Megapixel Cameras' Reach to Expand Outside Asia

Megapixel cameraphones, first to hit Asian markets, are poised to make their global debut as at least seven additional megapixel handsets have been announced at the end of last week's CTIA show. As a standalone device, megapixel cameras signify the impending demise of low-end, standalone digital still cameras. As a network connected device, megapixel cameras have the potential to push imaging more into the realm of "tool" than "toy." According to ABI Research, these devices increase the profit potential across the value chain, by boosting IC content, raising handset ASPs, and increasing data ARPU, operators' longstanding goal, as voice ARPU declines.

The research firm expects nearly 70% of all handsets to be embedded with cameras by 2009, with a majority shifting to multi-megapixel resolutions by the end of the decade.

Moving to multi-megapixel phones typically requires a shift to the more expensive yet higher image quality of CCD sensor technology, versus traditional CMOS. "The real boon to IC manufacturers is not so much this shift, but the addition of high-resolution displays, faster processors and additional memory," states Alan Varghese, Senior Director of Wireless Research at ABI Research. "As a new standard, multi-megapixel cameras drive up overall IC content."

As consumers recognize the advanced power that these handsets will be packing, they will replace their low-end digital cameras. This added functionality will bring some pricing power back to the handset OEMs. Among the companies announcing the pending availability of megapixel handsets are Audiovox, Kyocera, Nokia, Samsung and Sony-Ericsson. "Even Motorola, long criticized for falling behind in the race to deploy high-end handsets, is showing signs of a turnaround," explains ABI Research analyst Kenil Vora. "By integrating a megapixel camera, an MP3 decoder, and Bluetooth in a CDMA 1X handset, the Motorola V710 demonstrates solid consumer-focused product development."

The final element to this equation is the operators, who are poised to benefit from subscribers sending larger, higher resolution image files across the network. Enterprise customers, who have long ignored imaging functionality, will now begin to see the benefits of cameras as image quality improves. With larger files and more subscribers using the cameras, the net result is a two-fold punch to increasing data usage driving ARPU."

Posted to the site on 30th March 2004