Just like the traditional film based industry is quickly dying since people are using digital cameras and don't need film anymore I think the digital camera industry might be in for some hard times too.
I started speculating this when I got my latest cell phone. It's got 12.8 meg of memory and a CCD camera and it can take 640x480 pictures. It's only a matter of time, probably by next summer, before these cell phone cameras can take 1 mega pixel images. In other words it's only a matter of time before cell phone cameras are as good as the lower end consumer digital cameras.
As if to drive the point home, I saw this ad on the train the other day
This is the newest i−Mode phone. All iMode−251i series phones have a camera. This one, like mine, can take 640x480 pictures. It can also take the new Memorystick Duo cards so you can easily dump your pictures to you PC. But, what stuck out is the ad. On the right are 4 pictures FROM THE CAMERA. The ad is pointing this out, that you can print your pictures and they will come out this good.
The pictures do no look great but they look good enough. For people that like polaroid pictures they look about the same. Given a year or two and an increase in resolution, why would any average consumer by a camera?
Sure, there are people that like to take pictures and want a nice camera but the majority of people are happy with a point and shoot camera. They are happy buying disposible cameras. As almost everybody is always carrying a cell phone if your cell phone had a camera, why would most people ever need another?
Give it another 5 to 6 years and the cell phones will replace video cameras too. This series as well as the J−Phone cameras already support short movies. The FOMA series supports streaming video. Get the res up and no more need for a video camera for most people.