Business - Lights,Camera,Action

If you thought that very few would want a digital camera after acquiring a cell phone with camera, think again. The market for digicams is Rs 749 crore and growing, at an astounding rate of 26% in value and 45% in volume, according to IDC, India. “Thanks to mobile phone cameras, photography is no longer a special occasion activity,” says a marketing executive with a mobile handset company. “Mobile phones have made camera technology less intimidating.”

Last year, one million units of digicams were sold in India, against the 120 million across the world, with China and India accounting for the bulk of shipments, logging year on year growth of 25% and 50% respectively.

“The rapid transition from analogue to digital makes India one of the fastest growing digicam markets in the world, albeit growing from a smaller base, in comparison to China,” says Alok Bhardwaj, senior vice-president, Canon India, the category leader.

“Analogues,” according to Bhardwaj “are completely over, except in the rural markets. We pulled out of the analogue business last year.” The only active player at the moment, according to market reports, is Kodak that offers combo deals (“One camera with two films free”) mainly to ensure the survival of its film business. “Globally, except for Indonesia and Malaysia, analogues are not on the radar screen of any player,” maintains Bhardwaj. “A big driver for the digital market in India,” according to Prashant Singh, head of marketing for Nikon, is the 30%-40% fall in prices across product categories in the past four-five years.

The entry-level digicams can now be bought for as low as Rs 5,000 to Rs 10,000, with Canon, Sony and Kodak as the biggest players in the segment. The next is the “authentic” category in the price band of Rs 10,000 to Rs 30,000, where Canon and Nikon are the principal players. Next comes the lifestyle category of sleeker, better-looking products available at Rs 15,000 to Rs 30,000, where both Canon and Sony are pitted neck to neck, followed by the professional digital SLR category priced Rs 40,000 and above, where the key players are again, Canon and Nikon.

Nikon has two models in this segment—D-60 and D-80— both targeted at wedding photographers and media professionals. Although a late entrant into this market —almost 14 years after Sony, Canon and Kodak have firmly established themselves—Japanese major Nikon is positioned strongly in the digital SLR segment. This segment caters mainly to the prosumer (coined in 1979 by the futurist Alvin Toffler, the term these days often refers to users midway between consumers and professionals) market. This segment is small (15,000 a year, contributing just 10% to the total still digital camera sales) at the moment but, according to Singh, it is growing fast.

Such is the speed of migration from analogue to digital in the prosumer segment that within days of the launch of Nikon’s P-80 Cool Pix (Rs 22,950) it was a complete sell-out. Armed with 10.1 MP sensor and a whopping 18x zoom, P-80 is targeted at photo enthusiasts who want both sharp resolution and high speed. It clicks up to 13 frames in one second.

“Our target customer is 21 to 35 year old, who likes to travel, is active on social networking sites like Orkut and Facebook falling in SEC A, A+ demographic,” explains Singh. This customer is smitten, for instance, with Nikon’s S-550 model that comes with a smile mode feature wherein the camera clicks only when the subject smiles.

Currently, the grey market in India is big, almost as big as the official market. The duties and taxes in India are much higher than levies in countries like China, say analysts. The countervailing duty, for example, stands at 16% and value added tax at 12.5%. This means the prices of the products are, at times, 40% cheaper in the grey market.

However with “increasing personal computer penetration, availability of a wider range of budget cameras and printing possibilities at home, the official market is now on the upswing,” says Masaru Tamagawa, managing director for Sony India.

So while, after years of spectacular growth, the international market for digital still cameras has begun to level off, in India, photographers and camera-toting consumers are migrating from film to digital.

“Lifestyle migration, the need to see pictures instantly, affordability and the retail boom are also generating demand, besides increase in official camera use at medium and large business houses, government and defence sectors,” adds Tamagawa.

The camera-upgrade movement is focused on powerful image processors, faster analog-to-digital converters, wireless connections for transferring pictures, and, of course, high resolution image sensors.

Ruling out a threat from the camera phone market, Ravi Karamcheti, managing director and country business general manager, consumer digital imaging group, India, for Kodak says, “It’s far more satisfying to click and then print your pictures.”

The big daddy in the movie camera business is of course Sony. Sony’s flagship product Handycam claims about 75% share of the market, trailed by Panasonic, Samsung and Canon. This segment, as claimed by the company spokesperson, is growing at the rate of 12-15% a year.

For greater adoption of movie technology, Sony had begun to focus less on technology and more on emotion. The sandcastle campaign for Handycams thus goes with the tag line “Easy to use. Easy to own.”

The television commercial is shot around two families building sandcastles on a beach. One owns a Handycam; the other doesn’t. No marks for guessing who comes back with “moving” memories for posterity.