Pentax To Produce Cameraphone Modules
By Carlo Longino, Wed Jun 16 20:30:00 GMT 2004

The Japanese camera maker says its will begin making 2- and 3-megapixel imaging modules for mobile phones, reacting to the devices' success and the need to boost sales.

Pentax, looking to grow its non-camera revenue sources and profits, is adapting its products to fit the changes cameraphones are forcing in the imaging market. Clearly the company is hoping its expertise in film and digital cameras will help it win over mobile-phone makers, and time will tell if those vendors choose to push the Pentax camera brand as a competitive differentiator.

It's no secret that the traditional camera powers have to adapt to the influence of cameraphones, but this is one of the first concrete moves made by any of these companies.

It remains to be seen how others will react: Nikon's chief said this week that his company is seeing significant drops in the selling prices of its compact digital cameras, and will next year consider pulling out of the compact film camera market, due to plunging demand. "There is still the matter of timing, but eventually we will have to dissolve this business," Nikon MD Makoto Kimura told Reuters. "There really is no region in the world where you can do good business in compact film cameras anymore."

Film sales in the US are sliding as well, where single-roll unit volumes are off 16 percent in the first four and a half months of the year. Of more concern to film powers like Kodak and Fuji than the overall figure, however, is a 1 percent drop in disposable camera sales. Although it's not much, sales gains of the single-use cameras had been offsetting the drop in roll sales recently, but many analysts believe the softness is due to cameraphones. An exec with the Photo Marketing Association told The Wall Street Journal: "If you've always got a camera phone with you then you don't need a single-use camera."

There's a little more to this than the continued booming sales of digital cameras. The combination of quickly improving digital technology and the explosive growth of cameraphones -- both in sales and in their spread from high-end devices further down towards the low end -- mean that not only are film users switching to digital, but many users, particularly the young and those in developing countries, are going straight to digital. And more often than not, that first digital camera is a cameraphone.