Digital Camera War Heats Up
By Ryu Jin
Staff Reporter
When digital cameras hit the market in the late 1990s, ordinary consumers could not get enough of them. But, now after a decade, it seems to be some minor sellers who have to worry about extinction.
Amid the fierce war for survival, Samsung _ an underdog at the moment _ is poised to flex its distribution muscles to grab a bigger piece of the pie in the global market from the other vendors ahead of it _ Canon, Sony, Kodak and Olympus.
According to sources last week, Samsung Electronics is bracing itself for an earnest sales campaign through its global network by integrating the sales and marketing functions of Samsung Techwin, the group's aircraft engine and film camera unit.
``Samsung Electronics and Samsung Techwin have set up a task force to sell digital cameras through the group's global network,'' one of the sources said on condition of anonymity. ``Samsung's goal is to be the world's top seller by 2010.''
Samsung, the consumer-electronics powerhouse based in Seoul, has already produced successful results in television and printer markets with similar strategies of expanding supplies.
Samsung Techwin plans to produce 12 million digital cameras this year, emerging as the third-largest company in terms of production following Canon and Sony. Canon and Sony made 20 million and 16 million, respectively, last year.
Kodak, Olympus and Nikon in the middle-rank group have not been increasing their production due to the deteriorating business environment arising from the intensified competition.
A recent trend shows that a pair of leading players are gaining more and more profits widening the gap with other competitors. Canon, the frontrunner, boasts of an 18.5-percent operating profit rate.
Until last year, experts and industry sources expected that the world's digital camera market would reach ``saturation point'' within several years. IDC, a U.S.-based market research firm, also predicted last year that global growth would come to an end soon.
Unlike the general forecasts, however, the global market has been growing gradually, at least up to now. ``And that's why Samsung decided to make an aggressive move with expansion of supply to be the world's No. 1,'' the source said.
But there are also some concerns over whether Samsung's strategy will work in the digital camera market, divided into the high-quality goods including digital single-lens reflect (DSLR) cameras and the mass-production compact cameras.
Samsung's strategy could end up without substantial gains if it fails to acquire advanced technologies since its competitiveness is not strong enough yet.
To be sure, Samsung Electronics' global sales network will be of much help for Samsung Techwin. But the key to its success lies in whether the company can catch up with the frontrunners in technology in the next couple of years.