Camera Phones: Handsets Hot, Prints Notkeypointintelligence.jp/pdffiles/1206/2 CP session...27 If anything, future DSC sales could be

197 Libbey Industrial Parkway Suite 300 Weymouth, Massachusetts 02189 www.infotrends-rgi.comCopyright © 2005 InfoTrends/CAP Ventures

Jill AldortSenior Consultant, InfoTrends/CAP Ventures

Camera Phones: Handsets Hot, Prints Not


Phones are not just for calls anymore

MUSICSony Ericsson W800 “Walkman”

• MP3/AAC player•FM radio

•Built-in stereo speakers•Software to transfer music

• 2.0MP camera

GAMINGKyocera Slider Remix KX5

• Plugs into Gamepad• MP3 player

• 1.3MP cameraIMAGING

Samsung a940• 2MP camera

•2x optical/10x digital zoom•Auto focus

• Camcorder• PictBridge


Camera wins over other next-generation applications

1091010MP3 player

9898Access online photo albums

8789Video clips

7176Email

6367Web browsing/ Internet

4455PDA function

3543Games

5634MMS

2221Camera for taking pictures

11012Text messaging

ChinaJapanWestern EuropeNorth America

Source: InfoTrends’ 2004 Mobile Imaging Multi Client

Rank of how often features on phone are used (1 = most often)


Worldwide Camera Phone Shipments –EMEA is the Largest Region

*Source: InfoTrends’ 2005 Worldwide Camera Phone Forecast

0

100

200

300

400

500

600

700

800

900

1,000

2005 2007 2009

North AmericaEMEAJapanAsia PacificROW

29%CAGR

370

522

847


Asia-Pacific Closes the Gap With EMEA

40% 36% 33%

22% 29% 32%

0%

20%

40%

60%

80%

100%

2005 2007 2009

% o

f Uni

ts S

hipm

ents

Rest of WorldAsia-PacificJapanEMEANorth America



$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000$90,000

2005 2007 2009

North AmericaEMEAJapanAsia PacificROW

$45,566

$74,281

$84,396

24%CAGR

Worldwide Camera Phone Revenue –EMEA is the Largest Region


More phones contain cameras than not

2005 2006 2007 2008 2009

Mobile phonesCamera phones

Worldwide Mobile Phone Shipments (millions)


2005:742m handsets

370m camera phones (50%)

2009:992m handsets


2007:884m handsets



The WW handset revenue market flattens by 2010?

$45.6

$74.3

$84.4

$100

$113

$123

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2005 2007 2009$0

$20

$40

$60

$80

$100

$120

$140

HandsetrevenueAverageselling price


($ billions)

+63%

+14%


2003 2004 2005 2006 2007 2008 2009

5.0+ MP3.0 - 4.9 MP2.0 - 2.9 MP1.0 -1.9 MPSub-1.0 MP

69% feature 3.0+ megapixel

resolution

Worldwide Camera Phone Megapixel Resolution (% of unit shipments)

Image quality takes a giant step forwardResolution Auto focus Optical zoom



• 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?

Widespread availability of camera phones is apparent, but…


Who did we survey?

• 1,881 U.S. Internet users in September 2005

• 29% Camera Phone users• 50% Female, 50% Male• $54,000 average household income• Average age: 37

– 10% under 18, 18% 18-24• 53% have children under 21 living at

home


29% of U.S. Internet users own a camera phone

29%

24%

18%

3%

September2003

September2004

June 2005 September2005

*Source: InfoTrends’ 9/03, 9/04, 6/05, 9/05 U.S. Internet User Surveys

18% are already repeat buyers


Camera phone owners are young and techno-savvy

23%37%Wireless home network

23%41%Own iPod

49%50%Own a point & shoot DSC

3933Average age

$55K$59KHH income

51%60%Children under 21

Regular cell phone userCamera phone user

*Source: InfoTrends’ 9/05 Camera Phone Survey


Young camera phone owners are the most active

768101419Photos taken per month

16%19%18%19%20%26%Print

20%44%47%59%64%78%Use camera function at least once a week

15%25%15%20%35%40%Percent printed

12%

11%

23%

45-54

21%

8%

28%

35-44

28%

23%

30%

25-34

13%45%32%Primary phone is camera phone

7%27%19%Repeat buyer

14%28%41%Photo message at least once a week

18-24<18 55+


=heavy users =medium users =light users


“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 2004

38%

31%

38%

30%

30%

52%

19%

67%

45%

43%

38%

34%

34%

23%

0% 20% 40% 60% 80%

For fun

To always have a camera with me

To take spontaneous pictures

To have new technology

I selected the phone for other features and itincluded a camera

Upgraded from old cell phone

On promotion from my carrier

20052004

*Source: InfoTrends’ 9/04, 9/05 Camera Phone Surveys


Still, one-third use the camera more than any other function on their phone

3%

3%

4%

10%

32%

35%

6%

7%

7%

11%

24%

34%

0% 10% 20% 30% 40%

Webbrowsing/Internet

Email

Downloadablemusic

Games

Text messaging

Camera for takingpictures

20042005

“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

*Source: InfoTrends’ 9/04, 9/05 Camera Phone Surveys


The percentage of camera owners who share and print photos is decreasing

42%

83%

20%

72%

0%

20%

40%

60%

80%

100%

Print Send pictures via emailor MMS

September 2004September 2005

Percentage of camera phone owners

*Source: InfoTrends’ 9/04, 9/05 U.S. Internet Surveys


The number of images captured per person has dropped by more than half

28.7

11.5

0

5

10

15

20

25

30

Images captured per month




22%29%27% 22%

0%

20%

40%

60%

80%

100%

Printed Sent via email or MMS


% photos captured that are shared and printed (among those who do)

The percentage of photos shared and printed does not compensate



More than half of those who haven’t printed show signs of promise

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 again6%

No, I have no interest in it

30%

No, I plan to but haven't tried it yet

44%

Base=396 camera phone users who do not print

*Source: InfoTrends’ 9/05 U.S. Internet Survey


North America Camera Phone Images Captured, Shared, and Printed

20

59

0

10

20

30

40

50

60

70

2005 2007 20090

2

4

6

8

10

CapturedPrintedShared

The number of prints made will still increase 5x over

(billions) (billions)

*Source: InfoTrends’ 2005 Worldwide Camera Phone Forecast (preliminary)

2009:6.8B (12%) shared4.6B10% printed

2005:1.7B (9%) shared1.2B (6%) printed

2007:11% shared(8%) printed


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


103

282

0

50

100

150

200

250

300

2005 2007 20090

10

20

30

40

CapturedPrintedShared

The number of prints made will still increase close to 3x from 2005 to 2009

(billions) (billions)




2007:(13%) shared(6%) printed

Worldwide Camera Phone Images Captured, Shared, and Printed


Have or will camera phones impact digital still camera usage?

??


It already has – just slightly

Total number of digital camera pictures saved long-term

Total number of digital camera pictures printed

Total number of digital camera pictures taken

-2 -1 0 1 2

All camera phone usersOwn camera phone <=6 monthsOwn camera phone > 6 months

Decrease significantly No Change

Increase Significantly

Decrease slightly

Increase Slightly

“How has using a camera phone affected your DIGITAL CAMERA usage?”

Base=297 camera phone and DSC owners



But most people say they are loyal to their DSCs

Neither my camera phone or DSC usage would

change32%

I would use my DSC less and my

camera phone more26%

I would take more camera phone photos, but my

DSC usage would not change

42%

“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



If anything, future DSC sales could be positively impacted

10%

10%

18%

18%

44%

0% 10% 20% 30% 40% 50%

I am planning on buying a digital camera soonerthan I originally anticipated because I want more

functionality in my camera

I am planning on buying a digital camera soonerthan I originally anticipated because my camera

phone doesn’t offer good enough quality

I am planning on buying a digital camera soonerthan I originally anticipated because I really like

experimenting with digital photography

I am delaying the purchase of a digital camerabecause I can use my camera phone instead

Not at all

“How has your digital camera purchase timeframe changed since owning a camera phone?”

Base=188 camera phone owners who do not own a DSC


38% will buy a DSC

sooner than anticipated!


Worldwide End User Data

• Worldwide mobile imaging survey– 4,782 respondents (2,335 NA, 1,300 W.

Europe, 449 Japan, 698 China)– Conducted October 2005


Motivation For Camera Phone Purchase

0%

20%

40%

60%

North America Western Europe Japan China

So I can always have acamera with me

I like to have new,interesting technology

I selected the phone forother features and itincluded a cameraI want to share pictureswith other people thathave a camera phoneThe service plan I selectedincluded a camera phone

For business purposes

I want to use a cameraphone instead of a film ordigital still camera

What motivated you to acquire a camera phone? (Check ALL that apply)

Percentage of respondents

N = 600 736 364 529

Source: InfoTrends 2005 Mobile Imaging Multi Client


Digital image capture is down from 2004 to 2005

20

5

15

6 5 5

20

16

25

20

30

25

15

10

30 30

0

10

20

30

40

NorthAmerica '04

NorthAmerica '05

WesternEurope '04

WesternEurope '05

Japan '04 Japan '05 China '04 China '05

Camera phone DSC

Approximately how many pictures do you take per month with your camera phone? With your DSC?


Median pictures per month


Camera phones drive digital image capture

33% 35% 42%58%

18% 19%

27%

27%49% 46%

31%15%

0%

20%

40%

60%

80%

100%

North America Western Europe Japan China

Nothing would change. I willcontinue using my cameraphone and other camerasfor the same amount andtypes of photos

I will use one of my othercameras less (film ordigital), and my cameraphone more

I will take more & differentphotos with my cameraphone, but use my othercameras (film or digital)about the same

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

N = 1636 1300 449 698



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


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


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


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)


Thank you!

Questions?

Documents

Camera Phones: Handsets Hot, Prints Notkeypointintelligence.jp/pdffiles/1206/2 CP session...27 If anything, future DSC sales could be