As the Smartphone Market Becomes Saturated, Camera Manufacturers Look to Automobiles

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You know how they say, "that all good things must come to an end" and the other clich©, "when one door closes another one opens"…these two lines of wisdom are never more true than in the small camera business.  When I say "small," I mean the cameras used on smartphones – now that is small.  Mobile phone manufacturers started putting cameras in phones about 2002 – small VGA cameras that took a picture and let's just leave it at that.  In ten short years, it is amazing the picture quality we can get from a modern smartphone and it seems that the manufacturers keep improving them every year.  When they first came out, we could use the picture for a contact, but not much else – there was no social media to speak of in those days.  Today, we share pictures across the internet, download them and print them – yes those tiny cameras have come a long way.

There are only a few manufacturers of those tiny lenses and cameras – Mcnex, LG Innotek Co Ltd, Sekonix Co Ltd, Panasonic, Sony, Continental AG, Robert Bosch GmbH, Autoliv, Haesung Optics Co Ltd and Kolen Co Ltd – and competition in the market is fierce.  At one time there was a huge demand for smartphone cameras as manufacturers, such as Samsung struggled to get the tens of millions of cameras they needed.  However, as the market starts to become saturated for high-end smartphones, demand for the cameras are not growing at the rate they once did.  Our source tells us that while demand for smartphone cameras, that generally use two per device, rose 39-percent last year, that by 2018 the growth rate will only be about 6-percent.

This where the other door has opened – as automobiles become more sophisticated with parking assist, backup assist, keeping you in your own lane, warning you if another car is approaching and now even applying the brakes if there is an obstacle, they need cameras for all of these applications…and let's not even talk about the cameras needed for the newest 'driverless' vehicles.  High-end vehicles can use as many as eight cameras and could easily reach twelve according to Mcnex Co Ltd, a phone camera supplier to Samsung and Korea's biggest car camera manufacturer.  This technology is trickling down to mid-end and even lower-end cars and the market for vehicle cameras could grow seven-fold from 2011 to nearly a $6.6 billion industry by 2018.

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Lee Hyo-cheol, a principal research engineer at Korean auto parts maker Hyundai Mobis Co Ltd, told Reuters "We expect the vehicle camera market to experience explosive growth."  The cameras for vehicles have to be more "robust" than cameras for smartphones.  They must be able to handle water and extreme temperature changes.  Lee said, "Vehicle cameras are completely different from mobile cameras in terms of specifications.  Phone camera makers have had to face a steep learning curve."

Cameras for a vehicle cost about $33 each compared with $4 for a smartphone, but prices should fall as volume grows.  About 83 million vehicle cameras are likely to be sold by 2020 – five times as in 2012.  By comparison, smartphones that generally use two cameras, will likely only grow 6-percent in 2018, according to researcher IDC.  So what once started out as gimmick on those old flip-phones is blossoming into a huge industry, from its infancy in smartphones to a full-blown business, thanks to the ever growing technology…who would have ever thunk it?