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Digital cameras to take market by storm

Falling prices and improved picture quality will spur the mass adoption of digital cameras, according to a new research report.

The critical time for digital imaging is now, according to a new study.

For the past few years, digital cameras have remained a niche product, despite analysts' predictions of a mass-market explosion once picture quality improved and camera prices fell. That time may finally be here, according to a study released today from International Data Corporation.

Worldwide digital camera shipments will reach 4.7 million this year, IDC found, growing to an "astounding" 22 million shipments by 2003.

"With falling prices, increasing quality and resolution, and new applications, digital cameras have begun to attract the attention of the average consumer," said Kevin Kane, an IDC analyst, in a statement. "The next several years will be key in determining what part digital cameras will play in leisure and business budgets and activities worldwide."

Annually, digital camera shipments are expected to grow 48 percent through 2003, IDC predicts, with revenue increasing 25 percent each year. The worldwide digital camera market will account for $6.4 billion in sales by 2003, according to the report, driven by U.S. and Japanese consumer sales of photo-quality cameras.

Previously, poor picture quality and high prices have stunted sales of digital cameras and peripherals. In addition, consumer digital imaging has been predicated upon the existence of a PC in the home, a tenuous proposition until recently.

But in the past year, these barriers have largely been broken down, IDC says. For example, the highest-quality megapixel cameras, or those offering images of over one million pixels, were priced over $1,000 last year. Today, megapixel cameras are considered mid-range, compared to the two-megapixel cameras now on the market.

Half of American homes now have PCs, and advances in photo printer and imaging software is such that most home users can easily take and process images digitally.

In addition, giants Microsoft and Intel have both focused their efforts on expanding the popularity of digital imaging as a way to drive sales of high-end computers and software.

"The main factors in the steep price decrease are improvements in manufacturing capabilities and the development of economies-of-scale as well as the decreasing cost of components such as sensors and memory," Kane concluded.