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Digital camera memory battle heats up

The market for high-capacity digital cameras revs up with a new entrant--and possibly a standards war.

The market for high-capacity digital cameras heated up today with a new entrant, which also adds fuel to the fire growing over standards.

Agfa introduced the ePhoto CL30 Clik digital camera today, using storage technology from Iomega. The Clik introduces yet another storage medium to digital cameras, as flash memory, Sony Memory Stick and floppy disks fight for dominance.

Agfa's adoption of Clik is also important for Iomega, which has taken a beating in its core Zip market as cheaper, higher-capacity storage options such as CD rewritable (CD-RW) have surged in popularity. Market researcher PC Data, for example, estimates one-third of PCs sold during the holidays will pack CD-RW drives.

Today's announcement may be a big step forward for Iomega as it looks beyond Zip, but it may not be enough, said PC Data analyst Stephen Baker.

"As the cameras get better, you're going to need more storage space," Baker said. "The trend is...to move up to larger storage capacities, and Clik, at 40 MB, isn't going to be able to solve that for you."

Newer megapixel cameras demand greater storage, with file sizes ranging in the 0.25 to 0.5 MB range, making greater storage capacity all the more important.

Price is on the side of Clik, said International Data Corp. analyst Kevin Kane, who pointed out Iomega's media costs is about $9 vs. about $80 for the two popular flash-memory mediums, CompactFlash and SmartMedia.

"Clik is so cheap compared to CompactFlash and SmartMedia; it's a great archiving option," Kane said. "You can just keep all your images on one and go out and buy another one, where you're not going to do that with a 32 MB flash card that cost you 80 bucks or so."

But the market clearly belongs to flash memory for now, Kane added. SmartMedia accounted for about 55 percent of digital camera storage and CompactFlash the bulk of the rest, according to IDC. Floppy disks have grown in popularity, in part due to the success of Sony's Mavica camera, but long term the standard 1.44-MB floppy is inadequate for storing images on newer cameras, Kane said.

Panasonic in September tried to beat this limitation by unveiling the PV-SD4090 digital camera, which uses SuperDisk for storage. SuperDisk, a 120 MB, high-capacity floppy, can hold up to 1,500 low-resolution pictures vs. about 17 for standard 1.44 MB floppies.

Sony--which in the third quarter captured the No. 1 spot in digital cameras, according to IDC--also recognizes the limitation of the standard floppy and is looking more to its proprietary Memory Stick technology for storage.

Sony led the digital camera market for November with 30.4 percent market share, according to PC Data. Olympus and Kodak followed with market shares of 12.3 percent and 11.1 percent, respectively.

Sony faces challenges with Memory Stick that its market-leading position may not overcome, said Kane and Baker.

"Sony's had a real hard time bringing non-standard technology to market," Baker said. "You just have to look at Betamax, MiniDisc and others, and you see they've had problems doing this."

For now, flash memory is likely to continue its dominance, although Kane said price could help Iomega, Agfa and other digital camera makers planning to use Clik to gain market share.

The ePhoto CL30 Clik is available immediately for a suggested price of $549. Besides Clik, the digital camera uses USB to transfer images to a PC.