Dec 27, 2005 (11:12 AM EST)
Camera Phones To Remain Hot: Study

Read the Original Article at InformationWeek

SAN JOSE, Calif. — The camera-enabled cellular phone market is booming, as shipments are expected to reach nearly 1 billion units by the end of this decade, according to a new report.

In total, the market for camera-enabled cellular phones is expected to grow from 225 million units in 2004, to 365 million units in 2005, to 475 million in 2006, to 600 million in 2007, to 780 million by 2008, according to the report from IC Insights Inc. (Scottsdale, Ariz.).

Clearly, camera phones are becoming a bigger part of the overall handset market. In 2005, some 45 percent of all handsets shipped are expected to be camera-enabled products, up from 34 percent in 2004, according to the report.

In 2006, 54 percent of all handsets shipped will be camera-enabled phones, according to the report. In 2007, 62 percent of all handsets shipped will be camera-enabled phones, according to the report. And in 2008, some 68 percent of all handsets shipped will be camera-enabled products, according to the report.

By 2009, camera-equipped cellular phones are forecast to represent almost three-fourths of the total handset market. At that time, camera-enabled handset shipments are expected to reach 910 million units, according to the report.

There are other interesting patterns developing in the marketplace. Historically, Japanese cellular subscribers have been especially receptive to more features added to their handsets.

The cellular handset market in Japan is up 27 percent to 52 million units in 2005, as compared to 2002, according to the report. The Japanese digital-camera-equipped cell phone market has more than doubled, growing from 19 million units in 2002 to 47 million units in 2005, according to the report.

“Although the Japanese market was the ‘early adopter’ of the camera phone, it is estimated that the Japanese market will represent only about 13 percent of the total demand for camera-equipped handsets in 2005, down from 95 percent just three years earlier in 2002,” according to IC Insights. “One of the pleasant surprises in the cellular phone industry over the past couple of years has been the significant popularity of the camera phone outside of Japan.”

Moreover, the quality of the camera in the cellular handset is increasing dramatically. In early 2002, most camera phones offered 300,000-pixel images. Then, in 2004, Japan’s Casio introduced a camera-equipped cellular phone that offered 3.2 million pixel autofocus imaging capability.

Korea’s Samsung Electronics Co. Ltd. began shipping its SCH-770, the world’s first 7.4 million-pixel camera-equipped cell phone in mid-2005. This handset was priced at over $900.

The high-resolution versions of camera phones are forecast to go from representing only about 4 percent of the 2004 camera phone market to almost 95 percent of the market by 2009, according to IC Insights.