Point-and-Shoot Cameras Still Seen Losing Share to Smartphones

Smartphones continue to “steal” market share from portable game players and point-and-shoot digital cameras, according to data from ABI Research. Annual shipments of handheld game players are on track to drop 4 percent worldwide in 2012 compared to last year and nearly 13 percent in the more mature North American market, ABI said. Digital camera shipments are expected to fall more than 11 percent in 2012 compared with 2011 and nearly 20 percent in the North American market, it said.

Smartphone cameras are supplanting digital cameras for some consumers, and in portable gaming, many casual gamers are being satisfied by game access offered by smartphones, according to Michael Inouye, senior ABI analyst. Many gamers “in the middle” between casual and core users are using smartphones over portable game systems, Inouye told us.

Hardware makers’ attempts to compete with smartphones by adding wireless connectivity to gaming devices and cameras face “many challenges,” Inouye noted. How well these bridge products will do -- including Sony’s PlayStation 3G Vita portable, which gives users access to the email and the Internet, and Samsung’s Android-based Galaxy Camera with Internet access and apps -- will be “up to the carriers” and the products and features they offer, Inouye said.

The 3G Vita did “very well at launch” earlier this year due to bundles that helped move the cellular models, but more recent holiday bundles have favored the Wi-Fi-only model, he said. In many cases online gaming isn’t possible over a mobile connection, he said, and there are limitations in the ability to download games to portables as well, he said. “The 3G doesn’t have a great deal of value for what it was expected to be,” Inouye said. For both the 3G Vita and Samsung’s cellular-based Galaxy Camera, data plans add extra cost to a share plan, giving consumers another reason to pause before buying, he said. Consumers with share plans can typically add a connected device to the mobile plan for $5-$10 a month, he said. But the data used on the additional devices take data allotment from a smartphone or tablet that’s also part of the shared plan, he said. “If you want to upload a higher quality picture, you're going to start chewing away quite a bit of the data,” he said.

Hardware costs, too, factor into consumers’ enthusiasm for products whose functionality can be achieved with a smartphone, Inouye said. For the nearly $600 price of the Samsung Galaxy Camera, “you could get a digital SLR with much better quality pictures,” he said. Verizon was selling the camera on its site Tuesday for $549, with a limited time $35 discount, but with new lines of service only, we found. AT&T was selling it Tuesday for $499.

Portable game players still have an opportunity to set themselves apart from smartphones, Inouye said, because they tout “adequate differentiators” such as game franchises and superior user interfaces. Nintendo’s 3DS “has sold well,” he said, while holding out hope that Sony’s Vita could be a “late bloomer” with a price cut that would “help spur demand.” The 3G Vita was selling in a bundle at Amazon Tuesday for $375, and in a different bundle at Best Buy for $299, but “if they could get it to $150, it would be a big win,” Inouye said. For connected digital cameras to succeed, meanwhile, typical camera differentiators -- “picture quality and lens attributes” -- could be the ticket, he said.