Price cuts contribute to underdeveloped photo sales - The DSN Productivity Report

Discount Store News, August 5, 1996

In February, a consortium of leading photo suppliers unveiled the Advanced Photo System, the first significant new product in the industry since the introduction of point-and-shoot cameras more than a decade ago. The cameras and film in the system carry a surcharge of about 20% over standard 35mm, as does photofinishing, but the industry expects consumers to switch to the new technology because pictures come out better even in poor lighting conditions, and a raft of new features like drop-in loading and thumbnail proof sheets with each processing order make photography easier and the results more predictable.

The photo industry, particularly Kodak, is spending huge sums of money to introduce APS. However, the major marketing initiative, apart from an Olympics program from Kodak, is scheduled for the fourth quarter. Also, product shortages at the upper end have given APS just a so-so launch so far in 1996. Fully digital cameras continued to plunge in price, with a new Kodak model now priced in the $300 range.

Inexpensive 35mm cameras and widespread one-hour photo service have eroded Polaroid's instant photo business. The company responded with a major marketing campaign aimed at suggesting new uses for instant photography.

Convergence between photography and computing continued in 1995, and with APS on the market, Fuji and others are providing readers and scanners that will allow consumers to view, manipulate and send their photos through their personal computers.

Sales of traditional (non-APS) cameras were impacted by severe price deflation last year, since highly attractive and useful cameras at $50 or less offered features like red-eye reduction usually found only in cameras priced in the $80 to $100 range.

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