Irvine, Calif.-based Toshiba said its PDR-M25 will now cost $249, down from $279. The price move for the 2.2-megapixel camera is in line with similar efforts by competitors, which have been adjusting prices to fit the mood of consumers.
"Last year, the low end of the market grew to 2 million units, but consumers quickly realized that resolution is significant, so now manufacturers are looking to the 2-megapixel to 3-megapixel cameras to take off as well," IDC analyst Ron Glaz said. "This price move by Toshiba is definitely a sign of the times."
With the exception of the low end, the U.S. market for digital cameras grew by 30 percent last year, spurred by a strong holiday sales season, according to afrom market research firm IDC. The low end of the market declined, the report said.
Glaz said manufacturers are shooting for the $200 to $300 price range to lure consumers.
Hewlett-Packard, which holds the No. 3 market share position for digital cameras, is being particularly aggressive on price, selling its 2.31-megapixel HP 318 for $200.
Toshiba has the No. 9 market share spot for digital cameras, according to IDC.
As competition for 2-megapixel and 3-megapixel cameras heats up, Glaz expects the other top camera makers, such as Sony, Olympus and Kodak, to make similar price cuts.
Glaz added that consumers and manufacturers should be careful not to focus just on price, but also on features and how easy a camera is to use.
"At the same time, (manufacturers) don't want to devalue this market and turn it into a commodity business, so there's a careful balance that they need to strike," Glaz said.