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China is the world's biggest production center for digital still cameras, accounting for close to 75 percent of global output. In 2007, the country is projected to produce more than 80 million units of digital still cameras, registering a substantial year-on-year increase of 27 percent. The country manufactured close to 67 million units last year, based on statistics from the China Culture and Office Equipment Association. With worldwide production of digital still cameras exceeding 91 million units in 2006, according to NikkeiBP Market Access, China's total shipments represented a 73 percent share. Aside from homegrown manufacturers, China is home to leading industry players such as Canon, Olympus and Sony, which have established their production lines in the region, as well as key EMS providers of these major brands. It is estimated that more than 90 percent of China's total digital still camera production comes from these industry leaders and their partner contract manufacturers. While production of these bigname companies continues to increase, small and medium-scale manufacturers in the country are exiting the line because they cannot compete with the major players, which are expected to dominate China's industry in the future. From 40 makers, including domestic and foreign-invested companies, the supplier base in China is forecast to drop to 30 by the end of 2007. This number excludes brand name companies with factories in China. The high demand for camera mobile phones is one of the major reasons why the digital still camera industry in China has been restructuring in the low-end market, which is the focus of small and mid-scale manufacturers. However, industry leaders have also eaten into this market by slashing prices of their midrange models in the past two years. The resultant fierce price war has forced some makers to withdraw from the production sector and concentrate on product development and marketing efforts, outsourcing manufacturing processes to professional EMS providers. Kodak transferred ownership of its Shanghai factory to Flextronics in 2006. Almost all Kodak products come from this facility. BenQ sold its production facilities in Kunshan, Jiangsu province, to Ability Enterprise in mid-2007. To steer clear of the competition, China manufacturers are resorting to niche marketing by targeting the gifts and premiums market, and offering customization services to accommodate buyer-specified external designs and logos. Products made
China makers produce megapixel digital still cameras as well as models in 100KP and 300KP ratings. Many makers also offer above 3MP cameras with CMOS or CCD image sensors, and models with software interpolation to achieve resolutions of up to 10MP or 12MP.
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 All information contained in China Sourcing Reports is the result of exclusive, ground-level and definitive research conducted by Global Sources' analysts. Companies featured in these reports may or may not be clients of Global Sources.
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