Futuresource Forecasts Show Smart Cameras to Reach 4.7 Million Units Worldwide by 2016.

Online, June 5, 2013 (Newswire.com) - The global smart camera market size reached 250,000 unit shipments in 2012, with consumer off-take representing around 50%, and the remainder accounted for by pipeline fill, according to the latest smart camera report from Futuresource Consulting.

"Smart cameras are still a niche market, with few players in this segment," says Arun Gill, Market Analyst with Futuresource Consulting. "However, looking forward, sales of smart cameras are expected to grow; with our forecasts indicating that shipments will reach one million units in 2013, and grow a further 68% CAGR by 2016 to reach 4.7 million units worldwide. This growth will be fuelled by consumers desiring the optics associated with a digital camera, combined with the connectivity, apps and user interface associated with smartphones, providing the best of both worlds."

The cannibalisation of smartphone usage among consumers has had significant impact on sales of fixed lens camera shipments, which fell 23% in 2012, to reach 93 million units. "Although currently in decline, growth opportunities still exist for a product that provides extra camera features, which are lacking in the smartphone camera, like optical zoom and large sensor size," says Mr Gill.

The cost of the unique feature set on a smart camera is expected to restrict volume growth beyond 10% of the overall fixed lens camera market, by 2016. In particular the large touchscreen and processing and memory requirements for the Android operating system and connectivity will keep prices high, relative to alternative fixed lens cameras and smartphones, where consumers still see the camera as a feature with no associated cost.

The smart camera's trade price is forecast to be $202 by 2017, versus $87 for fixed lens cameras without WiFi and $107 with WiFi. "Looking forward, we don't think there will be high demand for the 3G/4G version of the smart camera due to the cost of an additional data plan, so WiFi is expected to be the most likely solution," says Mr Gill.

Optical zooms will be the primary distinguishing feature of smart cameras over smartphones, offering potential for new players in this segment. All smart camera sales are assumed to offer 10x optical zooms and higher over the forecast period, versus smartphones, where a negligible share of sales will offer any optical zooms by 2016. Lossless digital zooming and pixel binning are some of the ways mobile vendors can maximise the limited space to improve the optical performance.

Consumer demand for connectivity and the ability to share information is producing many new revenue streams for hardware and software companies, such as the ability to access mobile apps on smart cameras. This also creates certain challenges in the way companies educate, communicate and engage consumers with the future of technology. The Futuresource Entertainment Summit 2013 will be discussing these challenges and explore strategies moving forward.