HP Shutters Digital Camera Manufacturing for Print 2.0

HP's aggressive determination to compete in the digital camera market took an abrupt turn a couple of weeks ago after flagging market share in recent years compelled the company to announce it would begin looking for a partner to make and market digital cameras under the HP name and shift the company's focus to its so-called "Print 2.0" posture. Here's a rundown from BetaNews:

Three years ago, Hewlett-Packard announced it would revamp its digital camera lineup and invest $1 billion in research and development over 18 months to become a leading vendor. In a stunning about-face today (Nov. 9), HP announced that it is now seeking an outside OEM to design and distribute HP branded digital cameras.

The company will continue to sell its own models through the holiday season, and then cease in the first half of 2008, when a partnership is intended to be in place. The company that will take over production has not yet been determined.

HP's reinvestment effort ironically only seemed to shrink its brand presence in digital cameras, after having been ranked #3 in sales in the US in 2001 by Infotrends/CAP. Today, HP is ranked #8 in the US with a meager 4% market share.

So the company is shifting its focus now toward its so-called Print 2.0 strategy,announced in May 2007. Falling in line with HP's strength in printing, and the current lack of Web-based printing technology, the Print 2.0 platform is seen by the company as a nearly $300 billion opportunity.

HP is already in development with ViaMichelin to improve printing of online maps and directions, as well as with SixApart, to integrate print functions into the popular Moveable Type blogging platform.

My own thinking is, this is a good move - as cameras continue to merge with smartphones into all-in-one devices with as much as 5 megapixel resolution, differentiating a standalone camera in a crowded, commodified market is a loser's game unless the cost structure makes it a market that can't be ignored.