Samsung bets on cameras to challenge rivals

SEOUL, S.KOREA: Samsung Electronics Co, the world's No.3 maker of compact digital cameras, unveiled a hybrid camera on Tuesday and predicted the new segment will grow 10-fold in five years to surpass the high-end single-lens reflex (SLR) market.

Traditional camera makers such as Canon Inc and Nikon are facing a threat to their dominance of the SLR market from Sony's NEX and other so-called mirrorless cameras by Olympus Corp and Panasonic Corp.

They have ditched the mirror from the traditional SLR format, allowing them to make the cameras smaller, and bet the middle segment will appeal to both compact users trading up and photography enthusiasts tired of lugging around heavy equipment.

Samsung joined the foray on Tuesday with a hybrid camera model NX100 that combines a light-weight body with the high-quality images of an SLR camera.

"The mirrorless camera will be the new locomotive of the digital camera market growth going forward and it will take over the SLR market in 2012 or 2013," Park Sang-jin, head of Samsung's Digital Imaging Business, told reporters.

"This new segment is already attracting consumers from compact users and will grab further market share by adding more consumers from the SLR category."

Samsung forecast the market would grow to 15.3 million units by 2015 from 1.5 million units estimated this year.

The South Korean firm has an 11.8 per cent share of the compact digital camera market, but has little part of the more profitable SLR segment, dominated by Canon and Nikon.

Threats to SLR makers

Sony is ahead of Samsung and scored an instant hit in Japan when it introduced its NEX mirrorless camera in June, grabbing market share held by Nikon and Canon.

Sony is the world's top compact digital camera producer with a 17.4 percent market share but languishes a distant third in the SLR market.

"Traditional SLR makers remain hesitant of offering mirrorless cameras for fear of the new market cannibalising the profitable SLR category. But I bet they'll eventually jump into the market and drive the segment's expansion," Park said.

Nikon is also readying a camera model it hopes will create a new market, its president told Reuters this month.

"Mirrorless cameras are fully digital and, therefore, can be commoditised, which means they are negative for Nikon, which only makes a profit on its SLR cameras," said Ryohei Takahashi, an analyst at Bank of America Merrill Lynch in Tokyo.

"They are not so negative for Canon, which also makes a profit on its compact cameras."

Camera is one of the few areas where Samsung, the world's top producer of memory chips, LCD flat screen and TV, and No.2 handset maker, lags its global peers.

It brought the camera business affiliate in-house this year to boost synergies, as it seeks to hook up the unit with its handsets, printers, TVs and computer businesses with a view to meet growing demand for connectivity.

"We are latecomers in the camera business but confident of becoming a top-tier producer by 2012 by taking full advantage of Samsung's extensive marketing network, brand power and cooperation with other businesses," Park said.

Samsung will launch the NX100 in 12 markets, including Hong Kong and Korea, and price it around $600 and $650, cheaper than its predecessor NX10, which sells for $700 and $750.