APAC camera makers need brand, innovation revamp

As sales of digital cameras fall in developed Asian markets against the surge in smartphones, manufacturers should highlight benefits of cameras in marketing campaigns, reexamine consumers' mobility needs for innovation and target emerging markets instead.

According to figures from Japan's Camera and Imaging Products Association, global shipments of Japanese digital cameras sank by about 42 percent to 7.85 million units in September 2012 compared with the previous year, while higher-end cameras with detachable lens fell 7.4 percent.

The downward spiral was especially noticeable in developed markets, observed Mykola Golovko, consumer electronics analyst at Euromonitor. In South Korea, she noted that camera volume sales were expected to decline 5 percent in 2012 and to continue falling in preceding years, according to Euromonitor's research.

The convenience and low cost had been key selling points for small fixed-lens digital cameras, which used to be popular among consumers, Golovko explained. However, with cameras now built into most smartphones--a device which consumers carry with them all the time--this eliminated much of the value proposition of digital cameras, she said.

Smartphone benefits outweigh digital cameras
Most consumers are also aware using a camera phone implies a "sacrifice" in image quality, but most do not find this significant enough to spend extra money to purchase a camera and end up relying on their phone as their sole camera option, Golovko noted.

This is due to inadequate messaging about the benefits of owning a camera, she said. "Most camera advertisements focus on usage cases featuring pictures of children at play or families enjoying beach-side vacations, yet, most consumers are comfortable using camera phones across all common usage scenarios," she explained.

One smartphone user, Yang Yanyi, said she stopped buying digital cameras because she was "not a photography buff" and the quality of her smartphone's camera was good enough for her daily activities and events.

Despite this growing trend, however, Golovko remarked it was unlikely smartphones with camera capabilities would replace digital cameras completely.

Elaborating, Sacha Cody, head of client solutions at Millward Brown, said there will always be a segment of consumers who want to separate their devices, unlike the majority who choose multi-function devices.

"They will still prefer a camera for special occasions such as overseas travel, but use their mobile camera for daily usage and [to post photos on] mobile social networking, for example," he said.

Rebrand, revamp camera innovation
To stay relevant in the market, digital camera vendors must start thinking about rebranding and refocusing on innovation.

For instance, a marketing campaign highlighting the image quality difference between phones and cameras, as well as the value consumers can derive from this difference will make a "much more compelling argument", Golovko noted.

Cody pointed out mobility is increasingly used as an attachment to consumer lifestyle and everyday behavior, including watching videos, surfing the Web, social networking, and playing games. Cameras should hence listen to consumer needs to drive innovation, he said.

The Samsung Galaxy camera, for instance, is a good comeback with product innovation, said Deepender Rana, Africa, Middle East and Asia-Pacific chief client officer at Millward Brown. It has 3G capabilities, is Android-driven, and has the capability to upload directly to a user's preferred social network, he noted.

The Korean vendor was also "smart" in using the Galaxy sub-brand name, which is recognized by consumers and shared by the Galaxy S3 and Galaxy Notesmartphones, Rana added.

Golovko said there is also potential for camera sales to grow in emerging markets.

While smartphones and camera phones are proliferating rapidly in these markets, this is largely on the back of low-cost models with poor cameras, so consumers can still drive sales of cheap digital cameras, she explained.

Cody agreed. Delving into China specifically, he noted the country has many consumers with lower incomes and in lower product tiers, so digital cameras are likely to be popular among them.

While contacted, Samsung and Canon did not respond with comments.