Discount Digital Camera

This may be the year that digital minilabs finally make a splash with retailers, a really big splash to be precise. With price points hovering around $200,000, the choice to invest in either new or upgraded units is a hefty one, and a choice retailers will increasingly be faced with going forward.

According to the Consumer Electronics Association, 4.1 million digital cameras were shipped into the marketplace through October 2001. And once the final numbers are tallied, this number will likely rise to 6 million, said Sean Wargo, senior industry analyst for the association.

Research from NPDTechworld shows unit sales of digital cameras increased 70.2% during the most recent holiday season compared to the same period in 2000. According to analyst Ed Lee of Lyra Research, household penetration of digital cameras is up near 13%. And many of these camera owners are looking for a way to make prints from digital media.

Sure, most discount department stores, drugstores, specialty camera shops and even select electronics retailers offer some form of services either online or through an in-store kiosk. But for the technology to truly takeoff and photofinishing services to really benefit, the process needs to more closely mimic that of traditional prints.

"A kiosk is a solution right now, but it's not the best solution," said Lee. Consumers need to be able to walk up to the photo counter at their local retailer, drop off the film--or in this case digital media card--and have the option of picking up their prints within the hour. Fulfilling these criteria requires an on-site digital minilab. Really, nothing less will do.

At the Photo Marketing Association's annual convention and trade show being held this week in Orlando, manufacturers will be showcasing entire families of new products aimed at getting retailers up to speed on digital print services. "There is a lot of equipment coming out that will make getting prints from digital media as easy as [from film]" promises Gary Pageau, executive editor with the PMA.

Phogenix Imaging, the joint venture formed between Kodak and Hewlett-Packard two years ago, is unveiling its first product, a digital minilab, for a mere $39,900; a $49,900 model comes with a high-speed scanner that adds a full-roll film input capability.

Gretag is offering a full line of digital print solutions, starting with the entry-level Master Flex digital miilab that simply upgrades existing analog processors to accept digital media to a full-fledged dry chemical system. Even digital Kiosks are becoming better print options for retailers. Polaroid is showcasing its first unit utilizing the new Opal technology with a print capability of one print in less than two seconds.

Greteg's kiosks can be custom-configured, have the ability to produce prints on the spot or can be linked to a store's photo department for one-hour printing. "We're trying to simulate the film drop-off/finishing experience," said Bill Orr, Gretag's director of marketing. "The next generation of kiosks offers significant advantages over the installed base and allows for price-oriented retailers to offer higher service in a low-maintenance product."

For the first time, Kodak is offering a version of its DLS software that enables minilabs with an open architecture. "This allows it to work with third-party software applications, and DLS minilabs can be hooked into outside sources and kiosks," explained Susan Clark, marketing director of new products and services for photofinishing. "This is really going to help retailers expand the choices offered to their customers."

Fuji offers full-fledged printer solutions with its Frontier minilab and is backing up its products with a marketing campaign to better educate both retailers and consumers on how to make digital prints. The program, which uses countertop displays, mats, decals and stickers, uses the phrase "digital camera developing" to intentionally link the process with the familiar analog photofinishing experience.

"Fuji researched digital camera users and their behavior and the results really pointed out a lot of opportunities for retailers," said Joe Welch, director of marketing for retail digital solutions. "Approximately 60% of digital camera owners are not aware there's any retail opportunities to get prints."

And while no retail chain is expected to replace its entire stock of analog systems with digital outright, vendors say most are now opting for digital minilabs as replacement units or in new stores as they open. Additionally, retailers are looking to upgrade existing units to accept digital media, said Welch.

"Digital camera consumers fully expect the same experience as with film," said Welch, in terms of pricing, availability, quality and pretty much everything else.

RELATED ARTICLE: APS UPDATE: It's not dead yet. (Photo)

"APS is dead, you know," proclaimed a photo industry reporter at a recent media event. Given the attention being paid to digital imaging and the announcement that several manufacturers were abandoning the format, that may well appear to be the case. But things aren't always as they appear.

"There still is significant vitality for that market," said Chuck Westfall, assistant director of the technical information department for Canon's camera division. "We see a continuing demand."

The 24 mm film lends itself to a more compact design and easy film loading, all in an affordable price range. "APS does very well in its price points," said Gary Pageau, executive editor for the Photo Marketing Association. "It's a niche product."

Minolta, Konica, Olympus, Pentax and Nikon all announced they would no longer make APS cameras; Canon, Fuji and Kodak continue to support the format. Each has at least one new model being announced this month. Canon's newest Elph replaces an earlier model and will likely sell for approximately $179, rounding out the Elph line of five APS cameras. Fujifilm is releasing a new model in four metallic colors aimed at a younger audience that are priced near $40 per unit and positioned as a "lifestyle camera," according to the company.

"We believe in the APS business," said Joe Vaughey, senior brand manager for consumer film at Fujifilm. "We're in this for the long haul." Of course, film manufacturers have more at stake in this format, and will continue to offer APS film long after cameras cease being marketed.

The newest APS unit from Kodak offers the benefits of APS and some of digital combined. The next-generation EasyShare is an APS-format camera with a preview function for full roll review, memory to store up to 75 images and a docking station that allows images to be transferred to a computer and e-mailed--just like digital.

By offering consumers the electronic viewing and transfer of images combined with the versatility and ease of the APS format and the ability to obtain traditional prints, Kodak may finally have realized the benefits of APS in a truly differentiated product at a mass market price. Kodak expects to price the camera near $200 when it ships late this year.

But has it come too late to generate interest in the format?

APS may well be phased out somewhere down the line. "The days of APS are numbered," believes Ed Lee, an analyst with Lyra Research. Digital camera penetration already has surpassed that of APS, which remains stagnant at around 10%, Vendors are increasingly looking to digital imaging for profits.

"Four to five years from now, it's hard to tell what will be," acknowledged Westfall. "But all we can really do is just take it a step at a time."

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