Copyright (c) 2006, 
Dow Jones & Company Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.Electronics makers are racing to improve the quality of photographs taken by cellphone cameras.
Nokia Corp. is launching a 3G sliding phone with Wi-Fi and an integrated three-megapixel digital camera for U.S. consumers in the next few months. Samsung Telecommunications America L.P., a subsidiary of Samsung Electronics Co. Ltd., is offering three two-megapixel digital camera phones in the U.S., including the a970 EV-DO swivel camera phone. Motorola Inc. and Eastman Kodak Co. announced last week a 10-year partnership that will allow them to develop mobile camera phones with Kodak sensors that will make it easier for consumers to store, share and print photos directly from their devices. The phones are expected to hit the market late this year.
The push for higher resolution could mean that some camera cellphones would rival disposable cameras and eventually even some stand-alone digital cameras in picture quality by offering a great number of megapixels. Cameras with more megapixels produce pictures that can be enlarged to greater sizes without negatively affecting photograph quality.
Demand for camera-equipped cellphones in the U.S. is rising as consumers seek to buy more advanced multimedia phones for taking pictures on the go, listening to music, accessing the Internet, downloading and playing games -- as well as making calls.
Nationwide, sales of phones with integrated cameras rose to more than 53 million last year from 22 million in 2004, according to a survey by Boston-based research firm Yankee Group. Out of the $6.6 billion spent on phone purchases in the U.S. last year, consumers spent $4.1 billion on camera phones, according to the report.
Most consumers have come to expect cameras on their phones, and cameras come as standard offerings on most new models. The number of American consumers who bought camera phones grew to 49.4 million as of October 2005, from 23 million in November 2004, according to Seattle- based research firm M:Metrics Inc. About 30 million U.S. camera-phone owners took photos with their camera phones as of October 2005, compared with 16.7 million in November 2004, M:Metrics estimated.
Among the other new camera-integrated phones now available in the U.S. is the W800 Walkman, a two-megapixel phone with auto-focus and Bluetooth from Sony Ericsson Mobile Communications AB, and the Nokia N90, a two-megapixel digital camera phone with auto focus, integrated LED flash and on-device photo-editing capability.
Nokia's phone, which became available in the U.S. late last year, is equipped with high-quality imaging optics and is priced at $399 if consumers sign up for contract with T-Mobile USA Inc. Other newly released camera-enabled phones include Sony Ericsson's two-megapixel W800 Walkman, which costs $499 and is available only online and in Sony Ericsson stores. Samsung's a970 two-megapixel camera phone, which is available through Sprint Nextel Corp. and Verizon Wireless at $249 and $299, respectively, has a rotating flip design that works more like a camcorder screen for easy viewing.
This year, Nokia is bringing a three-megapixel camera phone to the U.S. market. Dubbed Nokia N80, the new phone will be the first device that features universal plug-and-play, or UPnP, technology, functioning as a remote control for wirelessly swapping folders between TV sets, compatible audio equipment and PCs. Samsung plans to continue to increase the megapixels and improve camera capability of its phones in the U.S., moving to three megapixels and possibly more this year.
Now, consumers often can use their cellphones, which most carry with them all the time, instead of running to stores to buy one-time-use cameras. Cellphone cameras are also connected to wireless networks, and users can immediately upload and share pictures.
While incorporating cameras into phones could threaten the future of one-time use cameras, it is driving sales for stand-alone digital cameras, says Tony Henning, a senior analyst with Future Image Inc., a consulting group in San Mateo, Calif. He argues that consumers are having their first experiences with digital photography via their cellphones. If they like what they see, they might buy digital cameras as well.
The reverse is true for disposable cameras, Mr. Henning says, which are convenient for those who left their bulky cameras at home. He says sales of single-use cameras dropped by half in 2005.
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