Digital Camera Sales Plummet. Smartphones to Blame.

According to Reuters, via the New York Times, compact digital camera sales are down by a whopping 40 percent. Some of your favorite brands -- think Panasonic, Olympus and Fujiflim -- are actually losing money on their camera divisions. And the bad news doesn't stop there. Sales for mirrorless cameras, which are mid-tier cameras halfway between compact point-and-shoots and mirrored DSLRS, are also "sputtering", making up only 10.5 percent of interchangeable lens camera sales in the US (and 11.2 percent in Europe): despite doing quite well in Japan, where they make up 36 percent of ILC sales.

Why is this happening?

Simple: smartphones. The article quotes the issue being about the "Selfie Generation", but, frankly, that's silly. The truth is consumers want ease of use, value for dollar, and compact sizes. And guess what? Sure, most point-and-shoot cameras offer a better overall image than similarly-priced camera phones, but if you buy an iPhone or an Android, why would you want to spend a few hundred more dollars on something marginally better that doesn't fit in your pocket, and have to carry both around at the same time?

It also comes down to connectivity. If you're out with friends or family, and you capture a memorable image, you immediately want to post the pic to Facebook, Twitter, or one of the other social networking sites. To be fair, digital camera manufacturers have been aggressively integrating WiFi into their mirrorless and point-and-shoot cameras, creating smartphone apps that allow new cameras to transfer video and still images to the phone first, and then the web. But that's one step too many, it seems:

"Consumers don't want to connect cameras to phones, analysts say; they want a single interface that can instantly upload photographs to social networking sites such as Facebook Inc and Twitter Inc."

The one bright spot, amidst the downward trends, is that DSLR sales are actually up one percent. Thankfully, those who care about overall picture quality and enhanced manual controls are still willing to purchase a separate camera. It certainly makes sense to me. When I'm out and about, I wonder if we need the point-and-shoot, but when traveling or attending professional events, the phone camera simply won't do (in terms of dynamic range, lens flexibility, and color accuracy).

While this notion of "those cameras are better than phones, and thus worth the extra coin" is helpful to camera manufactures, they don't understand why the mirrorless camera market, specifically, is, again, "sputtering" so significantly. From the perspective of Hiroshi Tanaka, director of Fujifilm's optical division, "SLRs are heavy and noisy, whereas mirrorless are small and quiet. While some people say SLRs still have better image quality, mirrorless (cameras) have improved to the point where they're equivalent, if not superior."

Regardless, the numbers are in. Digital camera sales are plummeting thanks to the increasing day-to-day usage of smartphone cameras. If the manufactures don't adapt quickly, their various camera divisions will be in jeopardy of closing down.

So what will they do? Is there any hope?

Actually, Sony may have already found a compromise in its QX-series -- the QX10 and QX100 -- "Lens Style" cameras, which are lens-shaped cameras that use Sony's MobileMe app to connect the QX-series to your iOS or Android Smartphone, which acts as a viewfinder as well giving users access to menu functions and sharing images on social networks.

Source: New York Times via Reuters.