Are Cell Phones Hurting the Digital Camera Market?

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There were a few releases about upcoming chips and sensors for cell phones that will finally bring improved photo quality to the devices.  While phone pictures still aren't up to snuff for camera enthusiasts, they're good enough for less discriminating consumers, and it's beginning to sting manufacturers.

Pam Tufegdzic of the research firm iSuppli reports that entry level digital cameras aren't selling like they used to. "Handsets soon may begin to cannibalize the low end of the digital still camera market as they incorporate higher megapixels and flash capabilities," she says.

iSuppli analysts also suggest that smartphone makers will start adding a few tricks to their handsets to try and keep consumers in their corner.  Improved flashes, auto focus features and even optical zoom could be hitting cell phones in the next few years, starting in Asian and European markets.

This doesn't mean the death of digital cameras, but it does lay down a line in the sand for the entry level market.  Lower end camera makers will have to step up their game to convince customers that it's worth owning a separate device for taking photographs.