Everyone wants to buy a camera phone

The camera phone market is skyrocketing with worldwide annual shipments up more than 200 per cent in 2004, a new report has said.

According to In-Stat/MDR, this rapid success is being fueled by manufacturers offering camera features in most new models, and improving image quality.

"The devices have gone mainstream in less than four years," says In-Stat/MDR analyst Neil Strother. "Now, one needs to look hard to find a handset that doesn't feature an embedded camera."

Despite the popularity of the picture phones, the hoped-for economic boost from photo sharing, storage, and related applications has yet to take hold for many carriers. Carriers need to reduce the prices for these services to encourage more consumers to use them, Strother says.

In-Stat/MDR has also found that:

• Consumers have adopted camera phones rather quickly, with US penetration at about 14%, and growing.
• Photo quality, though improving, needs to move beyond the VGA level rather quickly in order to stimulate greater photo taking.
• Improved interoperability is necessary to allow photo sharing among US consumers who use different carriers.

"The devices have gone mainstream in less than four years," In-Stat/MDR, a global wireless research firm, said in its report.

"Now, one needs to look hard to find a handset that doesn't feature an embedded camera," Neil Strother, an analyst with the firm said.

New generation consoles awaited

In another report, In-Stat/MDR said that the video game console market remains in the back end of its current cycle, with declining shipments expected to continue until the next generation of consoles comes to market.

The high-tech market research firm finds that Sony is still dominating the market with its PlayStation 2 (PS2) console, which shipped its 70 millionth unit in January 2004.

"As is typical with the back end of a market, this one is characterized by companies cutting prices on both hardware and software to entice more casual, value-oriented consumers," said Brian O'Rourke, a senior analyst with In-Stat/MDR.

"However, as can be expected, year-over-year shipment declines will continue until all next-generation consoles are on the market in 2006."

The first next-generation console should hit the market in the fourth quarter of 2005 with the introduction of Microsoft's Xbox 2.

Sony, however, is not likely to give Microsoft too much lead time before launching its PS3 console, which should occur by mid-2006. Nintendo will try to launch its next-generation GameCube 2 console either before, or simultaneously with Sony, which Nintendo considers to be its primary competition.

In-Stat/MDR has also found that:

• Nintendo's GameCube has performed solidly over the past year, with a worldwide price cut in the fourth quarter of 2003 significantly increasing sales.
• Microsoft's Xbox is in a struggle with the GameCube for second place in the market. It has performed well in North America, and is doing increasingly well in Europe.
• Sony will ship the most next-generation consoles through 2008. It has a proven track record built over the last 10 years, and has shown itself to be a marketing powerhouse. However, Microsoft and Nintendo are expected to narrow Sony's lead in the next generation.