Mon, Oct 11, 2004 page11

• Camera phones becoming a must-have

  ALL THE RAGE This past year, consumers rushed to buy cellphones with color screens. Now, a new wave of replacement buying is being fueled by high-resolution built-in cameras

  • By Lisa Wang / STAFF REPORTER
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  Kelly Huang, a 22-year-old saleswoman at a Taipei branch of a Hong Kong-based women's wear chain, thought her cute silver clamshell Samsung T108 was good enough for her to chat with friends. But without a built-in camera, Huang recently found herself the target of growing complaints from friends -- who said they couldn't swap photos with her via cellphone.

  "In the past, for me mobile phones were simply a device for talking," Huang said. "But now, most of my friends have camera phones to take pictures of anything cool. Most of those pictures will become their screensavers or enrich their photo books."

  

  A model poses with Siemen's new 565 camera cell phone, with 1.3 megapixel resolution.

  PHOTO: LISA WANG, TAIPEI TIMES

  Huang, who earns an average wage of less than NT$30,000 a month, said she is now willing to pay half that amount to splurge on a camera phone.

  "It's a lot of cash," Huang admitted. "But if you don't have a camera phone, you're lame."

  Huang's example corresponds to a recent survey released by local handset vendor Dbtel Inc (大霸電子), which indicated that more than half of respondents without camera phones will consider purchasing such phones with one megapixel resolution. While, a higher 65 percent said they will consider replacing their old camera phones with a new model with resolution enhanced to one megapixel or higher.

  "As over 40 percent of local consumers have digital camera phones, we believe megapixel camera phones will be a potential growth area," Dbtel said in the statement released late last month.

  The survey was conducted during the four-day annual telecom show in late August in Taipei, said Dbtel, which did not release the number of people surveyed.

  Though the result is based on a small-scale survey of a limited group, it points to a clear trend. Camera phones are driving a new wave of replacement buying after the previous wave of replacement of color-screen cellphones for gray-scale models this past year.

  "It's a global trend that a camera is becoming a must for mobile phones," said Ann Liang (梁嘉鈴), an analyst with market researcher Gartner Inc in Taipei. "Camera phones are a key factor driving up handset demand in mature or saturated,markets like Taiwan."

  Other driving forces for mature markets next year will include MP3 digital music players, sliding cover phones and more commercial launches of speedy third-generation (3G) phones Liang added.

  "The question now is which kind of camera phones will dominate the market," Liang said. "In Japan and South Korea, they already have 3-megapixel camera phones on the market."

  In Taiwan, local mobile phone vendors and international big competitors have unveiled, or plan to launch soon, one megapixel, or 1.3-megapixel camera phones in a last-ditch effort to boost this year's unit sales after the industry's peak season in summer.

  Sony Ericsson Mobile Communications AG, the world's No. 5 mobile phone vendor, just pitched its 1.3-megapixel camera phone S700i, a fusion of handset and digital camera, into the market last week.

  Siemens AG followed close behind with release of its S65.

  "As the line between cellphone and digital camera becomes blurred, we believe megapixel camera phones will prevail next year after more players join the game and bring down prices," said Steven Yeh (葉順發), general manager of Sony Ericsson's Taiwan branch.

  Since the launch of the S700i, with a big 2.3-inch liquid-crystal-display (LCD) screen and a swivel design, Sony Ericsson said the model has been a focus of cyberspace discussion at sites such as Sogi.com.tw (手機王), which provides news, reviews of new models and online trading. Despite this, Yeh said he did not expect camera phones to entirely replace digital cameras soon.

  "Only when the resolution is improved to 2-megapixel, or even higher, is there any likelihood of that," Yeh said, adding that his company will roll out such high-end models next year.

  To capture the new wave of handset replacement, Inventec Appliances Corp (英華達), which sells handsets under the OKWP brand, became the first local firm to launch a megapixel camera -- its i516 -- in the second quarter. Rival BenQ Corp (明基電通) rolled out a 1.3-megapixel camera phone S700 more recently.

  More vendors, including US handset giant Motorola Inc and Dbtel, are to join the battle later this quarter.

  Finland's Nokia Oyj said it would not miss out. The world's largest mobile phone vendor is scheduled to release its second megapixel camera phone next month after its first model, the 7610, became popular after its July launch.

  With a high price tag -- at NT$19,900 -- Senao International Co (神腦國際), the nation's No. 2 cellphone chain store, said it is still selling about 5,000 Nokia 7610s a month, and expects to sell more next year.

  "Demand is likely to shoot up in the second half of 2005 after prices for such high-end mobile phones fall to an acceptable level of around NT$12,800 each," said Senao International vice president Bruce Chiu (邱致忠).

  Chris Tan (譚志忠), an analyst with Yuanta Core Pacific Capital Management (元大京華投顧), said prices will be a major obstacle to the popularity of high-end camera phone models.

  "Without `killer applications' emerging anytime soon, megapixel camera phones may become the main factor prompting purchases by mobile users picky about imaging quality," Tan said. "But for most people, they are still too expensive to afford."
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