Taiwan digital camera shipments experience a slowdown in Q2 2004

Enormous gains enjoyed by the digital still camera (DSC) industry in 2003 generated an optimistic outlook for 2004 shipment growth. However, recent demand in the end-user market has fallen short of expectations, while Japanese brand-name vendors have remained slow to outsource production. Taiwanese DSC makers have consequently seen a deceleration in growth compared to triple-digit year-on-year increases in 2003. In Q2 2004, Taiwanese DSC export volumes reached around 5.3 million units, a 19.6 percent growth from Q1 2004 and a 33.8 percent year-on-year increase.

Total shipment value exceeded $500 million, rising 18.5 percent from Q1 2004, a year-on-year increase of over 50 percent. Some Taiwan firms are lowering prices for older models in response to inventory pressures and slow liquidation. Although makers have rolled out new models that typically command higher prices, these have run into limp demand. Thus even newer models have succumbed to price erosion.

Shipments of 3-megapixel (MP) models hit over 40 percent, while 4MP and 5MP models collectively amount to nearly 40 percent of total shipments as well.

Another important development is the rise in popularity of camera phones. In markets such as Japan and South Korea, where advanced mobile phones are adopted at breakneck speed, 3MP camera phones are already rising in popularity. In other regional markets, 1MP camera phones were the major focal point of consumer demand in Q2 2004, casting a shadow on the DSC industry. However, with the busy Q3 2004 fast approaching, and with many Taiwanese suppliers poised to ship previously awarded orders, Taiwanese DSC shipment volume is expected to grow to 6.4 million units, or 21.8 percent sequentially. Year-on-year growth is anticipated to hit 29.8 percent. Total shipment value is likely to soar to $586 million, a 17 percent growth from Q2 2004 or 33.5 percent year-on-year.