Will Samsung's gamble on digital camera click?

It is a move that has the potential to change the fortunes of electronics giant Samsung in the compact camera market. The Korean chaebol has traditionally been a laggard in this segment dominated by Japanese companies such as Sony, Nikon and Canon. But the launch of an Android-based camera under the Galaxy brandname could mark the turning point for Samsung.

Why? It cleverly taps into current trends fusing a digital camera and a smart phone. Interestingly, Samsung isn't the first one to be doing this.

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It is Nikon who first came out with an Android-based compact camera this August (under the Coolpix brandname) using Wi-fi to connect to the Internet and allowing users to share pictures and download apps.

But Samsung has attempted to go a step further, giving users the option to connect to the internet via 3G as well as Wi-fi, helping them perform all data-related work from surfing to emailing besides running other applications.

The camera also has different options available for ...

The point-of-shoot, as the compact camera segment is referred to in industry parlance, is a 3.2 million or 32-lakh-unit-market in India. The professional segment driven by the Digital Single Lens Reflex cameras, on the other hand, is a 2.25-lakh-unit-market in the country. Because of the ease of use of compact cameras, they continue to be a bigger draw for lay consumers than DSLR cameras.

According to industry estimates, the rate of growth of compact cameras in India is nearly 30 per cent per annum. This is why Nikon has priced its Android-based Coolpix camera at about Rs 21,000 in India, say market experts.

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So will consumers bite the bullet then as far as Samsung goes? A company spokesperson says that they will since many smart phone users don't mind a second device that allows them to quickly connect to the internet and share pictures.

"You have a camera that gives you professional-like images, is easy to use and allows you to share without having to connect to some other device for the purpose. Certainly we see consumers picking up the product," the spokesperson says.

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But are the Japanese majors likely to keep quite in the face of this eventual shift to a hybrid product? Sony, the leader in the compact camera market in India with a share of 40 per cent, has said that it will launch new models on the Android platform going forward.

Nikon, the number two player with a market share of 25 per cent, is likely to launch upgrades to its new Android-based Coolpix camera, while Canon at number three (market share: 15 per cent) has said that it is not contemplating any products on the Android platform at the moment.

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"I am not sure whether direct connectivity through a camera is that compelling a proposition," says Alok Bharadwaj, senior vice-president, Canon India. "We will wait and watch before taking a call on the hybrid camera space."

Sunil Nayyar, senior general manager, sales, Sony India, says that while adoption of Android-based cameras will be there, serious photographers will continue to go after DSLR cameras. "There is not likely to be a big shift at that price point since Android-based cameras have limitations," he says.

The reason why Nayyar is saying this is because DSLR cameras typically start from Rs 30,000 in India.

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"When you can get professional images with a DSLR camera and now even those cameras are beginning to improve on their connectivity then why will consumers shift?," he asks.

Bharadwaj, whose company has a 45 per cent share coming in at number two after Nikon (market share: 55 per cent) in the DSLR space in India, says: "Too much of a hybrid between a camera and smartphone may not actually charm a consumer. Players will have to bear this mind."

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Yet despite rivals writing off the product, Samsung appears optimistic about its prospects. The company is expected to launch new models going forward to capitalise on the momentum.

This strategy is also expected to help Samsung increase its presence in compact cameras - a category where it is driving convergence - much like it has done in other consumer electronic segments such as television sets, tablets and smart phones.