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How is the digital camera market reacting to rising smartphone sales?

By Chris Elliott

The quality of smartphone cameras has vastly improved in the past few years. The average smartphone now includes an 8 megapixel camera (PC World), while the top of the range Nokia Lumia 1020, has a 41 megapixel camera. The improved quality of smartphone cameras, coupled with the fact that two thirds of adults in the UK own a smartphone (Deloitte), has had a significant impact on digital camera sales.

In the first nine months of 2014, the major Japanese manufacturers saw shipments of digital cameras drop by a third. Sales of compact cameras fell 38.1 percent year-on-year (BT.com).

Wee Teck Loo, Head of Consumer Electronics at Euromonitor, attributes smartphone adoption and penetration as the main reasons for falling digital camera sales, in an otherwise growing consumer electronics market – “For the price of an entry level camera [$150 to $200] shoppers are able to buy a mid-range smartphone that provides many more features.”

Analysis of digital camera listings

Brand View has reviewed the number of digital camera listings over the last three years in Argos, Currys, John Lewis and Tesco Direct.

Both Argos and Tesco Direct have increased the number of products listed by 24.5 and 18.7 percent respectively. Conversely, Currys and John Lewis have reduced the number of lines stocked by 5.7 and 9.1 percent.

There was a significant dip in the number of products listed in all retailers in Autumn 2013 preceded by a smaller dip in Autumn 2012. Traditionally, new camera models are launched in February and then again in November, in time for Christmas. The reduction seen in Autumn is due to retailers delisting older models in preparation for the new releases.

number of digital camera listings

Camera listings by type

Standard compact cameras dominated the listings in the retailers analysed; compact camera listings were almost five times greater than digital single-lens reflex (DSLR) listings on 14 July 2015.

Listings of standard compact cameras have increased 24.5 percent in the last three years – the only type of camera with an increased number of listings.

Compact system cameras (CSC) are a lighter, more compact alternative to a DSLR model. Despite the number of CSC listings decreasing by 10.1 percent, this type of camera has overtaken DSLR cameras as the second most listed camera type.

Listings of DSLR cameras have decreased by 17.2 percent in the last three years.

types of digital camera listed

Average number of megapixels by camera type

CSCs have seen the greatest increase in the average number of megapixels per camera, rising from 13.4 MP to 17.6 MP. In 2012, when the analysis begins, CSC technology was relatively new and has since improved, allowing for greater resolution in the cameras.

The average number of megapixels of standard compact cameras has grown 16.5 percent in the last three years. However, nearly 40 percent of the growth has occurred in the last five months. This is due to retailers increasing their listings of 20 MP+ cameras; we expect these listings to further increase throughout the year.

In an effort to target the more avid photographer, and differentiate their offerings from smartphones, it appears that retailers are focusing on listing more technologically-advanced models, rather than low cost cameras.

number megapixel digital camera listings

Competitive pricing in the digital camera category

As multi-category retailers list more technologically-advanced cameras, camera specialists will face increased competition. As a result, retailers such as Calumet Photographic, Park Cameras and Wex Photographic may be forced to compete aggressively on price and make sure shoppers understand how they offer a superior service.

Currently, specialist retailers are able to compete with Argos, Currys and John Lewis and even beat their prices on a number of occasions. However, if the multi-category retailers continue to focus on more advanced cameras it may become increasingly challenging to compete.

image00Brand View Daily Prices and Promotions 14 July 2015


How will the market develop?

The increasing quality of smartphone cameras does not seem to have deterred retailers from growing their digital camera listings; Argos and Tesco Direct have both increased their listings.

All retailers appear to be increasing the listings of high megapixel cameras in an effort to target different shoppers and distance their offerings from smartphones.

In the coming months Brand View predicts that the average number of megapixels of standard compact cameras will continue to increase as the latest models are released.

DSLR cameras face an uncertain future as trends appear to indicate that many shoppers are switching to smaller CSCs. As such, it is likely that the number of DSLR listings may fall in the multi-category retailers, with a focus on the higher resolution DSLRs.

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