Digital Camera Makers Say They're Upbeat About Holiday Sales

Digital camera manufacturers we polled at PhotoPlus Expo in New York Friday said they were upbeat about the coming holiday season due largely to strong, growing demand for digital single lens reflex cameras (DSLRs). Sales of compact digital cameras are flat versus last year, but they said certain features and models, including waterproof cameras targeted at outdoor enthusiasts, are helping to spur demand for some of their compact products.

As usual, there were few new cameras or other products unveiled at PhotoPlus, a show targeted at mainly professional photographers and retailers. But several manufacturers showed new cameras for the first time in the U.S. at the show after introducing them at Photokina in September in Cologne, Germany.

The heavy traffic that Canon saw in the first two days of PhotoPlus was a sign that a “recovery is well under way” for the industry, said Chuck Westfall, Canon technical adviser. “The big story this year is the big splash on digital SLRs,” he said. Canon projected early this year that it would sell 4.9 million DSLR cameras globally in 2010, then in July boosted that forecast to 5.5 million, and boosted it again, to 5.7 million last week, he said. The company expects that about 12.5 million DSLRs will be sold globally industrywide this year, which would be the most SLRs sold in any year, he said. It expects that about 2.8 million of those will be in the U.S., he said. Canon is “doing very well right now” on DSLRs and expects to have about a 50 percent U.S. market share on them again this year, he said. While average selling prices (ASPs) on compact models continue to fall, he said they're “inching up” on DSLRs, growing to about $950 this year from about $865 last year. Compact digital cameras, meanwhile, are selling better than in 2009, although not by a significant amount, he said. It “looks like” the coming holiday season “will be better than ‘09,” after a 2008 that was the “low point” for the category, he said. But DSLR cameras are “taking some of the business” away from higher-end compact digital cameras, while smartphones are taking away some of the business from low-end digital cameras, he said.

"Commoditization continues” with low-end compact digital cameras, said Michael Rubin, director of product marketing for Casio’s Digital Imaging Division. It has become a necessity for manufacturers to “differentiate” their offerings, he said. Certain features, meanwhile, have become a requirement on all models, including movie mode, he said. The megapixel wars also “continue,” he said, telling us there are more 14-megapixel models in his company’s product line this year than in 2009, when 12 megapixels were more common. He predicted ASPs will “creep down” yet again this holiday season in compact models.

Richard Pelkowski, product manager of DSLR and Pen cameras at Olympus predicted there will be plenty of Black Friday bargains in the $100 range among compact cameras. ASPs, however, have “stabilized” in certain categories, specifically models in the $200-$400 range, he said. He expects to see “price erosion” this holiday season in low-end DSLRs. Olympus, meanwhile, is seeing more consumer demand for interchangeable lens cameras in general, including those using the newer Micro Four Thirds mirrorless lens system, he said.

Sony is also “seeing a lot of interest in” mirrorless cameras, said Ernesto Bravo, senior business manager for its AMC Business Unit. There has been “continued growth in the market” for conventional DSLR cameras also, he said.

John Carlson, senior manager of sales and marketing at Pentax, conceded there was growing interest in the mirrorless format. But he said growth was mainly in Japan, and his company had yet to back the format with models. He was “cautiously optimistic” about the coming holiday season, he told us. DSLR camera demand continued to be “very strong,” but that category represents “less than 20 percent of the total” digital camera market, he said. Pentax has grown its market share in DSLRs this year, especially on entry-level models, he said. But, like most manufacturers, he didn’t give market share specifics.

"The economy has been an issue for the last couple of years,” said Kodak spokeswoman Nancy Carr. But she said her company was “in good shape for the holiday season” due to continued strength of the Kodak brand, the ease of use offered by its cameras and other imaging products, and features including the Share Button on all its cameras for 2010. The Share button enables users to tag images and video directly on the camera for easy uploading to Facebook and other social networking sites. The $149 waterproof Pocket Video PlaySport camcorder, meanwhile, has been “a runaway success” for Kodak since it was introduced in July, she said. The company started bundling the camcorder, which offers 1080p HD video, as part of an outdoor kit with accessories in September for $249.95, said Training Manager Brian Fox. It was “still getting data back on” the kit’s sales, he said. Growing, too, in 2010 is the use of 1080p HD for standard digital cameras’ video modes. Nikon added it to two of its new DSLR models this year, after using only 720p in the past, said Lindsay Silverman, its senior product lifecycle manager.

German high-end camera maker Leica continued to see strong demand for its products, said Christian Erhardt, vice president of marketing. It continued to largely be immune to the economic woes and price battles impacting other camera makers, he said. The Leica D-Lux 5, a 10-megapixel camera that shipped last week at $799, and the $849 D-Lux 2, its first camera with 1080i video mode, that also shipped last week were “out of stock right now,” and “back ordered,” he said. They'll be back in stock “hopefully before the holidays,” he said. The M9 that it shipped in October 2009 has been back ordered for more than a year, but Leica “increased our production” and that “should be in stock for the holidays,” he said.