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Smartphones are Killing the Digital Camera Industry

Point-and-shoot sales have stayed consistent over time while smartphone growth has been booming. Chart from Bloomberg.com.

Digital cameras have been on the decline for almost a year now, but that decline is more noticeable than ever as smartphones with high-resolution cameras become the one-stop device for taking photos and recording video.

And it’s easy to see why: the iPhone reportedly has a more sophisticated camera than most point-and-shoot cameras — and the iPhone 4S takes photos at a 60-percent-higher resolution than the iPhone 4. Nokia has claimed it has a phone that shoots at five times higher resolution than that.

Just take a look at the Flickr camera stats (graph below). As of yesterday, the leading point-and-shoot camera, the Canon Powershot, had 637 Flickr users uploading photos. In comparison, 5,497 users uploaded photos from an iPhone 4. Point-and-shoot cameras don’t even appear on the list of top five Flickr cameras. (The top five point-and-shoot devices only had 2,288 users combined. See top point-and-shoot cameras here.)


iPhone leads in the top five cameras used on Flickr. There are no point-and-shoot cameras on this list. Graph from Flickr.com

Bloomberg predicts that camera sales will drop 4.3 percent to their lowest level since 2009. In contrast, they’re expecting smartphone sales to grow by 35 percent this year. That shift almost hearkens back to the “Good Enough Revolution,” an idea put forth by Wired in 2009:

“The world has sped up, become more connected and a whole lot busier. As a result, what consumers want from the products and services they buy is fundamentally changing. We now favor flexibility over high fidelity, convenience over features, quick and dirty over slow and polished. Having it here and now is more important than having it perfect.” —Robert Capps, for Wired

This quote makes it sound like convenience was the only factor in the Good Enough Revolution. While that’s partially true, a stronger factor back in 2009 was that users were wiling to sacrificing quality for that convenience. At that time, we didn’t have the technical prowess we have now — so with the emergence of high-quality and convenient cameras, there’s no question that the people embracing the Good Enough Revolution in 2012 not only require more convenience, but also better devices. A device that rolls that all (and more) into one is just what that population demands. Enter the smartphone.

Which brings us again to the decline of the point-and-shoot industry. High-end SLR cameras seem to be safe — they legitimately shoot better photos than any phone. However, they seem to be have a small niche of serious hobbyist photographers and professional shutterbugs. For the general public, a smartphone is far better than “good enough.”

We’ve seen similar shift in the last few years, albeit on a slightly smaller scale: smartphones also killed the Flip camera, the popular handheld device that dominated the digital camcorder industry between 2007 and 2009. In April of 2011, Cisco shut the doors on its manufacturing in one of the shortest technology life cycles the industry has seen yet — a mere four years between the rise and fall of the device. Most credit the Flip’s demise to the rise of the smartphone — what Brent Bracelin, an analyst with Pacific Crest Securities, calls “one of the most disruptive trends we’ve seen,” in a New York Times article.

And disruptive it shall continue to be. Could we see something similar in the coming years, as smartphones take on digital cameras? We’re not ready to say yes for certain. But we wouldn’t be surprised.

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