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Mon 1 Jan 2007 12:00 AM

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Handsets spark lens demand

Consumer demand for cameraphones booms, despite technical challenges, claims analyst iSuppli

Mobile phones have emerged as the single largest market for image sensors, surpassing the entire consumer electronics segment to become the main application for both Charge-Coupled Device (CCD) and CMOS image sensors, according to iSuppli.

The company’s findings provide further evidence of the rapid growth of the mobile cameraphone market worldwide.

Revenue from shipments of image sensors for mobile phones will grow to US$5.9 billion by 2010, increasing at a Compound Annual Growth Rate (CAGR) of 27.4%, up from US$1.7 billion in 2005, iSuppli predicted.

Unit shipments of image sensors to mobile phones will grow to 1.2 billion by 2010, increasing at a CAGR of 19.7%, up from 484 million units in 2005.

In 2005, 199 million image sensors were sold for all other applications other than mobile phones — including digital still cameras.

By 2010, this disparity will increase, with nearly 1.2 billion sensors shipped for mobile handset use and slightly less than 350 million destined for other applications.

“Since the handset sensor suppliers’ future is tied directly to the handset makers, it has become critical for sellers of CCDs and CMOS imagers to form relationships at all levels of the mobilephone supply chain in order to prevent losing market share or design contracts to competitors,” said Chris Crotty, senior analyst for consumer electronics at iSuppli.

“The high volume of sensor sales is likely to result in product commoditisation, which in turn will lead to increased industry consolidation,” Crotty added.

Although cameras have become standard fare on most mobile phones, studies suggest that actual usage remains low, with less than 10% of consumers actually using their handsets as their primary image capture device. Digital still cameras remain the device of choice for capturing images digitally according to iSuppli.

The company cited a number of reasons for this, including the poorer image quality typically associated with mobile cameraphones; and difficulties encountered when transferring images from a phone to a PC or printing device.

These challenges are exacerbated by two other factors: marketing generated by digital still camera manufacturers and user experiences, Crotty claimed.

In the first case, camera manufacturers have successfully convinced consumers they require more megapixels than necessary to shoot a decent image.

The second factor is the difficulties users face with cameraphones when trying to perform common photography tasks such as printing, cropping and zooming. Cameras generally need between 4- and 5-megapixels to support these tasks. However, users may have to get accustomed to low-resolution camera phone pictures because at the current rate of advancement, the average cameraphone will not reach the 4- to 5-megapixel level range until 2010, Crotty added.

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