If digital photography is to continue growing after the novelty of emailing photos to friends wears off, practical software applications will have to become the catalyst that transforms the technology into a mass market phenomenon.
Editing software allows digital photographers to go beyond a simple exchange of photos or creating T-shirts with pictures. Users can add value to small-business Web sites with image files, publish brochures from their homes, or print high-quality, frameable shots.
"The software gives people a reason to use the hardware...You give people a way to use [hardware] products over and over," said Carl Holec, an imaging analyst with ARS.
But the power of these applications may be a double-edged sword, analysts say. While some consumers appreciate complex editing software, others may long for the idiot-proof model of the point-and-shoot camera market, which relies on a well-established service industry to do the developing.
"No matter how easy they make it, it's still a hassle compared to one-hour [traditional film] processing," pointed out Bruce Kasrel, an imaging analyst from Forrester Research, alluding to the process of taking pictures, then downloading the pictures manually to a computer, then finally engaging in image manipulation or editing.
"The fun and whacky things you can do with these applications are not what you take [traditional] pictures for anyway," he says.
In what could be a good sign for software makers, the shortcomings of bundled software that's been "dumbed down" seem to be driving the sales of standalone products. The simplified software is bundled with hardware products, such as a digital camera or scanner, to encourage usage.
Often, the bundled version of an application is far less robust than the off the shelf version, prompting users to invest in the "real" product.
"Software is both a push and a pull for the entire market," noted Steve Hofenberg, an imaging analyst with Lyra Research. "In the act that these applications are being bundled with these products, it's a push. And by virtue of the sales of those hardware products, the installed base for the software is growing dramatically--much faster than the shrink-wrapped sales would grow alone."
Studies confirm this observation. Customers are increasingly buying the more robust version of the application off the shelf after trying the bundled version, according to a recent study from Dataquest. By the end of 1998, retail sales of imaging software will outpace bundled sales, said Suzanne Snygg, a Dataquest analyst.
Currently, the top three vendors are dominating all aspects of the retail market. Adobe leads in combined "OEM" (bundled) and retail sales, Microsoft leads in retail revenue, and MGI is ahead in retail shipments, according to the Dataquest study.
"People are still learning about this, so the software is very new," Snygg said. "Once people start to do this, they'll see that the software in the bundles is pretty light. But these products are what's going to keep this thing from being a fad."