An article by John Davidson from Australian Financial Review last year laments the somewhat surprising decline in sales of compact digital cameras, with both volume and value in 2006 down from 2005 figures. And GfK researcher Derek Nash believes it is a maturing market with 7 million cameras across Australia and many people on to their second or third model.

It seems that despite these tiny bundles of technology being armed with ever greater technical capability, they are looking like going the way of desk top computers - simple commodities.

The possible nail in the coffin could well be the recent introduction of Samsung’s 5 megapxel mobile phone. Putting what was once seen as a key differentiator into a phone has well and truly killed the game for any of the camera makers pursuing a ‘more mega pixel equals more market share’ strategy.

So how do the giants of camera technology, including Canon, Sony and Nikon, prolong the life of such an important product category; how do they prevent their offerings becoming completely commoditised? Is it possible the the digital camera has possible come to the end of its life cycle?

If so, then the companies manufacturing these products need to have a good hard look at some other options. One is to purse the iPod strategy of enabling the next generation of products to do a lot more important, but unsatisfied, jobs than they currently do.

The other option is to look at the entire job that people are trying to get done. This avenue of exploration may well provide an opportunity unrelated to the job of capturing the moment and open up a whole new category of sharing, accessing and using photo’s. The trick will be to understand if these jobs are being sufficiently satisfied or not.

Either way, what does now seem clear is that the existing business model of packing more and more into a small sleek silver box presents a very bleak picture.

Michael R Johnson