Digital Imaging Evolves Beyond the Scanner

First it was scanners, and now digital cameras are catching up. What started as an easy way to transport photos to friends, families and co-workers has now become an industry known as “infoimaging.”

The scanner market has reached maturity in the United States and Western Europe, according to InfoTrends Research Group, Inc., which means the $3.1 billion in scanner revenue may start to decline and new digital imaging solutions may not help.

North America and Western Europe each account for approximately 40 percent of the total of the worldwide scanner revenue. Worldwide scanner revenue will reach $2.6 billion in 2006, and a total of 24.7 million units will be shipped. However, the rest of the world will continue to grow in unit shipments at a rate of 4 percent annually. Through 2006, the scanner market will be both positively and negatively impacted by other digital imaging solutions, including digital cameras, film digitization services and photo kiosks.

“Although alternative digital imaging solutions pose a competitive threat to consumer imaging scanners in North America and Western Europe, they also help to drive the worldwide consumer digital imaging market by increasing awareness of digital imaging and its applications,” said Janet Kauffman, research analyst at InfoTrends Research Group. “Scanners continue to be an important part of the digital imaging market, and according to our U.S. Scanner Penetration Study, 48 percent of those who have uploaded a photo to a photo service Web site used a scanner to create at least some of the images that they posted online.”

The worldwide scanner market leader is Hewlett-Packard. In 2001, H-P is projected to lead both the North American and Western European markets. In addition, Visioneer and Umax are strong players in North America, while Canon and Agfa are among the top vendors in Europe.

North American scanner penetration has reached nearly one-third of all U.S. PC households, making it the most established digital imaging solution today, InfoTrends found. Key trends that have led the scanner market’s rise include price stabilization, the usage of innovative design in the scanner casing and the increasing popularity of brand-name scanner vendors. However, the North American scanner market is projected to decline at a rate of 1 percent annually through 2006, contributing to a competitive retail environment and further consolidation among scanner vendors.

In Western Europe, 2001 scanner shipments will increase 4 percent over 2000, leading scanner shipments to total 9.6 million units. Throughout InfoTrends’ forecast period, scanner shipments will remain flat. In 2001, Germany, Britain and France together will make up 59 percent of the entire European market.

The installed base of digital cameras in North America is expected to reach 21 million units, achieving a household penetration of 18 percent, according to InfoTrends, even though the economic downturn of the first half of 2001 has caused companies in the consumer electronics, computer and photography markets to lower expectations for sales growth. In 2001, digital camera unit sales are forecast to reach 9.4 million, growth of 55 percent over 2000. In 2001, InfoTrends expects digital camera unit sales to nearly match mass market scanner unit sales.

“This is a clear turning point in the consumer digital imaging market,” said Michelle Lampmann, market research analyst. “Digital cameras have achieved a price-performance level that is compelling to consumers, particularly the sub-$300, 2 million pixel models. Additionally, consumers recognize the value of purchasing a digital camera in a time of greater justification for personal expenditures, because they may expect to spend less on film and photo-processing services.”

Though digital cameras offer the benefit of instant gratification and free sharing of photos via email and Web sites, consumers must also learn a complex set of procedures in order to have a satisfactory experience with their digital camera. The new set of procedures mostly places the burden on the consumer for managing and printing their digital photos. According to InfoTrends, digital photography is still more complicated than it should be for the average consumer.

The convergence of technology and imaging was the focus of a study by Eastman Kodak Company and Roper Starch Worldwide, which examined what it calls the “infoimaging” market. The Kodak/Roper survey found that enterprises are high on digital imaging, with 90 percent of senior business and technology executives at Fortune 500 and Fortune e-50 companies considering digital imaging a key growth category, and the majority likely to invest in imaging technology over the next five years.

Nearly three-quarters (72 percent) of executives agree that the ability to create and display digital images on the Internet has been essential to the growth of e-commerce and that digital imaging technologies are fueling the growth of new markets on the Internet. Almost 90 percent agree that imaging innovations, such as increased photo resolution, animation and 3-D viewing, bring a valuable “human element” to the Internet.

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