In a post last April, I wrote that the digital camera market provides a remarkable case study of the phenomenon that Clayton Christensen calls “overshooting”: Competition among the providers of technology products inevitably pushes the technology beyond the needs of most customers. The technology overshoots the market, and as a result the basis of competition shifts away from traditional measures of technological prowess. In digital cameras, that traditional measure is the megapixel count. Now that the average camera has more megapixels than most buyers require, camera makers will have to emphasize other qualities to differentiate their products – ie, megapixels don’t matter.
In today’s New York Times, David Pogue shows how camera makers are responding to this phenomenon. His article, called Pixel Counting Joins Film in Obsolete Bin, quotes a top marketer with camera-maker Canon: “In compact cameras, I think that the megapixel race is pretty much over. Seven- and eight-megapixel cameras seem to be more than adequate. We can easily go up to a 13-by-19 print and see very, very clear detail.” Pogue calls that “a shocker,” but really it’s just a technology market going through its normal maturation.
Pogue goes on to suggest some areas that camera makers will fight over now that the megapixel war is over: the look and feel of cameras, image stabilization techniques, video recording capabilities, wireless networking, software capabilities, and improved batteries. Competition, in other words, is shifting away from the core technology, as traditionally defined, to design and features. That’s what happens in consumer markets as the underlying product becomes, in essence, a commodity. In industrial markets, where design and features are relatively less important to buyers, competition tends to shift to service or simply to pricing; the lowest cost producer often wins once the technology has overshot the mainstream of customers.
Anybody involved in a company competing on the cutting edge of a new technology might want to take a close look at the evolution of the digital camera market. For a while, the cutting edge is where the customer is. Then, and the shift can happen quite suddenly, the customer is somewhere else.
Nick, but with 1 or 2Mp pixels Camera PHONES coming, the technology focus will change there. Of course, once you use a 2 Mb px camera phone and take a 5 by 7 with it most people realise – they have been taken for a ride with these 6 or 7 Mp cameras.
In market like India, digital cameras are sparse and in fact costlier than what they cost in the US! I am sure these areas in the world will skip the digital cameras war and ride the camera phone war!
boy that is such an over generalization. In industrial markets where corporate sourcing likes supplier “consolidation” and they reduces future competition you actually end up with over pricing given the “account control” advantage the incumbents enjoy. Markets reach equilibrium on their own (in convoluted ways) if we let them…corporate procurement and commentators often send wrong signals to vendors…
For consumers, we’ll see a combination of video and photography before we’ll see phone/camera combinations taking over digital cameras. The first solves a contradiction, the second doesn’t. That’s just a gimmick.
The trend itself is a nice one, it is a prime example of how innovation of a product matures from the new function/principle combination (digital photography instead of chemically based) to one of using function/principle combinations from other contexts (WiFi, video) to reconfiguring the existing solution (use better batteries). All to provide better quality or more features to the buyers of digital cameras.
I already own a 7.2 megapixel camera that provides limited video capabilities and an excellent video camera that provides limited photo capabilities. Will the next one do both at the best quality of both? Make it so!