

And the obvious reason for the decline? The ubiquitous smartphone – a combination mobile phone, personal computer, data storage unit and camera, small enough to fit in a pocket. Nearly 60 percent of U.S. homes now have one, compared with 70 percent of homes that own more than one camera, according to The NPD Group.

But while digital camera sales fell by nearly a third this year, smartphone sales are expected to rise more than 32 percent.

It’s a culture shift that many believe started with the release of Apple’s iPhone 4 and 4S in 2010-2011, the first smartphones to have a backlit-illuminated sensor to produce brighter pictures with accurate colors to rival the quality of a decent point-and-shoot.

While sales of point-and-shoots have dropped the most, sales of single-lens reflex cameras also have started to decline, although not as much. Sales through October were down 8 percent this year, said Ben Arnold, industry analyst at The NPD Group in Virginia.

Camera manufacturers such as Canon and Nikon, whose stocks have lost more than half their value since the iPhone was introduced in 2007, tried to stop the free fall this holiday season with aggressive markdowns. The lower prices were expected to increase sales nearly 10 percent, Arnold said, but sales on digital single-lens reflex cameras increased only 1 percent compared to last year.

Even sales of the new highly touted mirrorless cameras, which were expected to see 15 to 20 percent growth on Black Friday weekend, fell 1.5 percent.

While many in the camera industry were hoping that consumers would continue to buy traditional cameras for lasting, better-quality pictures, Chute said that’s not happening. Consumers don’t care as much about image quality as they do the software that allows them unlimited, immediate sharing on social networks such as Facebook and Instagram, mobile image editing and manipulation, and cloud-based backup. “Image quality is now second to connectivity to Web services like Facebook,” he said.

Still, smartphone camera technology continues to improve.

Even though overall camera sales are declining, analysts aren’t expecting big-box retailers to shutter their photographic departments yet. Instead, they’re shrinking the number of camera options, even in accessories, said Brian Yarbrough, a retail analyst at Edward Jones. Retailers are de-emphasizing camera departments by putting them in less-desirable parts of the store and putting the spotlight on higher-profit-margin items such as smartphones and tablets.

Other camera businesses are feeling the shift as well. Repair shops are disappearing, and those still hanging on are seeing a drop in business. Low-end point-and-shoots aren’t cost-effective for repair, and some manufacturers won’t provide parts to independent shops so they can keep repairs in-house, said Gus Gulbranson of Northwest Camera and Video Repair in Lindstrom, Minn.

His overall business has been decreasing for the past two years. “With the decrease in sales from phones, I’m not expecting that to get much better,” he said.

Few are predicting that traditional cameras will go the way of the eight-track tape, but higher-quality point-and-shoot and SLR cameras will become more of a niche business for hard-core enthusiasts. Retailers are hoping that some customers will still want a piece of hardware to record memorable events.

Chute said that to stay relevant for more customers, today’s camera manufacturers will have to understand the importance of mobility. “They have had opportunities in the past decade, and they haven’t used them. Their obituary is being written.”


 

Click here to comment on this story »