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The Honolulu Advertiser
Posted on: Tuesday, June 19, 2001

Wired In
Digital camera prices plummet with rise in supply, competition

By Greg Wright
Gannett News Service

Prices for digital cameras are falling — a lot. Just ask amateur photographer Dennis Elliott of High Point, N.C.

He bought an Olympus C-3030 Zoom digital camera (www.olympusamerica.com) for $900 last September. Less than a year later, it sells for about $550.

"You just don't know when you buy something how much prices will go down," said Elliott.

A combination of factors is pushing the cost of digital photography down.

New, more powerful cameras are arriving on store shelves, leaving retailers with inventories of existing models. To help move those inventories, the camera makers are cutting prices. What's more, the prices for portable memory cards used in digital cameras and other compact electronics are falling as companies implement more efficient manufacturing techniques to keep pace with consumer demand.

"There is more supply, more competition and a greater range of cameras available," said Liz Cutting, an analyst with NPD Intelect in Port Washington, N.Y.

Digicams remain popular with consumers. Americans are expected to buy 6.4 million digital cameras in 2001, 36 percent more than in 2000, according to the Consumer Electronics Association. By 2004, the association estimates digital camera sales will reach 12 million annually.

The average digital camera purchase price was $427 at the beginning of 2001, down from $501 at the start of 2000, according to NPD INTELECT.

Consumers also are getting more bang for their bucks, said Chris Chute, an International Data Corp. analyst in Framingham, Mass. Digital cameras with 1 to 2 megapixels of resolution, enough to print crystal-clear photos as large as 4 by 6 inches, now sell for about $300 compared to $500 last year, he said.

Prices for 1-megapixel cameras could drop as low as $150 by the holidays now that 2-, 3- and even 4-megapixel cameras are common, Chute said.

Retailers trying to move existing inventories are pressing manufacturers to lower prices, said Karl Wardrop, digital imaging product manager at Hewlett-Packard in Palo Alto, Calif. Hewlett-Packard (www. hp.com), has already dropped the price tag on several models, he said.

For example, the HP 618 Photosmart with 2.11-megapixel resolution and a 3X optical zoom is now priced at $399 compared with $599 last year, Wardrop said.

Memory card prices are falling as fast as digicam prices, said Bill Frank, executive director of the CompactFlash Association in Palo Alto. Prices of CompactFlash cards, the most popular form of image storage, dropped 50 percent in 2000 and should drop at least another 30 percent this year, he said.

Photographer Elliot said he bought a 64-megabyte memory card last month at NewEgg.com (www. newegg.com) for $49 that recently sold for $75. This month, NewEgg is selling the same card for $45.

But despite falling prices and booming sales, analyst Chute said digital cameras, which comprise 18 percent of cameras sold according to the Photo Marketing Association International, aren't expected to replace film cameras anytime soon.

Chute said some potential buyers are turned off by all the computing power, such as photo-quality printers and image-editing programs, necessary to take advantage of a digicam's special abilities.