The Shape of Camera-Phones to Come

SAN MATEO, CA -- 11/11/2004 -- With forecasters predicting sales of 280 million units in 2005, the camera-phone has rocketed to the top echelon of personal electronics, earning the fastest acceptance of any consumer device in history.

However, this meteoric growth tends to obscure the fact that camera-phones are a very recent development, having first appeared in 2000 in Japan only, and emerged on the global scene a scant two years ago. “These devices are still in their infancy,” says Future Image President Alexis Gerard. “It’s a state of development comparable to where personal computers were in 1984 -- before the Macintosh or Windows.”

Last month at the sold-out Mobile Imaging Summit executive conference, 140 invited senior executives from more than 10 countries in North America, Europe and Asia peered into their crystal ball to discuss and define the future of the camera-phone. The Summit -- whose third edition was held in Monterey, CA, on October 28-29 -- presents a unique venue for this exercise, as the only conference to gather senior executives from the three key industries -- Imaging, Telecommunications, and Information Technology -- whose convergence defines the mobile imaging space.

Executives in attendance were asked to evaluate five distinct and complementary evolutionary paths for the imaging functionality of wireless phones and other personal data devices. In each case, they were asked to opine whether that functionality is essentially here today, will be delivered in one year, delivered in three years, or never make it to market for either technical or customer-acceptance reasons. In some cases the attendees expressed remarkably similar views, while in others the different industries had notably dissimilar outlooks.

The first evolutionary path was defined as “The Ubiquitous Camera.” When a camera is embedded in most people’s cell phone, they will in effect have it with them at all times, unlike traditional cameras (film or digital), which are only taken off the shelf in preparation for a picture-taking occasion (a vacation, a child’s birthday, or some other special event). Having evaluated the performance of the one-megapixel camera-phones provided at the event by Nokia, and considering the recent introduction in Asia of three- and five-megapixel units, the majority of Summit attendees -- 65% -- declared the Ubiquitous Camera to be real today, an opinion shared broadly across all three industries represented. However, considering the weaknesses of today’s camera-phones compared to “pure” cameras (including the absence of lens cover, the limitations of current optical zoom lenses and flash components on phones, and the difficulty in many cases of transferring images to a personal computer) significant minorities -- 16 and 19 percent, respectively -- opted for the more conservative one-year and three-year timeframes.

Overall sentiment was somewhat less bullish with respect to “The Wireless Camera,” a device that offloads the photos it takes directly to a storage location or recipient, effectively eliminating (or at least reducing) the need for storage cards or other portable media. While only a very small minority -- two percent -- deemed this unlikely to ever materialize, most attendees somewhat cautiously forecast the capability for either one year (33%) or three years (39%) down the road. However, a significant minority of 26% declared it “here today,” reflecting a difference of perception between the telecomm attendees, among which 56% of respondents expressed that opinion, and the photo-imaging attendees, 75% of whom were in the one- and three-year camp.

The third evolutionary path was defined as “The Media Phone,” a device that receives and displays high-quality still and video images (news, sports clips, maps and directions, and more). Here too, respondents from the telecommunications industry were most optimistic, with the majority of them declaring the capability “here today,” while photo imaging respondents were evenly split between today, one year, and three years. Computer industry respondents were primarily in the one-year and three-year camp. Overall, 37% of attendees voted for “here today,” 33% voted for “one year,” and 30% voted for “three years.”

Next was “The Visual Analyzer,” a camera-phone that interprets patterns within an image -- either in the device itself or by calling on a remote server. Examples include taking a picture of a bar code on a product and initiating a transaction to purchase it, or reading an iris or thumbprint and passing on the results to request a security clearance. The majority of attendees -- 65%, spread fairly evenly across all three industry sectors -- were clearly in the three-year camp. Twenty-five percent of respondents believed one year will be sufficient to attain this level of performance, while small minorities -- seven percent and three percent, respectively -- believed that it is here today, or that it will never happen.

The most varied range of opinions was expressed with respect to “The Visual Phone,” a device which sends and receives both voice and images -- videoconference, real-time transmission of images, or both -- such that language and visuals are both fully utilized to deliver the most effective person-to-person communication. The majority of respondents -- 56 percent -- believe this capability will be available within three years. Significant minorities of 13 percent and 17 percent, respectively, believe it is here today or will be within a year, and another significant minority of 14 percent believe the Visual Phone to be an unrealistic vision.

Other sessions at the Mobile Imaging Summit covered the evolution of hardware and software components and enabling technologies, the outlook for network infrastructures, opportunities in service printing and self printing of camera-phone images, a venture capital roundtable, opportunities in delivery of commercial content to camera-phones, and a showcase of emerging technologies.

Future Image publishes a five-DVD set of the presentations and discussions at the Mobile Imaging Summit, complemented by a 16-page report recapping the Summit discussions and providing commentary from Future Image analysts. The DVD set is available for $329 directly from the Future Image web site at www.futureimage.com/sfm.cgi?t=p/DVDM or by calling Customer Service at (650) 579-0493 x42.

The Mobile Imaging Summit is hosted jointly by analyst firm Future Image Inc. and the International Imaging Industry Association (I3A.) The most recent edition was sponsored by Hewlett-Packard, Adobe Systems, Agfa Photo, Digimarc, DxO Labs, IBM, Kodak, LightSurf, Motorola, Nokia, Pixel Magic, Silverwire, and Sprint, along with Association Sponsor CTIA WIRELESS 2005.

The 2005 editions of the Mobile Imaging Summit are scheduled for Amsterdam (the Netherlands) in June (focus on Europe), and Monterey, CA, in the fall. For more information please visit www.MobileImagingSummit.com.

About Future Image

Future Image Inc. is the leading independent center of expertise on the convergence of imaging, technology, and business, with primary emphasis on Mobile Imaging. It publishes two continuous information services, the Future Image Executive Information Service, and the Future Image Mobile Imaging Report (www.mobileimagingreport.com), as well as research studies on the impact of emerging imaging-focused technologies or business trends in three categories: Infrastructure, Appliances, and Services. Recent topics include: Print capabilities of Camera-Phones, Adoption of Consumer Kiosks and Print Services, and the Convergence of Still and Video Capture Devices. Future Image is the official information and research partner of the International Imaging Association (I3A), and the Managing Partner of the Visual Communication initiative, supported by Adobe Systems, Eastman Kodak, Epson, Hewlett-Packard, IBM, LightSurf, Microsoft, Nikon and Sprint. Founded in 1991, the company is headquartered in San Mateo (CA).

Future Image’s limited-attendance executive conferences for decision makers are carefully designed across content, venue and amenities to maximize opportunities for participants to identify areas of mutual business advantage, and to make the high-level connections necessary for market leadership and competitive advantage. Sessions are conducted in an interactive format that promotes exchanges among participants both onstage and off. For more information please see www.mobileimagingsummit.com.

Mobile Imaging Report & Future Image Report

Attendees at the Mobile Imaging Summit conferences receive free subscriptions to the MIR and EIS continuous information services from Future Image to keep them abreast of industry developments between conferences. The MIR service provides a weekly collection of news stories and analysis, a database of over 3,500 archived stories, six in-depth reports each year on key issues in the industry, and private consultation with MIR’s editor and lead analyst, Tony Henning. For more information please visit www.mobileimagingreport.com or email Jbyrd@FutureImage.com.

The International Imaging Industry Association (I3A) is the leading global imaging industry association, driving growth of and setting standards for the photographic and information imaging markets. As the industry focal point, I3A offers a framework and environment where members can quickly find resources to solve critical issues and develop market solutions. Members of I3A work together to find common ground for advancing the industry and to enable better products and services for their customers. I3A has focused on promoting industry collaboration on mobile imaging since early 2001. Information about I3A can be found on the World Wide Web at www.i3a.org or by phone at 914-698-7603.

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Future Image

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