Will Smartphones Kill Cameras?

by Emily on October 30, 2013

in Articles

The cameras on smartphones have come a long way since those grainy 2 megapixel photos from the first iPhones. For instance, the [tp lang=”en” only=”y”]Galaxy S4[/tp][tp not_in=”en”]Galaxy S4[/tp] now has a resolution of 13 megapixels, and the latest Nokia model has an astonishing 41. The question is whether this new generation of high resolution smartphone cameras is going to spell the end for the camera industry.200541194-001

Point-and-shoot cameras have long been in trouble – sales fell off the cliff as smartphone cameras’ quality rose. Camera manufacturers such as [tp lang=”en” only=”y”]Canon[/tp][tp not_in=”en”]Canon[/tp] and Nikon responded by refocusing on the high-end market – specifically DSLR cameras. This strategy appeared to be paying off – sales in the category have continued to rise for the last 10 years. The conventional wisdom said that these cameras were for photography enthusiasts and professionals such as Rita Villanueva, who you can read about in [tp lang=”en” only=”y”]Francesco Corallo’s blogposts[/tp][tp not_in=”en”]Francesco Corallo’s blogposts[/tp]. Enthusiasts and professionals don’t compromise on quality.

Shockingly, that strategy now seems to be coming apart. DSLR camera sales have started to decline for the very first time, putting camera manufacturers’ high-margin businesses at significant risk. According to Christopher Chute, who heads up worldwide digital imaging research at IDC, “You’re talking about a 10–15% decline in DSLR shipments all over the world.” It also appears that the rate of decline is accelerating, as global sales of cameras with interchangeable lenses – including DSLRs – fell by 10.9% in the second quarter of 2013, down to a paltry 4 million units.

The impact of this decline is already being felt on the stock markets. Nikon shares have plummeted by 33% so far in 2013. Canon has other lines of business, such as office equipment and copiers, but they still saw a more modest 7% decline. Nikon recently announced a five-year plan to combat this radical change in market conditions, but the real question is whether they are going to be around long enough to implement it.

Part of the problem appears to be that consumers do not care as much about image quality as they used to. They are willing to accept slightly lower quality for many more software-driven smartphones features, such as burst-mode shooting and slow-motion video. In addition, the image processing algorithms used in smartphones have improved dramatically over recent years, allowing things such as colour temperature and flash intensity to be adjusted automatically in real time. There are also apps that provide advanced capabilities such as HDR, where multiple photographs are taken in rapid succession at different exposure levels and then are knitted together – bringing out detail in dark areas while avoiding overexposure in light ones.

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This situation is being made even worse by tight integration of photography and social media. While the original hypothesis underlying continued DSLR growth was that smartphones would get people interested in photography, and therefore get them to upgrade to DSLRs, it appears that the opposite is the case. People have become interested in social media, and have decided that the camera quality is good enough.

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