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Smartphone cameras change the way users share photos; older services try to compete

By Erik Silk | 14 Mar 2011

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Photo sharing mobile apps like Instagram allow the user to apply a filter before posting pictures to social networking sites like Facebook. (Photo: Erik Silk)

As mobile phones continue to become faster and more powerful, and as social networks become an increasingly common way to interact, a definite sea change is occurring in the way consumers share their photos online.

Whether it’s rendering the point-and-shoot camera obsolete or replacing Flickr with Facebook, this change in consumer behavior could have significant effects on the online photo sharing and consumer digital camera industries. Both industries are, at most, two decades old, yet they are at risk of being marginalized by newer companies.

Smartphones continue their rise in popularity the world over, and more consumers are using the devices as their primary means of taking pictures. Recently-developed smartphone apps give users the ability share photos on new and existing social networks.

Websites designed to share photographs have been around since the late 1990s, when Ofoto (later acquired by Eastman Kodak Co.) and Shutterfly, Inc. first launched their services. At that time, far fewer consumers owned digital cameras, so for many, sharing photos online entailed developing film, scanning the picture, then uploading it to a personal gallery.

By the mid-2000s, thanks to rapidly improving technology and lowered costs, far more consumers owned at least one digital camera and began shifting to social networking platforms such as Facebook and MySpace to share their photos.

Even today, Facebook remains the most popular photo sharing service worldwide, but the means by which pictures are taken and uploaded has changed dramatically, thanks to the rise of smartphones.

Although the most modern phones have cutting-edge camera technology, mobile devices have featured cameras for several years. By 2006, mobile giant Nokia Corp. overtook Kodak as the world’s leading supplier of digital cameras, all of which were simply parts of their phones.

However, until smartphones with Internet connectivity became available in the late 2000s, users who took photos on their phones were not likely to share them online. At the same time, cameras in phones improved rapidly and the improvement continues.

Greg Sterling, principal of Internet and mobile research firm Sterling Market Intelligence, said mobile cameras will likely overtake consumer-level standalone digital cameras, in terms of technological capability, within three years. Sterling also added that 50 percent of cell-phone users in the United States will likely have smartphones by 2012.

“Most people will carry their smartphone with a pretty good camera in it,” Sterling said. “The digital camera will be in the closet.”

Loren Appin, marketing director with online photo discovery engine Pixable, had a different take. “I think people will always have a digital camera,” he said. “You’ll always have people bring cameras and snap 50 shots, but the thing with a phone is that it’s not yet built to take 50 photos really quickly.”

Regardless, these technological trends point to a major shift in the way that people share their photos online.

“New mobile devices are becoming the primary cameras for consumers. They are game-changing because they are connected,” former Ofoto President and Chief Executive Officer James Joaquin said in an e-mail.

As more people take and share photos on their smartphones, a large market has opened up for phone apps solely designed to simply and quickly post individual photos taken on mobile devices.  Some of the most popular apps are Picplz and Instagram. Instargram had more than one million users less than 10 weeks after its launch.

While there are many ways to easily upload individual pictures to multiple networks such as Twitter, Facebook or Foursquare, Picplz and Instargram are particularly popular because they allow users to customize and edit the photos, by using a filter that changes a photo’ color scheme, for example.

“Personalization is huge—everyone wants to edit a photo,” Appin said.

Sterling added that because these photo-sharing apps all serve essentially the same purpose, novelty is key to set them apart. “Ultimately, there will be winners; you won’t have 15 photo-sharing apps,” he said. “It’s pretty easy for them to copy each other, and so Instagram grew in large part because of its novelty.”

So what do these trends mean for older photo-sharing companies that have their own photo-sharing platforms?

Kodak seemed cautious about the situation. “Yes, they are competitive services,” Products and Services public relations representative Robin Carr said in an e-mail. “We feel that it’s important to be connected to the different content distribution channels, so while a service could be a competitor, it’s also a potential partner.”

Shutterfly, on the other hand, did not appear to be concerned.

“We look at other photo-sharing apps as complementary to Shutterfly’s offering,” Shutterfly spokesperson Gretchen Sloan said in an e-mail.

In the company’s 2010 fourth quarter earnings call, CEO Jeffrey Housenbold noted that, over the company’s lifetime, it has seen many new photo-sharing products hit the market. They are popular at first but lack a long-term monetizing model, and fell by the wayside. “We’re very careful as we look at what generates buzz in TechCrunch versus what rings the cash register and drives shareholder value in the long-term,” he said.

Sterling, however, noted that companies like Shutterfly would be in the best shape if they focused on their more popular offline offerings, like personalized greeting cards and calendars, as the photo-sharing market changes dramatically. “The products that Facebook doesn’t do, is what they’re going to make money off of,” he said.

 

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