Digital cameras: Charles Arthur - The revolution shaking up the photo industry

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A few recent events for me have shown how the future of picture-taking is going to work out. Believe me, if you're attached to film, it's going to take a lot of adjustment.

The first was the announcement in my local paper that the town's photography shop - which for years had grown on a staple of wedding photos, albums and framings - was closing down, not because it had gone bust, but because the owner could see the trend in sales, and it was all downwards. Meanwhile Agfa Photo, the 140-year-old German film and photography company, faces liquidation by the end of the year, having lived in the shadow of bankruptcy since May.

By contrast, we got a glimpse of the future of film on 7 July, when the London bombings suddenly put hundreds of people in horrific but newsworthy situations. And so they took photos - hundreds, perhaps thousands of them - and videos. How? Not with stand-alone cameras slung over their shoulders and held to their eyes, but with their mobile phones, balanced at arm's length. Even TV stations broadcast video footage taken on those phones.

If you ran a company making camera film, you'd look at that and cry. But the companies that make camera film, such as Fuji and Kodak are far too busy re-engineering themselves to this digital world to think about tears. In the US, sales of camera film are falling by 25 per cent annually, much faster than had been expected.

That means that film cameras will be all but dead within a couple of years. The high street chain Dixons, which started out as a photographic studio in Southend in 1937, said in August it will stop selling film cameras; digital outsells them by a margin of 15 to 1.

And digital cameras too are evolving as the competition from mobile phones heats up; the world's biggest supplier of cameras that take digital pictures is - wait for it - Nokia, which shipped 66.6 million phones in the third quarter of the year, almost all with a camera included.

Phones are the new cameras? Can that be right? "Total cameraphone shipments by far outweigh digital camera shipments," notes Paul Withington, research manager for the European printer and peripherals group at the research company IDC. Although, he adds, "it depends of course how you categorise a digital camera".

He prefers to define them as stand-alone objects, in which case Nokia doesn't even register. But it's clear that for plenty of people, the camera they rely on also makes phone calls - a statement you'd never have expected to read five years ago.

Yet digital camera makers aren't standing still. They're seeing more and more people start using their products. But digital cameras still have many failings: it's rare to find one that lets you adjust the speed of a shot; it's expensive to get one that lets you swap lenses (say, from telephoto to wide-angle to "macro" for close-up work); there's still a time lag between pressing the shutter button and the picture being taken.

The latter point, the "shutter delay", is being addressed, and improving all the time. But the other two points are where the manufacturers have some way to go - and I think they will be addressed in the coming year.

The old expectation that more megapixels would solve your problems is gradually fading; once you get beyond four megapixels, your picture is not going to improve, unless you're making posters. So digital cameras with replaceable lenses, and particularly programmable shutters (which let you adjustthe depth of focus and exposure time) will become much cheaper, and so more common.

The phone companies aren't going to stand still either; though their purpose is not to give us the best possible cameras. It is to encourage us to upload our phone photos directly to online sharing sites, because that is a data transfer (which earns the phone network operator money). People also like the idea of sharing photos, and browsing them on phones (which more of the photo sharing sites are enabling).

It's a world that would have seemed unimaginable only a few years ago. But it's coming, and its imminence was shown by the events of that July day, and those decisions at Agfa, and Dixons, and the small shop in my town, whose owner thought everything was going so smoothly a few years ago. It's a revolution, without a doubt.