Two years ago, Michel's Camera and Video employed two people to sell its high-priced new line of cameras that recorded images on memory cards rather than film. These digital cameras were definitely still a yuppie toy - new, flash, grossly expensive and not capable of producing the results obtained from 35mm cameras that sold for a tiny proportion of the cost.
Twenty four months later, Clive Nixon, digital manager at Michel's Camera and Video, believes the digital camera market is really starting to take off. Growth in the area means there are now seven full-time sales staff dedicated to a range of cameras priced from under $500 through to $5000.
"The digital camera market is still in a state of flux," Nixon said. "And it is developing in entirely different directions."
According to Nixon, the last six months has seen vendors focusing increasingly on low-cost, low-resolution cameras designed for the consumer home user market. Yet while these cameras are proving popular, they are still a long way from taking over from their film-based cousins and, according to Nixon, much of the market is made up of home consumers taking photos to send via the Internet.
"You have to be really careful when you sell these cameras that you are selling the right level of expectations. People need to know exactly what they are getting," Nixon said.
Despite improvements in technology, digital camera performance is still limited by power and memory requirements. Nixon believes that many consumers are attracted to digital cameras because of the newness factor, but are unaware of the limitations of digital technologies.
"They go through batteries like nothing else and the resolution offered through the less-expensive models is still really low," he said. "You really can't sell them to someone who is about to go on a backpacking holiday, for example. They will run out of memory really quickly and it may be difficult to get photos developed."
David Hein, marketing manager at Adelaide-based distributor Hitech Distribution, is a self-confessed digital camera fanatic and, while he concedes there are still technological issues to be overcome, he believes digital cameras are already providing a reasonable alternative to their more traditional rivals.
"They are still a little pricey, but there are a lot of other benefits that customers are becoming aware of," Hein said "Not having to buy film, for example, and being able to print up your photos at home is a real bonus."
Hein believes amateur photographers will make up an important market for emerging digital camera resellers. Digital offerings allow aspiring photographers to get an idea of how their pictures will turn out without having to pay the costs of development.
"Digital cameras are great for photography students because they significantly cut down on their development costs," Hein said. "With a digital camera, they can take literally thousands of shots without chewing through vast amounts of film."
Segmenting the market place
The digital camera market place is fairly starkly divided between high-and low-end users. According to Michel's Nixon, high prices are still forcing the consumer market to the low end of the digital camera market.
"Eighty five per cent of our market consists of business people buying a camera for work purposes," Nixon said. "There is a growing consumer market, but it is still not significant."
Jeremy Way, sales and marketing manager of imaging and IT at Samsung Australia, recognises this division. "There is a definite technology split between the high- and low-end markets," Way said. "At the low end, the focus is on getting the price down and people are picking up low-resolution cameras because all they want to do with it is send a jpeg to their relatives."
Despite improvements in the technology, Way believes digital cameras will not replace film cameras until the costs of both the cameras themselves and the peripheral processing hardware is significantly reduced. "Once you factor in the price of a high-quality printer as well as consumables like the photo paper and the ink, it is still pricey," Way said.
One of the main factors to be taken into account when selling digital cameras to the consumer market, according to Nixon, is that low-end buyers are often not aware of the limitations of the technology. "The first thing we say to someone who walks in the door is what do you want the camera for?'. Then we match the camera to the purpose," Nixon said. "People who come in for business tend to know what they want, so it's just a matter of matching features with requirements."
Nixon's sales model requires significant consultation between sales staff and the buying public. Much of this consultation requires a fairly extensive understanding of the principles of photography, as well as the technology involved in the camera.
"They are literally a camera with a little computer inside them," he said. At the high end of the market, an understanding of photography is a necessary sales tool, as anecdotal evidence suggests that many of the high-end purchases are made by professional or semi-professional photographers.
Although the need for photographic skills to a large extend precludes many traditional PC resellers from participating in the high-end digital camera market place, there is still room at the other end of the market.
Samsung's Way believes PC resellers should become involved with lower-resolution cameras as they are becoming more important as peripheral devices to a standard PC bundle.
"The key at the consumer end of the market is offering a range of different cameras, so consumers don't have to feel they need to shop around," Way said. "Resellers should stock different cameras aimed at more or less the same market so they can offer a choice."
Choosing a camera
For the uninitiated, selecting a camera range from the cacophony and confusion of camera sales pitches could present a problem. Both Hitech Distribution's Hein and Michel's Nixon believe traditional camera manufacturers have the upper hand when it comes to digital camera manufacture.
"It all comes down to quality and [traditional] camera manufacturers understand the technology. Things like lens manufacture take years to perfect - some electronics manufacturers have even been sticking plastic lenses in their cameras," Nixon said.
Most importantly, traditional camera manufacturers appear to easily have the upper hand in image quality, however, there are still some major technological hurdles to overcome before digital camera uptake becomes more widespread.
While improvements in memory availability have led to the ability to store high-resolution photos, good-quality digital media is still prohibitively expensive.
Many camera vendors offer online processing, however limited memory space and Internet access combine to make digital cameras a poor choice for many holiday makers. For this reason, resellers need to focus specifically on the feature set digital cameras offer and make sure buyers are fully aware of the limitations of their limitations.
Despite these limitations, digital cameras at all ends of the spectrum are still proving popular in the run up to Christmas. Improvements in technology should see the market carried out of the "flash new toy" space and into the practical tools arena, and if PCs are any indication of digital evolution, resellers would be wise to keep an eye on the market.