VENTAJAS Y DESVENTAJAS DEL CONTRATISTA CONTRATO COSTO + UTILIDAD

HVA-TDM : TM 2011 2013 2015 0% 0% 0%

Total Market ($ Million)

Total Domestic Manufacturing (High Value Add, $ Million) Total Domestic Manufacturing (Low & Medium Value Add, $ Million)

Base Year: 2011 Source: IESA-Frost & Sullivan CAGR (2011 - 2015) TM: 18.9% TDM (overall): NA TDM (Low/Med value add) : NA TDM (High value add): NA 0 1.6 1.4 0 1.2 0 0 0.9 0 0.66

Industry SWOT

The digital camera value chain comprises of various component and subsystem suppliers, assemblers and the downstream retailers and consumers. The lens technology and manufacturing process is the most crucial element in the manufacture of a digital camera. Japan holds the highest number of patents in this regard and hence presents a formidable barrier to exploring that segment in terms of design or manufacturing. The coating technology on the lens involves a high level precision and currently India does not have the skill set availability to implement this process. Also the quality and availability of raw material varies from country to country and currently India does not possess the right quality-availability mix required to manufacture the components of a camera. The digital camera value chain is depicted in the figure below.

Component and Sub-system Suppliers Image Sensor Image Processor Motor Driver Digital Camera - OEM Digital Camera - EMS Consumers Peripherals Memory Capacitor Battery pack Lens Audio interface LCD controller Assemblers Downstream

There are no manufacturers of digital cameras in the country and India is flooded with competition from foreign manufacturers. Besides the top 3 players who control almost 95 per cent of the market in India, there are other foreign players with varying capabilities. All of them import the digital camera as a finished product resulting in no local value addition. From an Indian ecosystem standpoint, with regard to components, all the core chips, LCD display, battery pack, sensors, lens etc., are imported while only a limited amount of local capability exists for the peripherals and LCD drivers.

The table below captures the capability in India across the digital camera value chain.

Category Product Local Supply Local Manufacturing

Local IP

Capability Company Names

Level of Local Value Add Remarks Components and Sub systems

Image sensor Imports No No Samsung, Canon, _{Toshiba, AOF} NA Lack of high quality raw _materials

Memory Imports No No AOF, Canon, Foba, _etc NA

Battery Pack Imports No No Electra, AOF, Foba NA

Lens Imports No No AOF, Canon,

Tamron, Olympus NA

Japan holds the highest number of patents; no

design capability Image Processor Imports No No Canon, Sony, _Toshiba NA

LCD Controller, Capacitor, peripherals Imports No No AOF, Unorganized players NA Local manufacturing capability exists, but no

OEM prefers to do any kind of assembly activity

locally

Digital Camera

OEM Yes No No Canon, Nikon, Sony NA

Analysing the digital camera value chain in India, it is observed that the presence of sustained and growing demand for digital camera is a key strength for the industry. The absence of supporting industries is a critical challenge for the country; most electronic components are imported too. This inhibits the business case for local manufacturing of digital cameras. The Indian electronics ecosystem can potentially execute low level assembly for digital cameras; however, the duty structure for individual components is high and prohibits OEMs to consider investment in local manufacturing. The SWOT chart below captures the analysis for the digital camera market.

STRENGTHS

Huge consumption demand

Shift in trend from Point and shoot camera to DSLRs especially from the younger population

Component design – components like resistors, capacitors, battery circuits can be designed in India Skillset availability for component and product design Well developed EMS industry to carry out assembly activity

OPPORTUNITIES

Paradigm shift towards Digital world. Increasing adoption of digital cameras.

Manufacturing and labour costs in China driving manufacturers to invest in facilities in India

India as a export hub for servicing ME, North Africa and Europe countries

New policies such as MSIPS incentivizing local manufacturing investments

WEAKNESS

Reliance on imports for the entire product – no product assembly or component imports

FTA imports through Thailand and Japan posing a huge hindrance for local manufacturing

Limited or negligent product design activities locally; No IP generation

Limited availability of necessary skill sets

THREATS

Smartphones hurting Digital camera sales

Well established manufacturing ecosystem in countries like China, Japan, Korea etc.

Well explored technology - Japan holds the highest patents for lens technology, no new development possible

Infrastructure inadequacy – sufficient power, water and

other utilities – uninterrupted availability

SWOT

Component SWOT

The component ecosystem for digital camera is extremely diverse in line with the wide range of prices of digital cameras. While components such as lens, image sensors, battery pack, processors, memory, etc., are common for all types of cameras, the cost and capacity of these components vary depending on the features and applications supported by the camera. The top 4 components that contribute to majority of the Digital camera bill of materials (BoM) irrespective of the type or price are:

1. Lens

2. Image processor 3. Image sensor 4. Battery

Currently most of the digital cameras are imported as finished goods. The top players possess established manufacturing infrastructure in countries like China, Japan, and Korea. OEMs such as Canon possess manufacturing competencies across all stages of the value chain. Other players outsource parts of their manufacturing to contract manufacturers in China and other Asian countries.

Strategic Conclusions