According to the latest research from Strategy Analytics, 257 million camera phones were shipped worldwide, representing 38 percent of total handset sales, in 2004. This was up sharply from 84 million, or 16 percent of total, in 2003.

Camera phones outsold digital still cameras by almost 4 to 1, reaching just 68 million units globally in 2004. Sales grew 40 percent annually, from 49 million units in 2003.

"Global camera phone sales grew by an impressive 200 percent year-over-year in 2004," said Neil Mawston, Associate Director of the Wireless Device Strategies (WDS) service at Strategy Analytics. "Nokia led the pack, with an 18 percent worldwide market share, followed closely by Motorola at 17 percent, and Samsung in third position at 13 percent."

Chris Ambrosio, Director of Strategy Analytics' Global Wireless Practice, added, "The digital still camera market is running out of steam. Vendors such as Kodak, Canon and Fuji will find growth harder to achieve in 2006. Camera phones will eventually capture 15 percent of the low-end digital still camera market by 2010, while attempts to sell households in developed markets a second or third device will be restricted by the ubiquity of multi-megapixel camera phones."

Other findings from Strategy Analytics' 2004 Global Camera Phone report include:

- VGA sensors will still be the sweet spot for camera phones in 2005, but vendors will use pixel counts as a differentiator in higher product tiers. These 'Pixel Wars' will drive multi-mega pixel handset demand to 3 in 10 sales worldwide in 2005.

- Removable memory will be standard issue on camera phones by the end of 2007 but the wireless connectivity landscape for camera phones (e.g. USB, WLAN / WiFi, Infra-red, Bluetooth, etc.) will be fragmented, requiring printer, and other ecosystem, players to support a wide range of solutions based on regional market dynamics.

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