Camera Phones: Handsets Hot, Prints Not
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1 Camera Phones: Handsets Hot, Prints Not Jill Aldort Senior Consultant, InfoTrends/CAP Ventures 1
2 Phones are not just for calls anymore MUSIC Sony Ericsson W800 Walkman MP3/AAC player FM radio Built-in stereo speakers IMAGING Software to transfer music Samsung a MP camera 2MP camera 2x optical/10x digital zoom Auto focus Camcorder PictBridge GAMING Kyocera Slider Remix KX5 Plugs into Gamepad MP3 player 1.3MP camera 2
3 Camera wins over other next-generation applications Rank of how often features on phone are used (1 = most often) North America Western Europe Japan China Text messaging Camera for taking pictures MMS Games PDA function Web browsing/ Internet Video clips Access online photo albums MP3 player Source: InfoTrends 2004 Mobile Imaging Multi Client 3
4 Worldwide Camera Phone Shipments EMEA is the Largest Region 1, North America EMEA Japan Asia Pacific ROW % CAGR *Source: InfoTrends 2005 Worldwide Camera Phone Forecast 4
5 Asia-Pacific Closes the Gap With EMEA 100% % of Units Shipments 80% 60% 40% 22% 29% 32% 40% 36% 33% Rest of World Asia-Pacific Japan EMEA North America 20% 0% *Source: InfoTrends 2005 Worldwide Camera Phone Forecast 5
6 Worldwide Camera Phone Revenue EMEA is the Largest Region $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 North America EMEA Japan Asia Pacific ROW $45,566 $74,281 $84, % CAGR 6
7 More phones contain cameras than not 2007: 884m handsets 659m camera phones (75%) 2009: 992m handsets 847m camera phones (85%) 2005: 742m handsets 370m camera phones (50%) Mobile phones Camera phones Worldwide Mobile Phone Shipments (millions) *Source: InfoTrends 2005 Worldwide Camera Phone Forecast 7
8 The WW handset revenue market flattens by 2010? ($ billions) $90 $80 $70 $60 $50 $40 $30 $20 $10 $123 $ % $ % $113 $84.4 $100 $140 $120 $100 $80 $60 $40 $20 Handset revenue Average selling price $0 $ *Source: InfoTrends 2005 Worldwide Camera Phone Forecast 8
9 Image quality takes a giant step forward Resolution Auto focus Optical zoom 69% feature 3.0+ megapixel resolution MP MP MP MP Sub-1.0 MP Worldwide Camera Phone Megapixel Resolution (% of unit shipments) *Source: InfoTrends 2005 Worldwide Camera Phone Forecast 9
10 Widespread availability of camera phones is apparent, but How are consumers using the camera function? How are they sharing pictures? How are they printing pictures? Which consumers are capturing/sharing/printing? What does the future look like? 10
11 Who did we survey? 1,881 U.S. Internet users in September % Camera Phone users 50% Female, 50% Male $54,000 average household income Average age: 37 10% under 18, 18% % have children under 21 living at home 11
12 29% of U.S. Internet users own a camera phone 24% 29% 18% are already repeat buyers 18% 3% September 2003 September 2004 June 2005 September 2005 *Source: InfoTrends 9/03, 9/04, 6/05, 9/05 U.S. Internet User Surveys 12
13 Camera phone owners are young and techno-savvy Average age HH income Children under 21 Own ipod Wireless home network Own a point & shoot DSC Camera phone user 33 $59K 60% 41% 37% 50% Regular cell phone user 39 $55K 51% 23% 23% 49% *Source: InfoTrends 9/05 Camera Phone Survey 13
14 Young camera phone owners are the most active < Primary phone is camera phone 32% 45% 30% 28% 23% 13% Repeat buyer 19% 27% 23% 8% 11% 7% Use camera function at least once a week 78% 64% 59% 47% 44% 20% Photos taken per month Photo message at least once a week 41% 28% 28% 21% 12% 14% Print 26% 20% 19% 18% 19% 16% Percent printed 40% 35% 20% 15% 25% 15% =heavy users =medium users =light users *Source: InfoTrends 9/05 Camera Phone Survey 14
15 Imaging and fun are no longer the big sell What motivated you to purchase a camera phone? (multiple responses) Base=542 camera phone owners in 2005; 290 in % 20% 40% 60% 80% For fun 38% 67% To always have a camera with me 31% 45% To take spontaneous pictures To have new technology I selected the phone for other features and it included a camera 38% 43% 30% 38% 30% 34% Upgraded from old cell phone 34% 52% On promotion from my carrier 19% 23% *Source: InfoTrends 9/04, 9/05 Camera Phone Surveys 15
16 Still, one-third use the camera more than any other function on their phone What is the one feature you use most often on your camera phone, besides making or receiving phone calls? Base=542 camera phone owners in 2005; 290 in 2004 #1 Camera for taking pictures 34% 35% Text messaging 24% 32% Games Downloadable music 4% 11% 10% 7% % 7% Web browsing/internet 3% 6% 0% 10% 20% 30% 40% *Source: InfoTrends 9/04, 9/05 Camera Phone Surveys 16
17 The percentage of camera owners who share and print photos is decreasing 100% 80% September 2004 September % 72% 60% 40% 20% 42% 20% 0% Print Send pictures via or MMS Percentage of camera phone owners *Source: InfoTrends 9/04, 9/05 U.S. Internet Surveys 17
18 The number of images captured per person has dropped by more than half September 2004 September Images captured per month *Source: InfoTrends 9/04, 9/05 U.S. Internet Surveys 18
19 The percentage of photos shared and printed does not compensate 100% 80% September 2004 September % 40% 22% 27% 29% 22% 20% 0% Printed Sent via or MMS % photos captured that are shared and printed (among those who do) *Source: InfoTrends 9/04, 9/05 U.S. Internet Surveys 19
20 More than half of those who haven t printed show signs of promise Base=396 camera phone users who do not print No, I didn't realize I could print my camera phone images, but I would like to 20% I tried it once or twice and won't do it again 6% No, I plan to but haven't tried it yet 44% No, I have no interest in it 30% *Source: InfoTrends 9/05 U.S. Internet Survey 20
21 The number of prints made will still increase 5x over (billions) : 6.8B (12%) shared 4.6B10% printed 10 (billions) : 11% shared (8%) printed : 1.7B (9%) shared 1.2B (6%) printed Captured Printed Shared North America Camera Phone Images Captured, Shared, and Printed *Source: InfoTrends 2005 Worldwide Camera Phone Forecast (preliminary) 21
22 Why will photos shared and printed increase? 1. Large volume of camera phone users who plan to print 64% plan to/would like to print 2. Improving image quality 90% of the installed base is still VGA quality or less 3. Lowering costs for photo messaging and printing All-inclusive data plans Print price competition 4. Simpler means for sharing and printing Cross-carrier interoperability More direct printing options 22
23 The number of prints made will still increase close to 3x from 2005 to : 37.1B (13%) shared 19.9B (7%) printed (billions) : (13%) shared (6%) printed (billions) : 13.2B (13%) shared 5.9B (6%) printed 20 Captured Printed Shared Worldwide Camera Phone Images Captured, Shared, and Printed *Source: InfoTrends 2005 Worldwide Camera Phone Forecast 23
24 Have or will camera phones impact digital still camera usage??? 24
25 It already has just slightly How has using a camera phone affected your DIGITAL CAMERA usage? Base=297 camera phone and DSC owners Decrease Decrease Increase Increase -2 significantly -1 No Change 0 1 Significantly 2 slightly Slightly Total number of digital camera pictures taken Total number of digital camera pictures printed All camera phone users Own camera phone <=6 months Own camera phone > 6 months Total number of digital camera pictures saved long-term *Source: InfoTrends 9/05 Camera Phone Survey 25
26 But most people say they are loyal to their DSCs If the image quality of a camera phone was equal to the image quality of a DSC, which statement would be most true? Base=297 camera phone and DSC users I would use my DSC less and my camera phone more 26% Neither my camera phone or DSC usage would change 32% I would take more camera phone photos, but my DSC usage would not change 42% *Source: InfoTrends 9/05 Camera Phone Survey 26
27 If anything, future DSC sales could be positively impacted How has your digital camera purchase timeframe changed since owning a camera phone? Base=188 camera phone owners who do not own a DSC Not at all 44% I am delaying the purchase of a digital camera because I can use my camera phone instead 18% I am planning on buying a digital camera sooner than I originally anticipated because I really like experimenting with digital photography I am planning on buying a digital camera sooner than I originally anticipated because my camera phone doesn t offer good enough quality I am planning on buying a digital camera sooner than I originally anticipated because I want more functionality in my camera 10% 10% 18% 38% will buy a DSC sooner than anticipated! 0% 10% 20% 30% 40% 50% *Source: InfoTrends 9/05 Camera Phone Survey 27
28 Worldwide End User Data Worldwide mobile imaging survey 4,782 respondents (2,335 NA, 1,300 W. Europe, 449 Japan, 698 China) Conducted October
29 Motivation For Camera Phone Purchase What motivated you to acquire a camera phone? (Check ALL that apply) Percentage of respondents 60% So I can always have a camera with me I like to have new, interesting technology 40% 20% I selected the phone for other features and it included a camera I want to share pictures with other people that have a camera phone The service plan I selected included a camera phone For business purposes 0% North America Western Europe Japan China N = I want to use a camera phone instead of a film or digital still camera Source: InfoTrends 2005 Mobile Imaging Multi Client 29
30 Digital image capture is down from 2004 to 2005 Approximately how many pictures do you take per month with your camera phone? With your DSC? Median pictures per month 40 Camera phone DSC North America '04 North America '05 Western Europe '04 Western Europe '05 Japan '04 Japan '05 China '04 China '05 Source: InfoTrends 2005 Mobile Imaging Multi Client 30
31 Camera phones drive digital image capture If the image quality of a camera phone began to get closer to a digital still camera or film camera, which statement would be most true for you? Percentage of respondents 100% 80% 49% 46% 31% 15% 27% Nothing would change. I will continue using my camera phone and other cameras for the same amount and types of photos 60% 40% 18% 19% 27% I will use one of my other cameras less (film or digital), and my camera phone more 20% 0% 58% 33% 35% 42% North America Western Europe Japan China I will take more & different photos with my camera phone, but use my other cameras (film or digital) about the same N = Source: InfoTrends 2005 Mobile Imaging Multi Client 31
32 So what needs to happen to maximize the camera phone opportunity? 1. Get more people to share and print 2. Get people to share and print more 32
33 How do we do it? It must be easy To take pictures To take GOOD pictures To share pictures To print pictures It must be inexpensive To buy handsets To share pictures To print pictures 33
34 Conclusions Consumers like imaging function, but have not changed behavior Always have camera Instant sharing Quality and ease of use not meeting requirements Camera phones approaching critical functionality 3 to 5 mega pixel sensor + flash + 2 to 4X optical zoom DSC vendors continue to move up market resolution, zoom, flash, wireless features 34
35 Conclusions DSCs and camera phones will co-exist Form factor; consumer desire for optimized device vs. multi-function device Print opportunity has been limited Low quality images, not convenient, consumer preference to view Not likely to change unless quality and convenience improve Carriers still trying to figure out how to monetize opportunity Significant product costs Insufficient revenue from sharing; limited print play Other services becoming more attractive (Web, music, TV) 35
36 Thank you! Questions? 36
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