Samsung snaps at heels of camera giants Canon and Nikon

By Kiyoshi Takenaka and Marie-France Han - Analysis

TOKYO/SEOUL (Reuters) - Japanese camera makers such as Canon and Nikon have long ruled the $22-billion digital camera market, but South Korean upstart Samsung Techwin is making a serious bid to build its brand to take on the big guns.

The market for digital cameras -- particularly high-end models -- is booming as prices have fallen, and as it becomes easier to store large numbers of photos on a computer or upload them to sharing Websites like Flickr and edit images through programs such as Google's (GOOG.O: Quote, Profile, Research) Picasa.

Japan's camera makers, including Canon Inc (7751.T: Quote, Profile, Research), Sony Corp 6758.T and Olympus Corp <7733.T, control 70 percent of the global digital camera market, which research firm IDC expects to have grown 15 percent in 2007 and expand 11 percent this year.

"Japanese camera makers don't really care much about overseas suppliers. But one company they do care about is Samsung Techwin (012450.KS: Quote, Profile, Research)," Techno Systems Research analyst Akiko Sato said.

Samsung Techwin, a quarter-owned by Samsung Electronics (005930.KS: Quote, Profile, Research), more than doubled its digital camera market share to 7.8 percent in 2006, making itself the fifth-largest digital camera maker behind Canon, Sony, Eastman Kodak Co (EK.N: Quote, Profile, Research) and Olympus by sales, according to IDC.

Samsung Techwin aims to boost its digital camera sales by 46 percent to 17.5 million units this year and become the world's No.1 digital camera maker by 2010.

"Samsung Techwin's distribution network is set to increase from 70 retailers in 2007 to 150 networks in 2008. It will get a powerful boost from Samsung Electronics' retail network and brand power," Prudential Investment & Securities analyst Kim Uno said.

Japanese rivals have every reason to take heed, having seen Samsung Electronics zip past then-mighty Japanese memory chip makers in the 1990s and flat TV makers earlier this decade.