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PMA 2005
By John Latta, WAVE 0515 4/15/05

Orlando, Florida
February 21 - 22, 2005

PMA is the major photo exhibition in the US. All the large photo equipment suppliers are present. Even some of the ODMs such a Premier and Asia Optical from Taiwan are here. PMA is the opportunity to announce products and Nikon and Canon are using the opportunity. The show is geared to the retail sellers but there is much to look at and sample.

Having been at PMA for 3 years in a row it is striking how fast film has fallen. The action is in digital. But this crowd is could care less about the cell phone camera. Digital is about cutting edge technology, personal enjoyment of pictures and sharing.

The Shift to Digital

PMA has industry statistics posted around the floor. Here are some extracts.

Total Camera Sales (US)

2000

Digital – 4.5m
Analog – 19.7m

2005

Digital – 20.5m
Analog – 4.6m

Household Penetration of Digital Still Cameras (US)

2000 – 8%
2005 – 52%

Digital Prints by Method (US) - Share

2000

Online – 4%
Retail – 6%
Home – 90%

2005

Online – 8%
Retail – 40%
Home – 52%

Digital Prints by Method (US) - Amount

2000

Online –
Retail –
Home – .4b

2005

Online – .7b
Retail – 3.1b
Home – 4.0b

Total Number of Prints Made (US)

2000

Traditional – .4b
Digital Prints – 29.9b

2005

Traditional – 7.7b
Digital Prints – 18.2b

Digital Images Not Printed vs. Printed (US)

2000

Not Printed Digital Images – 1.9b
Digital Prints – .4b

2005

Not Printed Digital Images – 12.3b
Digital Prints – 7.7b

In 5 years, digital has completely flipped in its position with film. One of the surprising statistics is the emergence of the retail location to print images. This implies that some of the digital consumers do not want to print at home but use traditional means. Another characteristic of digital is that many prints are not made – the selection is done in advance.

Portable Media – Hot Category

The WAVE found 9 portable media devices which stood out. The devices we found included:

Mustek, PVR-H140
SmartDisk, FlashTrax
PQI, Mpack
PQI, Mpack - 600
Archos, AV4100 - 100GB
Iriver, PMC-120
Epson, P-2000
Nikon, Coolwaker
Olympus, m:robe 500

Here are some notable observations.

These are very flexible devices that build on the iPOD for ease of use. A list of the functionality included in some but not:

DVP = Digital Video Play
DVR = Digital Video Recorder
DPP = Digital Photo Player
DMP = Digital Music Player
DVoR = Digital Voice Recorder
DPS = Direct Printing Supported
RM = Remote Control
TVO - Television Out
FMT = FM Tuner
GPS = Supports GPS

One unit even has 5.1 sound.

There is a drive to support Wide Format displays and two units have such displays.

We found no units which support editing such as cropping. This is left to the printers or a PC.

At least the Olympus m:robe 500 allows the playback of music with the picture playback on the television.

Price points varied from $293 to $799 with the major factor being hard drive capacity, which went from 20GB to 100GB.

RAW format support from many of the cameras is included in many of the units.

One vendor stated that consumers just do not want to carry around all the recording media required to support both the large file sizes and multiple days of shooting while on, for example, vacation. Thus, a small device which allows on to empty the recording media, at least at the end of the day, is an important function. Higher resolution cameras continue to drive up the file sizes which play into the media organizers. Another driver is the ability to share images in a slide show on any TV. Most allow for easy organization of images and their playback on a television.

A number of individuals that we spoke with view 2005 as the year that this product category will take off. As one stated – “MP3 just does not cut it anymore.”

Already this is not a simple market category. These are boxes with many functions and connections. Yet, most were driving for simplicity in use, if nothing else as easy as the iPOD. The key market requirement, which all perceive, is portability. This is one’s “media center.” As one vendor said, “I have 1,000s of songs on it already.” The best analogy of such a media device is the Sony Walkman. These fit that intent but they all support many media formats in addition to audio.

JVC Expands Everio Product Line

At Photokina, the WAVE was impressed with the Everio products which combine still imaging with video recording all using a Microdrive and superior MPEG-2. Now JVC has added the GZ-MC500 which is based on a 3-CCD recorder and also which supports 5mp still images and video. The camera also has a 10X optical zoom. On a 4GB Microdrive and 720 X 480 interlaced images it is possible to get 60 minutes of recording. The price will be $1,799 with availability in March 2005. Impressive.

Are Mega-Pixel Wars Over?

The WAVE went searching for an answer to the question – have the grinding megapixel wars concluded? It did not take much to get the camera companies to respond to this one. In general there was a consensus that they have. At 4 – 6mp the consumer has all the pixels needed to do a 4” X 6” print. What is most important is price point not resolution. Note that the focus was on consumer cameras not the high end DSLR cameras.

Canon

The industry is reaching a plateau in resolution. That range is from 4 – 7 mp. If a 7mp camera costs more than a 4mp they will not buy it. Price is the market driver. Most consumers do not know what resolution means. One of the problems is that consumers see the market hype. Look at these stickers – pointing to the sticker on the front of the camera – this has at the top the resolution. The real drivers are the camera features. We are already putting RAW capabilities into the smaller cameras. Watch for s shift in resolution to features.

Nikon

We have not seen the end. There is no justification for the push to higher resolution but it will keep on.

Olympus

The band for cameras is 5 – 7mp. We have reached the upper end with the current cameras.

Konica

The resolution sweet spot is 4 – 6mp and the price range $300 - $600. The consumer market will settle down in this range. The reasons being that the market will not allow the price to rise, this is the consumer upper limit for a digital camera. The consumer cannot see the difference gained from higher resolution. Consumers print 4 X 6 and a very few 8 X 10. They just cannot tell the difference to justify the higher resolution.

Hitachi – Microdrive Becomes More Competitive

Is the Hitachi Microdrive at the end of its legs? Did the WAVE get an ear full when we spoke with Hitachi. According to them, the microdrive is better positioned than ever.

Personally having 6+ Microdrives this is impressive technology that gets used at every trade show. But recently the professionals seem to be leaning to CF as the density rises. The rise in storage density slowed in the Microdrive and was impacted by the Hitachi buy out from IBM. There continue to be concerns about ruggedness of Microdrives, especially with professionals. The WAVE Report spoke with Hitachi and it was an excellent opportunity to hear the Microdrive story.

The Microdrive is here to compete very effectively with Flash. One of the reasons is the acquisition by Hitachi. As opposed to IBM, which had high costs, our costs under Hitachi are much more reasonable and under our control. This is the reason we have been able to be much more cost effective against Flash in the last 12 months. For example, the 6GB drive will be announced at this event and it is priced at $299. We will go to 8GB by the end of 2005 and have on our roadmap to go to 20GB in this form factor.

The reliability of the drives has risen dramatically. We found that the 340MB and 1GB drives had a reliability problem. When the drive was removed, while it was running, the point of grasp actually stopped the head from retracting. This effectively killed the drive. We finally found this at one customer site which had 9 drives fail. It was due to this problem alone. We redesigned the drive to place the head differently and made many other improvements. The reliability went up by a factor of 10. Now the errors are at .4% with .2% due to handling and .2% do to the drive itself.

There are places that the drive is best not used. Environments of high vibration, such as next to a large motor, and extreme temperature. At altitudes above 13,000’ it should not be used But these conditions are a small part of the use situation for most drives. In 2004 the market in CE use of the Microdrive just exploded. Our production in Thailand, which is where all the drives are made by hand, went from 2 lines to 12 lines. We have the capacity to make Microdrives.

One of the factors which impacts the drive, its performance and cost, is size. For example, cell phone companies want to put a full movie on a drive. We have a version that is an OEM package of the same drive which is slightly smaller. However, we do not feel that size reduction, i.e. a smaller platter, is the way to go at this time. The Toshiba .8” drive will not be competitive. One of the reasons is that going to .8” decreases the area for storage by one half.. Thus, with the same aerial density this drive will only store one half of what a Microdrive will. Presently our 4GB Microdrive is at 56.5GB/sq in. For the Toshiba drive to accomplish 4GB it must double the aerial density. Further, the Toshiba .8” drive does not get a proportional reduction in BOM and construction cost with a smaller platter. It still needs all the same components and this is sets the baseline drive cost. With a net reduction of one half the area the Toshiba drive will have a hard time competing.

With our road map at Hitachi and the cost structure here, we feel we are well prepared to compete with Flash and other technologies for some time to come.

Olympus Total Image Solution

Olympus was showing a suite of products to allow one to manage, archive, print and display products from an Olympus digital camera without ever using a PC. This includes:

S-HD-100 – 40GB storage unit
PS 100 Printer
IR -300 Camera
IR-500 Camera
S-DVD-100

The system will go on sale in 1 – 2 months. The printer costs $179 and uses dye sublimation. The camera can actually crop the image and thus image cropping can be done in the system. The DVD recorder archives the images on DVD. The level of integration made for a slick concept but it seems there are too many boxes.

WAVE Comments

The cumulative impact of digital cameras, iPOD, integration of video and still formats, cell phone cameras and portable storage devices is coming together to form a new market category. All the market contributors deal with personal content except the iPOD. This links to the market premise frequently cited by the WAVE:

Consumers value most that which they create, beginning with children.

Thus, content creation by consumers is more valuable than creative content.

What emerged at PMA was the union of personal content creation (PCC) with the top two market contributions of iPOD (fashion and simplicity) and sharing of personal content. Such devices are first driven by portable backup storage and have expanded well beyond this. The sharing of content is central to the creation of personal content and these devices help enable this.

It is unlikely that PCCs will be cannibalized by still cameras, cell phones or video cameras because of power and size constraints. With mass storage, which is greater than any of the devices above, the PCC has an advantage in that it can store more and do more with the personal content than can be done on specific function devices.

PCCs will be fashionable and very easy to use. iPOD set this as a market entry criteria. We saw some of this in the devices at PMA but the market will be the ultimate evaluator of accomplishing this. We could well see that PCCs become the ultimate fashion statement and are embedded in clothing. This is not fanciful as one has only to look at the clothing in the Motorola booth at 3GSM to see how serious this has become.

PCCs are critically missing mobile connectivity. That doesn’t mean that they must have a cell phone built in. One vendor spoke of adding 802.11 in the next version and this is getting close. Wireless should allow for all forms of sharing and output. At 3GSM we saw IXI Mobil which makes the cell phone into a Personal Mobil Gateway and this is another means to accomplish connectivity. Bluetooth is another connectivity option. PCC should have no wires to accomplish its functions. Major barriers here are the lack of wireless printers and video displays.

As companies seek to gain early market share it will be a features race. But that race will be less important than the ease of use race which most will not notice until after a leader emerges.

This is very much a “learn from the market” product category. Those who watch from the side doing endless design refinements before coming to market will be eclipsed by those in the market generating a continual stream of new products. The market will determine the winners and those that move the fastest based on lessons learned have more favorable odds.

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Page updated 1/24/07
Copyright 4th Wave Inc, 2007