How Samsung can click with its phone-camera move

The electronics giant is shifting its camera operations to its wireless division and is getting a lot more dangerous.

The Galaxy S4 Zoom features a stronger camera than the Galaxy S4. Josh Miller/CNET
Samsung's latest shakeup will make for a tighter union of smartphones and cameras. That's bad news for everyone else.

The Korean electronics giant, which reorganizes its businesses annually, this week told Korean media outlets that it plans to fold its camera operations into its wireless business. That will allow it to "integrate the technical know-how of the two business divisions" to differentiate its smartphones. It also will allow Samsung to use insight gleaned from its successful phone push to boost its position in the camera market.

We've contacted Samsung for information and will update the report when we know more.

Samsung is already dominant in the smartphone business, but could widen its substantial lead even further by addressing a key feature that many consumers care about: The quality of the camera. Rivals such as Nokia have made a lot of noise about the camera tech found in their phones, and it appears Samsung is moving to follow suit.

In a crowded smartphone market, all companies are looking for some "wow factor" that makes customers crave their products. For many phone vendors, the camera has become that factor. Device makers have integrated image sensors that can rival traditional digital cameras, and loaded dozens of nifty settings that can edit and alter photos.

Nokia, in particular, is one company that touts the photo-shooting features of its devices. It was one of the first companies to start incorporating higher quality cameras in its mobile phones, and it bought a Swedish mobile imaging company called Scalado last year. Its Lumia 1020 smartphone packs a 41-megapixel camera and software tweaks that make it "one of the most artistically able smartphone cameras we've tested," CNET said in its review earlier this year.

But smartphone cameras have also been a big focus for Samsung. The Galaxy S4, unveiled earlier this year, came with a full suite of camera shooting modes, and the company later introduced a version of the device, the Galaxy S4 Zoom, that's specifically targeted at people who want a phone on par with a point-and-shoot camera. Last year, Samsung introduced the Galaxy Camera, a digital camera that has its own cellular connection.

Samsung's position in the digital camera market -- including with the Galaxy Camera -- isn't as strong as its ranking in mobile devices. The company has introduced innovative features for its cameras, but it continues to struggle. In 2012, the company held 12 percent market share of the camera market, putting it in fourth place, according to a report from Samsung earlier this year.

Smartphones, meanwhile, continue to eat into sales of digital cameras, with more users opting to take photos with their mobile devices rather than carry a separate gadget. Sales of point-and-shoot cameras should fall about 30 percent to 40 percent this year, according to IDC.

"It's a make or break time when the [camera] market is really being impacted by phone usage," said IDC analyst Chris Chute.

For Samsung, merging its smartphone and camera businesses is a smart move. The company's operations are generally closed off from each other. By bringing them closer together, both sides get better insight into future developments and ways the technologies can work together. Samsung can make products that are better integrated and that include features not found on Nokia Lumias and other devices. And all of that can give it an edge over its biggest rivals.

In addition, Samsung can now devote its resources to improving cameras for the growing mobile market rather than the dying digital camera market.

Now the company just has to pull it off.

 

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