Who are the buggy whip makers of 2001?

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Who are the buggy whip makers of 2001?

By Richard Morochove

First published March 20, 1998

Ninety years ago, when the horse-drawn carriage dominated the personal transportation landscape, few could have foreseen how dramatically the automobile would change the field in just a couple of decades.

Yet there are thriving businesses today that could be the buggy whip makers of the next millennium, thanks to recent improvements in computer and Internet technology.

One of the past year's most interesting developments is the dramatic growth in digital photography. Strolling the aisles of Fall Comdex, the enormous computer industry trade show held each November in Las Vegas, I saw over a hundred new digital camera models. There were fewer than a dozen the year before.

If you're an amateur photographer, there's a lot to like about digital photography. There are no rolls of film to buy and develop. All images are stored on reusable memory.

Most digital cameras have a tiny display on the camera back that lets you view the photos instantly. If you don't like the results, simply erase the image and take another.

Since the images are digitized, you can easily transfer them to a personal computer. You can print an 8 by 10 photo on a colour inkjet printer for much less than the cost of a conventional photo enlargement, a couple of bucks for ink and special paper. You can easily share photos by e-mailing them to friends and relatives or posting them on a Web site.

Yet digital cameras cost more than their conventional cousins. The image resolution, while improving, isn't as good as film. Digital cameras don't have the same wide selection of add-on lenses and other accessories. You need a PC to take full advantage of the technology.

If digital photography becomes mainstream, and I think it will, there are several industries that will be affected, ranging from camera makers to film suppliers and photo developers.

While most of the well-known film camera makers have dipped their toes into the digital arena, they'll face new competition from computer peripheral suppliers, such as Epson, who are already established in this market.

Photographic film is a huge business for several companies. Kodak, for one, perceived the emerging threat and invested early in digital photography. I evaluated one of its newest camera models, the DC210 with zoom lens and flash.

I'm impressed with the way you can easily view your photos and transfer them to PC using the Kodak DC210. However, the unit depletes batteries so quickly you'd think it must be made by Eveready or Duracell.

Kodak has lost money on its digital photography business and recently announced employee layoffs. I wonder how many digital cameras they'll need to sell to replace the profits earned by their photo film making and developing businesses?

Photo developers seem to be the big losers. I can see much of the photo printing business replaced by computer printing supplies. A company like Hewlett-Packard, already a kingpin in computer printers, stands to benefit through sales of photo quality printers and related ink and paper supplies.

Another candidate for the buggy whip dustbin is the long distance telephone business. The voice quality of Internet telephony has improved dramatically, although it's still not up to what we've come to expect on conventional voice lines.

The big advantage is cost. You can make an Internet call to anyone else on the Net for the cost of your Internet connection. Paying twenty cents an hour for an Internet call instead of twenty cents per minute for a long distance call via conventional telephone is a powerful incentive to change suppliers.

Among the first to switch will be businesses with branch locations that already communicate digitally with their computers. Residences without computers or Internet connections could sign up with telecommunications firms that route conventional phone calls over the Net and pass along a portion of the cost savings.

At risk are conventional long distance providers, including the one owned by Canada's favourite blue chip, Bell Canada Enterprises. Bell has its Sympatico Internet provider business and supplies services to many Internet service providers (ISPs). However, I can't see Sympatico wooing new users by telling them how much they could save on their long distance bills.

We're in the middle of a shakeout in the ISP business, with well publicized problems last year in Canadian public companies such as HookUp Communications and iStar. The sure winners make equipment needed for the infrastructure of the Net, such as Cisco Systems. CW

Richard Morochove, FCA, is a Toronto-based computer consultant.

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