Is This the End of the Compact Camera?

Over the last 10 months there has been a significant change creeping into the camera market. For the last ten years from about 2001 or 2002 up until early 2011 there were four clearly separated camera market segments for regular folk. The terminology might change depending on who is writing the story, but basically the four broad non-super-professional camera market segments are:

  • Point’n’shoot: These camera have very basic functionality, are typically fixed-focus (i.e., they don’t actually focus at all) and have a fixed iris (f-stop), have a tiny sensor (around 2mm x 3mm), don’t allow RAW saves, rarely have actual glass lenses, have very average in-camera post-processing, and incorporate relatively slow computer processors.

    This category of camera sits in the price range of around $60 to $130.

  • Compacts: The cameras in this group try to bridge the gap between point’n’shoot and the half-frame DSLRs. Compacts usually provide some level of focussing (such as stepped-focus, zone focussing, or, in the higher priced models, full variable focus). They also generally provide a variable iris although the brightest f-stop will generally fall just short of f2.8. While the sensors, at about 5mm x 7mm, are still small compared to half-frame DSLRs they are three to five times the size of the sensors in the point-n-shoot cameras.

    The lenses in compacts will generally be glass and higher-end compacts often have very good lenses. Many higher-end compacts also allow you to save RAWs (negatives) and they generally provide good in-camera post-processing.

    Compacts range from $150 up to around $500.

  • Half-frame DSLR: This group covers all of the non-full frame DSLR cameras including the four-thirds and all the APS variations. This is the camera used by the serious hobbyist and semi-professional photographer. These cameras use crisp, low-noise, large sensors around 18mm x 24mm—a huge ten to twelve times larger than the sensors typically used in compacts and a whopping 70 times larger than those used in point’n’shoots. Sensors of this size provide results that are impossible using point’n’shoot or compacts (although some higher-end compacts can come close).

    These cameras allow for different lenses to be used depending on the requirements of the situation. This lets lens manufacturers design and build specialist lenses that allow the user to take pictures that could never be considered using a single-purpose fixed lens. For example: a hobbyist bird-watcher could get a super-telephoto 1,500mm (about 30x) f4 lens to take pictures of birds (if they had the $10,000 or so such a lens would cost); or a person who wants to take pencil-sharp close-ups of flowers can get an 85mm f2.8 super-macro capable of focussing perfectly on something only 20mm from the front of the lens; or someone wanting to photograph in very low light could get a 50mm f1.2 lens capable of crisp full colour pictures from the light of single candle.

    Cameras in this class range from $600 to $2,000 for the body, and then the lenses can cost anything from about $300 to $10,000.

  • Full-frame DSLR: Now we are entering into the domain of the serious semi-professional and the professional photographers. With a sensor about double the size of that in the half-frame DSLR, and about 140 times that of a point’n’shoot), the quality of the images captured by these cameras is about as good as it gets with current digital sensor technology. Even cameras with image sensors larger than the sensors in these cameras only get a minor, almost undetectable, improvement in image quality.

Up until recently phone cameras were very much in the point’n’shoot group. They had tiny noise-ridden sensors and the in-phone post processing was generally low quality. Most had lenses that were far from optically ‘perfect’ and the effective f-stop was rarely less than f4 so pictures taken in low light either ended up very dark or full of digital noise (very speckled or dirty) or both.

But over the last 10 to 12 months mobile phone manufacturers have realised that smartphone buyers really want a better camera and that better cameras in their phones equates directly to more sales. Market research done in the UK in Q3 of 2010 indicated that the The top 3 buying decisions for a smartphone buyer were:

  1. The style, look, and feel of the phone (i.e., how ‘pretty’ it is).
  2. How good is the camera.
  3. The cost.

As a result there has been a lot of work done improving the cameras in smartphones by almost all manufacturers. While there is not a lot they can do about the sensor size (due to some basic laws of physics relating to lens distance from the sensor) they have massively improved almost every other aspect of their in-phone cameras.

Almost all up-market smartphones released in the last 10 months now provide the following:

  • High quality optically ‘perfect’ glass lenses.
  • Variable apertures (as opposed to a fixed aperture).
  • Variable focussing, or failing that, zone focussing with five or more focus zones.
  • Wider f-stops with the Apple iPhone 4s having f2.4 and the new Nokia Lumia 800 Windows Phone having an incredible f2.2.
  • A 5 megapixel or 8 megapixel sensor (with 8 megapixels fast becoming the norm).
  • Clever leading-edge sensor technology being employed to keep digital noise under control (as much as is possible with a sensor so small).
  • Significantly improved post-processing including noise removal and chromatic aberration (CA) correction—which is possible now due to the much more powerful computer processors in the phones with some phones having dual-core 1GHz+ CPUs.
  • Improved flashes due to improvements in LED technology (although LED flashes are still far from being truly that useful).

This now brings me to the meat of this posting. The impact the latest crop of smartphones are going to have on the point’n’shoot and compact camera markets.

Up until late-2010/early-2011 the cameras embedded in smartphones were about as useful as a point’n’shoot camera, and maybe some of them were as good as the very low-end compact cameras. So graphically a comparison would have looked a bit like the following with smartphone sales (shown in hot pink) overlapping the point’n’shoot and some of the lower-end compact camera market.


But the following graphic indicates what has happened over the last few months with the advent of the iPhone 4S, the Galaxy S II, the Google Nexus, and the Nokia Lumia 800 (and probably a few others I have failed to mention).


Smartphones have, in just the last few months, crossed-over into a huge part of the compact camera market. These graphs are only indicative and are not based on forensics but this is what is happening. Some will argue if I have indicated the degree incorrectly but that is beside the point. The point is that the compact camera market is under threat.

Okay. Admittedly you do have to buy a smartphone up in the $700+ range (outright price) to get one of these new improved cameras, but this does not seem to be that much of a problem for the modern smartphone buyer (in Australia, anyway). On a two year plan, depending on the bundles and other extras, you might be looking at $69.95 a month.

The other trick that smartphones have is that they are, or can easily be, connected to the Internet; either via their inbuilt Wi-Fi radio or via 3G. So once you have taken your much improved picture you can, without any break in your flow, send it up to your favourite Web-based location whether that be Flickr, Facebook, DropBox, SkyDrive, or whatever.

So, you might be asking, what do I think the impact of this is going to be on the compact camera market? Well initially I think the compact camera manufactures will fight back with lower prices, piling in more features, upgrading zooms and sensors, getting their software to do more stuff—but in the end I expect ‘The Law of the Internet’ to beat them. I expect sales of compact cameras to decline and some of the manufacturers to pull out.

The Law of the Internet states that “convenience trumps quality” so when it comes to a decision by buyers over the convenience of the smartphone camera and its almost seamless connectivity with the Internet versus the slight quality improvement of using a compact camera then convenience wins. For that small percentage of people where the law does not apply and they want quality before convenience then they will most likely bypass compact cameras and go directly to a DSLR. After all, if you are going to have to carry another camera to take your pictures with then it might as well be a darn good camera. Why carry around a compact when your smartphone is almost good enough to do anything the compact could do?

So, assuming I am right, you will probably be able to pick up a really good compact camera at a good price very soon now …