This Apple Disruption Is Already Well Under Way

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Point-and-shoot cameras are a dying breed.

As backside-illuminated, or BSI, image sensors increasingly make their ways into the mobile devices we're already carrying around anyway, there's really not much reason to lug around an extra device. They'll always have a seat at the table, but that seat keeps getting smaller and smaller.

Just looking at popular photo-sharing site Flickr, which Yahoo! (NAS: YHOO) picked up way back in 2005, you can see a pretty clear trend, since the site attempts to automatically detect what camera is being used. This isn't possible all the time, but Flickr estimates that it can do this about two-thirds of the time.


Apple's (NAS: AAPL) iPhone 4 happens to be the most popular camera overall, beating high-end DSLRs in the process.

anImage

Source: Flickr.

The No. 2 shooter is a 21-megapixel camera whose body alone (before including a lens) costs roughly $2,200. The high prices of DSLRs also probably contribute to why more affordable smartphones are more prevalent, but even if you just look at camera phones, the domination becomes even clearer.

anImage

Source: Flickr.

Source: Flickr.

The newest iPhone 4S has quickly ascended the charts ever since its release, but you'll notice that Apple cozily occupies the four top spots with the last four generations of iPhones. This is great news for the suppliers of those BSI sensors, but more so for the later generations.

Rank

Model

Sensor Quality

Company

1iPhone 45-megapixelOmniVision (NAS: OVTI)
2iPhone 4S8-megapixelSony (NYS: SNE)
3iPhone 3G2-megapixelAptina
4iPhone 3GS3-megapixelOmniVision
5HTC EVO 4G8-megapixelOmniVision

OmniVision looks like the clear winner, at least as far as Flickr is concerned. Keep in mind that most of those devices are relatively older. Micron (NYS: MU) used to own Aptina but spun it off three years ago while retaining a 35% minority stake in the company.

OmniVision was able to score the new iPad design win, but don't expect any shutterbugs to be wielding iPads often enough to secure a spot here. The real test for the company will be whether it can reclaim its iPhone seat from Sony in the sixth-generation model.

Oddly enough, Sony is banking on the new iPhone, even as it also has a lot to lose as the device cannibalizes Sony's own point-and-shoot offerings. Sony's already admitted that point-and-shoot sales are plummeting -- might as well ride the smartphone-camera tailwind. NPD Group also recently said that the portion of photos taken by smartphones jumped from 17% in 2010 to 27% in 2011, while point-and-shooters fell from 52% to 44% over the same time period.

Any way you slice it, smartphone-bound image sensor suppliers are the winners here. At least so long as they can fend off commoditization.

Looking for other ways to make component plays? If so, don't miss this report on 3 Hidden Winners of the iPhone, iPad, and Android Revolution -- it's free.

At the time this article was published Fool contributorEvan Niuowns shares of OmniVision Technologies and Apple, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Yahoo! and Apple.Motley Fool newsletter serviceshave recommended buying shares of Yahoo! and Apple and creating a bull call spread position in Apple. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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