The Ministry of Information Industry (MII) confirmed Sunday that it is working on a national standard for digital cameras to ensure the healthy development of the industry.

"We are busy doing research work and drafting the standard. We are still in the process," said Cao Jianhua, director of Science and Technology Department of the Ministry of Information Industry.

Denying a rumor that the standard is likely to be unveiled in October, Cao said there was no exact timetable for the release of the standard so far.

"It depends on how fast we do the research and when the work is done," he said.

The work is being jointly organized by the MII and the General Administration of Quality Supervision, Inspection and Quarantine. Many industry experts and digital camera makers at home and abroad are involved in the process, he said.

"Though it is a national standard, we are open to suggestions and advice from foreign digital camera makers," Cao said.

He also said that the standard would not necessarily be a compelling standard for all digital camera producers.

Analysts say that they believe the outcome of the standard is likely to better standardize the market as an array of digital camera producers are selling products with different standards in the Chinese market.

It will also help protect consumers' interests by eradicating shoddy products that fail to meet the requirements.

Despite the quick development of digital cameras in China, foreign makers - such as Sony, Canon, Olympus and Sanyo - have the upper hand in the market with their technology and compelling designs.

According to the IDC, Japanese digital camera markers command more than 80 percent of the market share in China with Sony, Canon and Olympus the top three.

For foreign players, the Chinese market has become more and more important.

According to a recent report from AC Nielsen, consumers in the Asian-Pacific region, especially those in the Chinese mainland are likely to purchase digital cameras, PCs and mobile phones during 2003 to 2004.

Analysts predict that the sales of digital cameras in the domestic market will exceed 2 million units by the end of the year.

"There are great opportunities for us to seek further expansion," said Yoroku Adachi, Canon China president.

Adachi says his company hopes to replace Sony as the No.1 digital camera maker in the Chinese market this year by tripling its shipment to the market.

As part of its endeavor to obtain a bigger market share in China, Canon plans to put forward more than 100 varieties of products for daily use and for commercial and industrial purposes this year.

Yoroku Adachi said that Canon had made it a goal to increase its sales in the Asia region by 20 percent and sales in China by 40 percent in 2004.

Market competition is likely to shift into higher gear as more digital camera players take part in the Chinese market.

HP announced later last month that it is going to bite into the lucrative market in China.

The company unveiled the first of its digital cameras in China. It plans to kick off its promotion activities soon in Beijing, Shanghai, Guangzhou, Chengdu and Hangzhou.

Analysts believe the involvement of HP is likely to reshape the DC market in China.

Exposed to fiercer competition, Chinese players should work hard to improve their technologies as well as better study the market to seek a foothold in the market, analysts warn.

For domestic players like Lenovo and Founder, their products usually center on the comparatively low three-megapixel resolution.

Analysts believe technology is the main reason that domestic players are lagging behind their foreign competitors.

"Also we lack experience with the products, market and channels for digital cameras - which is quite different from that of PCs," said Liu Jun, vice-president of Lenovo Group.

"But we believe that digital cameras with three or four megapixels resolution will be dominant in the market. We will not get into the high-end market with higher pixels," he said.

However, the emerging market of handsets with digital cameras is likely to erode the low-end market for domestic players.

Players such as Sony Ericsson, Samsung and Motorola are launching digital camera handsets with three-megapixel resolution.

(China Daily August 2, 2004)