Digital imaging market set to explode, panel says

The digital imaging market will explode in 2004, but the technologies need to overcome a number of hurdles to become more widely accepted, according to industry executives who participated in a panel discussion Wednesday at the Consumer Electronics Show in Las Vegas.

Executives of four companies involved in the industry discussed the problems and potential of digital imaging products, including digital cameras, camera phones, storage media and image management products to store, save and print digital images.

There are a number of problems plaguing the digital imaging market, including lack of compatible hardware and software standards, lack of user education, and the complications involved in using digital imaging products, panelists said.

Users are turned off by the cost of digital imaging products, can't figure out how to operate digital cameras and get frustrated by the number of steps involved in saving and storing digital images, according to Kristy Holch, group director at InfoTrends Research Group Inc., who moderated the panel. But technology-savvy young users are adopting digital imaging products and figuring out how to use them, she said.

Digital camera phones and digital cameras are set to become the hottest-selling digital imaging products in 2004, according to panelists.

Camera phone sales could number 100 million units in 2004, according to Michael Polacek, vice president of imaging at National Semiconductor Corp.

Camera phones, which already outsell digital cameras worldwide, will see higher sales in North America, where the phones haven't yet caught on as well as they have in Japan or Europe, Holch said.

The problem with camera phones, according to Polacek, is a lack of local storage. Also, they cannot print or produce print-quality images, said Mona Furlott, vice president of photo operations at Eckerd Corp., a drug store operator in Clearwater, Florida.

Digital cameras will be bundled into cell phones and their cost will be partly subsidized by cell phone manufacturers and vendors, said Polacek. Female and young consumers love having cell phones and will think of the integrated digital camera as "another tool," said Furlott.

Both Furlott and Polacek voted for digital camera phones as the hottest-selling digital imaging technology in 2004.

Digital cameras, on the other hand, will replace film cameras as they become easier to use, said Scott Nelson, director of product development at Casio Inc.

Worldwide digital camera sales numbered 70 million [M] in 2003, raking in revenue of US$10 billion, according to InfoTrends research. InfoTrends also predicted that by 2008, digital cameras would replace film cameras.

Digital camera sales will drive the sales of photo printers, said Kathy Dow, communications manager at Hewlett-Packard Co. Panelists said users would both print at home and use professional photo printers. "It's like deciding between eating out or cooking at home," Furlott said.

The sheer number of digital images generated in the future will make it tough for the users to print at home, so the best prints will be professionally printed, said Nelson, adding that scrap photographs would be printed at home. In either case, "the number of prints will go up," he said.

Polacek also predicted that CMOS (complementary metal-oxide semiconductor) would replace CCD (charge-coupled device) technology in the future manufacture of digital cameras.

Despite differing views on some issues, the panelists agreed that digital cameras and digital camera phones would coexist in the future, as they perform different functions. A digital camera can take professional-quality photographs, though it is hard to lug around, while a digital camera phone can "capture the moment" effectively, said Dow.

Digital imaging companies need to work together to expand the market, the panelists said. They called for consistency in storage and memory standards and operating systems and an effort to educate users and retailers about the latest digital memory technologies.

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Agam Shah

IDG News Service

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