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Shooting forward: A look at a mature camera market

Digital photography is exploding, yet camera sales continue to slump. Here's a look at the current market and what should change.

Joshua Goldman/CNET

That was the response I got when I relayed my experience with the foto.sosho V.4 iPhone camera case at CES to a friend in the camera industry. Ridiculous name (and equally ridiculous price) aside, it is basically a showcase for how much you can do with a smartphone camera and how little a basic point-and-shoot offers.

With the V.4, you get a shutter release, built-in flash, and a lens mount for three interchangeable lenses. There's also a sliding QWERTY keyboard built in, so you can shoot and share without awkwardly trying to type on the screen while it's still in the case. Everything functions with an iPhone via a Bluetooth connection with an app to handle all the shooting and sharing stuff. Also, since the phone is wirelessly connected to the case, you can pull the iPhone out and use the case as you would an off-camera flash.

So here you have all of these smartphone and mobile accessory manufacturers trying to give consumers a better camera experience, so that they can get better photos and videos without buying a camera. Camera manufacturers are seemingly so slow to adjust that the majority of their offerings are missing the mark.

Too many cameras
Outside of a couple Ashton Kutcher commercials, camera manufacturers are terrible at getting you interested in their products, so chances are, unless you care about camera tech or have shopped for a camera in the past couple years, you probably have no idea what's out there.

For as fast moving as the technologies are, there are still essentially two types of cameras: compacts with fixed lenses (i.e. they can't be removed from the body) and interchangeable lens cameras, such as digital SLRs. But if you walked into a store you'd think there were many more.

Entry-level compacts, aka point-and-shoots, have been hit hardest by phones and other devices with built-in cameras because at the low end they really don't offer a competitive advantage beyond a zoom lens. It isn't until you get around $200 that you start to see better point-and-shoot cameras, though you can't go strictly by cost since many models are priced by features such as long zoom lenses and not photo quality or shooting performance.

The Canon PowerShot A2400 IS, though good for what it is, isn't much competition for a smartphone. Sarah Tew/CNET

Unfortunately, even if you know what you're looking for and the amount you want to spend, there are so many models available from the major camera brands -- Canon, Fujifilm, Nikon, Olympus, Panasonic, Ricoh/Pentax, Samsung, and Sony -- that trying to find the right one is probably enough to make you stick to using your phone or risk being disappointed by your purchase. What's worse: the camera makers typically create special models for their retail channel partners that might be the same as the base model, but in a different color or with a smaller screen.

Panasonic's FZ200 is an excellent compact camera, but its price puts it in competition with entry-level SLRs and ILCs. Sarah Tew/CNET

But let's say you've decided to make image quality a priority and are willing to throw $400 to $600 at the issue. Over the past few years, this price segment has actually become incredibly crowded. Aside from models like Panasonic's Lumix FZ200, which has great features, but a small point-and-shoot sensor, you'll find large-sensor compacts, entry-level digital SLRs, and entry-level interchangeable lens compacts (ILCs, also known as compact system cameras).

Again, all the major camera makers have cameras that fall into these categories, so there's a dizzying number of options. Going above this price point smooths things out some, but there is still a glut of dSLRs and ILCs from which to choose. (For more information on all of these camera styles, here's our buying guide.)

Consumer indifference
For whatever advantages there are to having a dedicated camera, many people just don't care. Having a camera requires carrying a second device that, right now, won't allow them to easily shoot and share their experiences. With newer smartphones, the photos and video are good enough for sharing online and probably as good as or better than what you'd get from a basic point-and-shoot, which, again, are the models that are dying off the fastest.

The Samsung Galaxy S3's camera might not be as good as a standalone one, but it's still very good and, hey, it came with a phone. Josh Miller/CNET

There's also the economics of the whole thing. If you're willing to sign a carrier contract, you can grab a pricey smartphone for significantly less that does all kinds of things and has a good camera. There are no subsidies for cameras (not yet at least), so if you want a good camera you'll have to pay for the whole thing and it's only a camera. Now, multifunction devices might not necessarily be the best at any one thing, but if you're happy with the results from the phone, why would you spend more money to get a separate camera?

Destroying the pockets of growth
Although the overall sales of compact cameras are dropping, there are segments of the market with sales growth: megazooms and rugged cameras. So what we have now are a lot of small-sensor point-and-shoots with long zoom lenses and a variety of water-, shock-, freeze-, and dustproof cameras. The problem is, there's only so long you can make a lens and only so much you can protect a camera.

Just looking at the models announced for 2013 so far, you can see manufacturers are running out of places to take their lines. Sony's Cyber-shot HX300, for example, has a 20-megapixel sensor and a 50x zoom lens -- and it's the third camera to hit in the past year with its 24-1,200mm zoom range. Similarly, Olympus tuned up its top rugged camera, the TG-2, by making it waterproof down to 50 feet, 10 feet deeper than its predecessor, and adding a couple shooting modes.

Continuing on this path of more zoom, more megapixels, and fairly unnecessary improvements (are there really that many people diving to the 40-foot mark underwater with a point-and-shoot and turning around?) in the end this, won't keep consumers satisfied.

Turning things around

There's really no way to stop the camera sales losses brought on by smartphones; someone's either going to buy a camera or he's not. The key is to give the people who want to buy cameras better options, not just more of the same.

Fewer, but better cameras
As a consumer and a reviewer, I truly dislike when manufacturers sell two nearly identical versions of the same product, a practice that's rampant in the point-and-shoot market. The Canon PowerShot A2400 IS pictured earlier in this story is a perfect example. Its linemate, the A2300, is all but the same as the A2400 except that it doesn't have optical image stabilization (the IS in the model name). It's a feature that can certainly make a difference in your photos, yet the cameras are only separated by $10. While I'm calling out Canon here, it's something that all of the brands do and it really needs to come to an end.

It's about time larger image sensors like the 1/1.7-inch BSI CMOS in the Olympus XZ-2 found its way into other models, like the company's Tough rugged cameras. Lori Grunin/CNET

Some manufacturers have started to pare down their lineups, such as Sony, which has only announced eight new Cyber-shots for 2013, four with CCD sensors and four with the company's significantly better Exmor R backside-illuminated CMOS sensors. Eventually, though, Sony will need to scrap small CCD sensors altogether (actually all the manufacturers should at this point) and move to all BSI CMOS. Going a step further, some of these models need to shift to larger-sensor models, bringing improved image quality to models targeted at people other than enthusiasts.

Bigger sensors and fewer megapixels
Read the point-and-shoot camera user reviews on any shopping site and you'll see many people saying things like, "this 16-megapixel camera isn't nearly as good as my old 8-megapixel one." Camera manufacturers have basically spent so much effort marketing megapixels to consumers that it's tough to break the habit. But if you look at what's at the high end of the market, the sensors are packing fewer megapixels than those at the bottom.

Look at Fujifilm's FinePix models, for example. The new flagship bridge camera, the HS50EXR has a 16-megapixel sensor, while its new X20 enthusiast compact is just 12 megapixels, and it's a larger sensor. Fujifilm has trickled down some of its pro features to consumer models, such as the Electron Beam Coating (EBC) used on FinePix and X-Series lenses that was first used in Fujifilm's professional broadcast lenses, so there is hope that it could start pulling back on the megapixels for its FinePix models. (Then again, it also has one of the most bloated camera lineups around, so maybe it should concentrate on thinning that out a bit first.)

What's funny is, it could be HTC's One smartphone that spurs a big move to fewer megapixels. Marketed as Ultrapixels, the smartphone's camera uses a 4-megapixel instead of an 8- or 13-megapixel sensor with larger pixels, which could improve photo quality the other pieces fall into place as well. If consumers can see that fewer larger pixels are better than more smaller pixels, we could see a rollback on camera sensors, too.

Also, maybe it's about time camera makers stopped trying to make cameras that try to please everyone. This typically ends with a camera that doesn't do anything really well. We need more than just long lenses with mediocre image quality.

Now playing: Watch this: Road testing the Samsung Galaxy Camera in Paris

More wireless, now
Perhaps it's because Samsung has such a large mobile device presence, but it has done more to push wireless features than any other camera maker. It was the first to start putting Wi-Fi in all but its lowest-end cameras and the first to have an Android-based point-and-shoot with both Wi-Fi and mobile broadband access with the Galaxy Camera.

Unfortunately, the Galaxy Camera is more a really cool device than it is a great camera. But I doubt it's Samsung's last attempt, and I would not be surprised if one of its NX-series ILCs ended up on a mobile carrier soon.

Most people didn't shoot video with their digital cameras when it first started showing up, but now you can't find a model without it. The same thing will happen for wireless features, but it has to be in the cameras for people to use it. You can't make people choose whether they want Wi-Fi; you just have to give it to them.

Nikon's Coolpix S6500 announced at CES 2013 is a pretty basic point-and-shoot, but it's still packing Wi-Fi. Joshua Goldman/CNET

Just about every manufacturer has said it knows wireless features are important, but Samsung and Nikon are the only ones jumping on it. Again, for 2013, Samsung has loaded its cameras with Wi-Fi while Nikon either has it built in the camera or allows you to use a tiny adapter to add the feature. Everyone else is still "testing the waters."