apple computer
A Picture-Perfect Opportunity for Apple
It had a hit marketing iTunes to Windows users. For its next act, Jobs & Co. should bring image-management software iPhoto to the PC majority
The Christmas season is looking very merry for Apple (AAPL ) and Steve Jobs. iPod sales continue their torrid pace, despite the music-player's hefty price tag. A crop of new iMacs should stoke sales. The version sporting a 20-inch floating flat-panel monitor is a stunner, and actually pretty reasonably priced, considering the cost of a detached 20-inch monitor -- $800 and up in many cases. Sales of G5s are also moving along smartly. That's all well and good. But I have one word for Apple. Actually three: Think digital cameras.
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These little beauties are one of the hottest consumer-electronics buys of the holiday season. According to retail sales data from U.S. outlets collected by consultancy NPD TechWorld, digital cameras brought in $1.92 billion during the first nine months of 2003. That's a 24.5% increase over the same period in 2002, when the devices amassed $1.54 billion in sales.
LESS THAN SATISFACTORY. The growth rate outpaced all other major PC-centric categories, including desktops, laptops, monitors, and printers. The Consumer Electronics Assn. found that in January, 2003, 28% of U.S. households had a digital camera. And the story is only beginning. Tech tracker InfoTrends expects consumer digital-camera sales to hit 53 million units worldwide in 2004 -- about double the 2003 tally. By 2008, yearly sales should eclipse 82 million units, creating a global market worth more than $11 billion.
That's a lot of birthday pics. And if played correctly it could be a lot of bucks for Apple. How? Not through hardware. Sony (SNE ), Canon (CAJ ), Kodak (EK ), Olympus, and Fuji already own 75% of digital-camera-sales pie. Those are brand names with long track records and reputations. It's completely unlike the fragmented market for digital music-players that Apple pounced on with the iPod.
So if you can't do hardware, maybe software would work. The digital-photography hobbyist software market for Windows machines remains hugely splintered. Most cameramakers bundle their own image-processing and cataloging software with their machines. I've used this type of software from three camera companies. Suffice it to say that I now understand why they make cameras instead of software.
Microsoft (MSFT ) bundles image-processing software with its consumer operating system. But using it is a chore, particularly because of its reliance on a semi-inscrutable folder system. A handful of third-party outfits also sell image-processing software aimed at Windows users. Most notably, Adobe (ADBE ), the biggest name in professional image processing, which also plays in the consumer market with Photoshop Album 2.0. This $40 package has won solid reviews but is relatively new on the scene.
ENCORE SET. This chaotic situation represents an opportunity for Apple. Steve Jobs has already proven he can translate his mastery of the intuitive user interface to the PC world with the successful launch of iTunes software for Windows [next page]