Wireless - The NPD Group

Home » Bulletin

Picture Messaging Snaps Into Place

Better devices, interoperability, and easier-to-use and affordable services have enabled a recent surge in picture messaging among consumers.

Picture messaging is finally catching on with U.S. consumers after a couple of years of sluggish growth - and this trend is adding to carriers’ bottom lines.

In the first nine months of 2006, consumers increased their use of picture messaging from a level of four percent in January 2006 to 12 percent in September, according to NPD’s Mobile Consumer Track data. That’s a phenomenal increase of 237 percent and a sign of strength for this once struggling wireless data service.

Carriers Take Note

Many carriers have already noticed the market shift. For the month of September, Verizon Wireless reported its subscribers sent 100 million “Pix and Flix” (photo and video) messages over its network. Though this volume is much lower than the five billion text messages sent by Verizon Wireless subscribers, it still represents a 150 percent increase year-over-year, which is the same growth rate seen with text messaging.

Similarly, Cingular reports that picture messaging is increasingly popular among its subscribers. In Q3 2006 the average monthly spending on data services rose to $6.32 - a 46 percent increase from a year ago. This strong growth was fueled in part by picture messaging, according to the company. Likewise, T-Mobile reported strong growth in both text and picture messaging in its most recently reported quarter.

What’s Spurring the Growth?

Several factors have helped fuel the growth for picture messaging. Among them are the following:

Higher quality camera images of one megapixel or more
Greater interoperability among carriers, which allows for smoother picture sharing
Better service offerings and affordable pricing packages (e.g., Sprint offers a picture messaging service starting at five dollars per month)
Higher speed networks that can handle the capacity demands of sending photos and video
Consumers accustomed to text messaging are now willing to experiment with picture messaging

Higher Resolution Cameras

Corresponding to the growth in picture messaging is the concurrent increase in sales of handsets with higher-resolution cameras. Quite simply, the pictures taken with these newer devices are better, so consumers see more value in sharing them with others.

There’s also a strong correlation between greater photo resolution and increased use of picture messaging. In September 2006, 33 percent of consumers with high-resolution cameras sent picture messages versus the market average of 23 percent for all camera resolutions.

Looking Ahead

Expected changes in the picture-messaging landscape bode well for the industry. First, consumers can look forward to phones with up to 3.2 megapixel image quality, which puts them on par with entry-level digital cameras. Samsung offers such a device, the SCH-a990, through Verizon Wireless. Other models with this image resolution are expected soon from Nokia and Sony Ericsson.

Storage capacity on some models is also on the rise. Many high-end handsets now include slots for data cards, which allow up to two gigabytes of storage. That’s plenty of space for consumers who are interested in taking occasional snapshots.

Also, the available camera lenses will soon improve to enhance photo quality. For instance, LG has just announced a deal with noted German lens manufacturer Schneider-Kreuznach to incorporate higher-quality lenses into some of its phones. This move follows a similar one by Nokia to install Carl Zeiss lenses into some of its high-end camera phones.

But not all of the innovation is on the hardware side. Software and services will improve, too. FotoNation recently announced the first face-detection and tracking technology for camera phones, and new photo-sharing capabilities are coming to market from companies like Exclaim, a Web and wireless application provider.

All of this innovation should help drive greater adoption of photo messaging, which would be a welcome trend for carriers, handset manufacturers and imaging companies hoping to cash in on the millions of camera phones in users’ hands.

- Neil Strother, Research Director, Mobile Devices, Content and Services