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Raja Simhan T.E.

Digital cameras have ensured that photography is no longer reserved for rare occasions. The market is set to explode. The challenges posed by the grey market are being checked with affordable pricing.

PREETI, a 15-year-old schoolgirl, was thrilled to receive a small digital camera as a birthday gift from her dad. She now spends at least an hour a day snapping up pictures. "It is exciting and easy to operate," she says.

Till a year ago, owning a digital camera was a costly proposition for a lower and middle-class Indian family. Today, digital cameras are available at less than Rs 10,000.

A digital camera does not require a roll of film. One does not need to buy the film, snap up pictures, and then wait for the studio to develop the rolls. A digital camera stores images on an internal memory chip, removable personal computer (PC) cards, or other digital media. The images can be transferred electronically to a computer for manipulation, emailing or Web site creation, or can be printed through a printer.

The built-in storage chip called `Flash Memory' in an amateur digital camera has a capacity of 2MB, 4MB or 6MB, and can store 50 to 100 small resolution pictures. There are memory chips of various capacities too. For instance, a 64 MB chip can store around 300 pictures that can be printed in the size of an Indian postal card.

These attractive features, in addition to affordability, are driving the digital camera market in India. And, camera manufacturers such as Canon, Kodak and Sony are aggressively vying for the pie. A couple of Taiwanese firms too have forayed into the market. Photography used to be reserved for rare occasions such as an anniversary, vacations or the arrival of a baby. However, thanks to the digital camera, it has now become part of our lifestyle, says Alok Bharadwaj, Vice-President (Volume Group), Canon India.

The digital camera market in India will touch around Rs 600 crore by 2007 from Rs 100 crore at present. India is expected to have the highest sales growth in the world in digital camera in the next few years, he says. The volume may be less, but the growth in percentage will be like a hockey stick - start in a small way, reach 20-30 per cent growth in a couple of years, and then have a steep vertical growth, says Bharadwaj.

Around 10 lakh digital cameras are expected to be sold by 2008. By then the digital camera is expected to overtake the analog one.In 2003, the market for digital cameras in India amounted to 1 lakh units as against 30 lakh units of conventional cameras, he says.Other than retail consumers, there are around 100,000 photo studios, about 750 media houses, and over 100,000 event and wedding photographers. Most of them use analog cameras, but are slowly moving towards the digital version.

"I see this as an opportunity for consumables worth Rs 60,000 a studio a year," he says. Canon India aims to capture a 30 per cent market share in the next couple of years from 10 per cent now. Revenue from the digital camera business will increase to Rs 180 crore by 2007 from Rs 10 crore now. In terms of price, a Canon digital camera starts upward of Rs 10,000.

Canon India has focussed on channel partners, targeted at the youth - 54 per cent of India's population is below 24 years — and has launched interactive photo retail stores in various cities. At the Canon Digiclick Zone, consumers can experience digital photography, and understand its nuances. Canon has earmarked Rs 4 crore to promote its digital cameras, he says.

A distinct click

The year 2004 was very important for the industry, says Ravi Karamcheti, Vice-President-Marketing Operations, Digital and Film Imaging Systems, Kodak India Ltd.

Digital cameras are now looked at as not only an attractive gifting option but also for personal use. An entry-level camera is available for Rs 6,000 to Rs 7,000.

The growth in digital cameras will happen due to better pricing and enhanced features. Plus, home printers offer a new experience and option to customers, he says.

According to research firm IDC, the digital camera market in India registered shipments of 68,000 in 2003, a growth of 83 per cent over the previous year in the organised market (excluding grey imports). It has estimated an overall growth of 66 per cent for 2004, and Kodak was the fastest growing digital still camera brand in 2003 in the country. Kodak has 47 per cent market share. The Taiwan-based Aiptek International Inc is a recent entrant.It has tied up with the Chennai-based TVS-Electronics to distribute, market and service Aiptek digital cameras.

S. Narendran, General Manager, Marketing, TVS-E, says the company will provide Aiptek `Passage to India' services using its distribution and service network. With a price range of Rs 3,000-10,000, Aiptek cameras are targeted at multiple segments of customers — from students to households.

BenQ, a Taiwan-based manufacturer of networked digital lifestyle devices, too has forayed into the Indian digital camera market. BenQ digital cameras are available across the 2 to 5 mega pixel (the more an image's pixel count, the higher the image's resolution) range and priced between Rs 9,000 and Rs 24,000.

The Indian market for the digital still camera is expected to grow continuously for the next couple of years. The penetration level is lowcompared to the market potential. However, India should be looked at as a very strategic market in the coming years, says Mohit Parasher, General Manager (AV/IT Division), Sony India Pvt Ltd.

Grey losing market

The grey market — evading customs duty — that `enjoys' over 40 per cent market share of the total digital camera in India will co-exist with major players. However, the grey market will lose its charm with digital cameras becoming more affordable. Says Karamcheti of Kodak, the company has digital cameras ranging between Rs 6,900 and Rs 33,900. Kodak has cameras with 2-mega pixels to 6-mega pixels that are attractively priced compared to grey market products.

Also, the company has opened its Kodak Digital Service centres across 11 cities, which ensures that the consumer enjoys after-sales service, something the grey market cannot offer, he says. According to Bharadwaj of Canon, in two to three years, the share of the grey market will come down to less than 25 per cent, and in the next five years it will vanish completely. Companies now offer additional warranty on products, making it attractive for consumers to buy from genuine dealers, he says.

Strategic pricing, along with three-year warranty and zero per cent finance (now up to 24 months) help Sony challenge grey prices and provide customers value for money, says a Sony India official.

Printer in tow

In the near future, there will be information-sharing between multiple technologies. There is increased usage of the Internet, cell-phones and digital cameras, which has pushed the need for higher-level printer devices, says P. Sainath, of Lexmark International (India) Pvt Ltd. Technology-savvy youngsters and other professionals want to own and be seen using hi-tech gadgets and gizmos. This opens up vast opportunities for Lexmark, he says. For instance, Lexmark has launched photo-printers that come with "pictbridge" technology, which means the consumer just needs to connect the digital camera to the printer, press a button and hey, presto, the picture comes out.

Mobile phone with camera

A mobile phone with camera shares some features with a digital camera but poses no threat to it. This is because mobile phones offer very low resolution (.3 mega pixel) and donot have some key features, including the capability to take a printout, says a Sony official. However, there's no saying what might evolve in the future.With camera phones, one can send a picture through e-mail and take a printout of a small size. However, its quality will not be comparable to that of a digital camera, he says. According to a Kodak official, digital camera and mobile camera are of two different segments, and cannot be compared. Camera phones come with low resolution, she says.

Demand for film rolls

The demand for photo film rolls continues to rise. However, there is also an increase in digital printouts, says Prasad, owner of a film studio in south Chennai. Prasad sells around 500 film rolls a month, and there have been no major changes in the sales figure for the last few months.

According to Prasad, customers using digital cameras bring their memory chips, and download hundreds of pictures in a CD at a cost of around Rs 50.

Some come back for printouts of what they see as important pictures. A single print in maxi size costs about Rs 6, he says.

Professional photographers, including those that cover marriages, are moving towards digital photography, says Akash, an official at a Konica Photo Lab in Chennai. The future belongs to the digital camera, he says.

Speed and clarity

GET your picture taken in 10 minutes. This is what studios in Chennai promise their customers. And making this possible is digital cameras.

Says Prakash, a photographer in a Kodak studio in South Chennai, "digital cameras have made life easy for us. There is no wastage as in the case of film rolls, and if there is a shake while taking a picture, I can erase it immediately and take a new one. This is not possible with film-based cameras."

According to Surya, "We might haveshot a picture in dull light, but we can boost the clarity of the image using Photoshop (image software) in a computer. We can do wonders with pictures using software. All this is not possible with film-based cameras."

For photo studio owners, digital cameras mean higher productivity and returns, says Arasan, owner of a small studio. "The initial investment is higher in a professional digital camera, which costs over Rs 1 lakh. However, the returns are fast, since there is no additional expenditure in terms of film rolls, he says.Sundaresan, Manager, Konica Photo Shop, Chennai, says about 5 per cent of his customers use digital cameras currently, but the number will rise.

He cites the cost of the digital camera as a limiting factor to its growth. This will be addressed in the normal course given the experience of the electronics industry, he says.

He cites the prevailing levels of literacy as another factor. "There is a mental block among certain categories of users since the instructions are in English. Digital cameras haven't as yet come out with Indian language instructions."

Also, the assured resolution of the analog film camera is something that could check the growth of the digital camera, he feels. Professional photographer Rupesh says, "Digital cameras are more amenable to image improvisation."

Yohannan, also a professional photographer, says, "With digital cameras, we need depend only on ourselves. We are not at the mercy of photo studios — and human intervention and its downsides — such as variable use of chemicals on films or the differences in lab processing quality."

Picture by Vino John

raja@thehindu.co.in

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