Ray T. Mahorney (rmahorney) wrote in pcs_ready_link,
Ray T. Mahorney

Are camera phones losing their snap?

Are camera phones losing their snap?

By Ben Charny


Story last modified Mon Mar 14 09:36:00 PST 2005

NEW ORLEANS--Cell phones with embedded cameras will go from runaway hit to
small-time niche service if major problems remain unaddressed, Eastman
Kodak's chief executive told a major wireless show here on Monday.
"Today, camera phones are imaging-capable but photographically disabled,"
Kodak Chief Executive Dan Carp said during a keynote address at CTIA
Wireless 2005.

Carp's remarks throw cold water on the cell phone industry's biggest
success story of the last two years. Camera phones are credited with the
surging use of wireless data services in the United States, with some
wireless operators saying their data revenues have doubled in the last two
years. Last year, 180 million camera phones were sold worldwide, a 130
percent increase over 2003. Most analysts believe the growth will continue,
with about 280 million camera phones sold by the end of the year, and there
may be one billion camera phones in circulation by year's end.

"Mobile imaging may be the biggest breakthrough since the Brownie camera
(one of Kodak's first cameras ever)," Carp said.

Yet on Monday, Carp said a Kodak market study found that most camera phone
owners find their devices less than satisfying, even though they used the
cameras to snap about 70 billion photos last year. Nearly two-thirds of
camera phone owners rarely, if ever, upload pictures to a computer. And 70
percent never (or rarely) send photos to other phones. Notoriously short
camera phone battery life; photo quality, especially in daylight; and the
complexity of printing pictures are causing major headaches for the 180
million camera phone owners worldwide, according to Carp.

"These are all warning signs," he said. "If we're not careful, imaging
could fade to niche application in phones. Some think its happening already."

The industry isn't ignoring the problems, say executives attending Monday's
keynote. Many wireless manufacturers and operators are trying to make
inroads to solve the problems, with Sprint and even America Online introducing

easier methods to share camera phone photos with friends, or print them.
Kodak is now working to let cell phones use the EasyShare printer for
digital cameras, which eliminates the need to upload digital photos first
onto a personal computer.

Camera phones represent a crossroads for the cell phone industry. Embedding
cameras into cell phones has helped U.S. consumers realize that their
phones can also access the Internet, whether to post camera phone photos on
a public Web site, watch a specially formatted TV show, send a photo to a
friend's handset or use any number of offline printing services. As a
result, wireless operators are much more interested, and willing, to give
new kinds of data services a try.

This scenario is being played out by U.S. wireless operators, which are now
using the success of camera phone sales to introduce the logical next step:
video services.

One of the most hyped is V-Cast from Verizon Wireless, which launched on
Feb. 1. On Monday, Verizon Wireless beefed up its lineup of TV shows
Verizon Wireless subscribers can view on their phones. One new addition is
specially made versions of "The Simple Life: Interns," a reality show that
follows the exploits of socialites Paris Hilton and Nicole Richie.

"We are pleased with the success of VCast," Verizon Wireless Chief
Executive Denny Strigl said.

Carp, however, called cell phone video a mistake, saying "shifting
attention to video could result in lost opportunity for all of us."
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