| Sumario: | The five Japanese companies that dominate the digital-camera market in 2002—Sony, Fuji Photo Film, Canon, Olympus, and Nikon—are battling for leadership in the world's hottest consumer-electronics niche. The Big Five are enjoying the “sweet spot” that comes in the life of every consumer-electronics device when it is widely enough adopted, and supply is high enough, so that costs fall and margins rise even amid fierce price competition. The digital-camera market is a long way from saturation, and each successive generation of products improves enough on the last one that consumers willingly upgrade. What is more, according to Richard Kaye, a Tokyo-based analyst at Merrill Lynch, smaller brands will find it difficult to seriously challenge the user-base, branding, and cross-merchandising advantages of the major players.
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