Picture of imaging gets brighter
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Industry needs rational import duty structure to reduce dominance of the grey market
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Digital devices have increased the number of images taken because of low costs.
THE IMAGING sector encompassing photography and photo printing has witnessed robust growth in the current year aided by digital technologies. Some of the positive factors for this growth have been increasing personal computer penetration, availability of a wider range of budget digital cameras and greater printing possibilities at home and at photo finishing retail outlets.
Digital technologies have increased the pressure on traditionally successful camera and film manufacturing companies to come up with quality improvements and innovate to retain market share and profitability.
In contrast to the relatively static prices that prevailed in the analogue era, digital technology has resulted in falling equipment costs. Digital pictures are stored as pixels by camera sensors and the price per megapixel (million pixels) in a sensor has fallen from $150 in January 2003, to $90 in January 2004 and to about $85 in December that year, says Photo Marketing Association International (PMAI).
Vigorous camera market
India's digital still camera market had a growth of 114 per cent in unit terms during 2004, according to research firm IDC India; the sector is forecast to achieve revenues of Rs. 366 crore in the current year and the entry level for cameras has moved up from two megapixels to three megapixels. Camera phones also compete with other imaging devices but have not made notable additions to volumes of prints made from digital images.
A range of vendors make up the digital camera distribution system. Nearly a third of the national sales in 2004 came exclusively from the IT channel while bigger players like Canon and Kodak are present in all areas that include photography, IT and consumer electronics distribution, the IDC survey says. Nikon, among the biggest companies in the business, does not have an official corporate presence in India but operates through authorised distribution channels for film and digital products.
Despite its reputation as a sector producing precision engineered, high value gadgets and notching up impressive unit volumes at the amateur level, the industry is unable to scale up and offer products for advanced users and professionals at international prices because high import duties ensure the dominance of the grey market in this segment.
International warranties on digital still cameras are not accepted in India for major manufacturers like Nikon and Canon. This is quite unlike the case of film cameras and all lenses for which such warranties are valid.
Canon India offers a two-year "carry-in'' warranty for digital products sold through specific channels in the country while Nikon distributor Inter Foto India, Mumbai, said a one-year warranty is available for purchases with the necessary paperwork.
This situation effectively denies support to a large number of buyers of advanced cameras who purchase new equipment in the grey market to avoid the nearly 30 per cent cumulative duties on a basic customs duty of 15 per cent, or bring it from abroad as baggage articles. This issue becomes critical when digital cameras that are based on newly emerging technologies develop serious faults.
A recent instance of failure of a particular CCD (charge coupled device) sensor fitted into cameras of five brands highlighted the importance of warranties. While free repairs were immediately available to buyers in more mature markets, owners of new cameras with the defective sensor in India mostly remained in the dark until they were alerted by reports circulating on the Internet.
In response to emailed queries, Canon India's customer service department said, "We have offered our customers free repairs on failure of CCD. This facility to customers in India is similar to what is offered in Southeast Asian countries.''
Postings made by owners of a digital single lens reflex camera of another manufacturer on a popular Internet discussion forum said no free support was available for the failed sensor, though the expensive equipment had been purchased only three months earlier.
Warranty, service issues
Warranty and service issues will therefore come into sharper focus in coming months as the volume of digital photographic devices with complex electronics compared to analogue equivalents, increases.
Kodak, which registered the highest unit sales of digital cameras in 2004, operates customer support centres through a service provision arrangement with Rashi Peripherals.
Canon India Assistant Director, Market Engineering Mr. Rajesh Sahni, says the company has opened a central repair and service facility in Gurgaon manned by Singapore-trained technicians. The company, which launched 43 new products recently, will operationalise customer care centres in 32 cities by January, from the current four. Emails sent to Nikon's global website on the company's plans to expand service facilities in India did not receive a response. Inter Foto said Nikon offers authorised service access in the four metros and Bangalore.
Digital devices have greatly increased the number of images taken because of low operating costs and high personal computer penetration; this has come as good news for the photo finishing industry which is targeting more print volumes. Yet, sustained growth rates will depend on a more rational import duty structure to reduce the dominance of the grey market and scaling up of service facilities from small local repairers to well-equipped centres.
G. ANANTHAKRISHNAN
in Chennai
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