Ability Enterprise Co (佳能企業), which manufactures digital cameras and camera modules for major Japanese brands, expects the global market for digital still cameras to contract by between 15 percent and 25 percent this year.
“This year will be a hard year for digital still camera subcontractors as the market undergoes transformation,” Ability Enterprise president Roger Tseng (曾明仁) told investors and analysts yesterday via an online conference call.
Last year, total sales of compact digital still cameras declined to 90 million units from 120 million units in 2011, as consumers shifted to mobile phones with camera functions, Tseng said, adding that the impact of mobile phones was larger than he had expected.
For instance, mobile phones are now equipped with cameras with 13 megapixels, which are almost as high quality as the 16 megapixel cameras produced by Ability Enterprise, he said.
Tseng said most of the cameras the company produced last year had 6x zoom lenses, but 10x and 12x zoom lenses would be the trend differentiating digital cameras from mobile phones. Cameras with 20x to 50x zoom lenses could also be a profitable segment for camera subcontractors.
As for the market for single-lens reflex cameras, Tseng said major brands still hold the key technologies and he did not see these brands outsourcing production to subcontractors this year.
Last year, Ability Enterprise posted a profit of NT$1.35 billion (US$45.51 million), up 23.9 percent from the previous year, due to lower raw material costs and higher production efficiency.
Efforts to produce cameras with better functions also helped boost the company’s earnings last year, it said.
As the company has cut production of cameras with lower than 10x zoom lenses, while increasing production of higher-margin cameras with 21x zoom lenses and higher, average selling prices are expected to rise in the second quarter and boost revenues, Tseng said.