Magic in the software -- what the point and shoot camera industry needs
Point and shoot cameras are being displaced by smartphone cameras, mainly because smartphones are more convenient.
But that isn't the whole story. In the coming years point and shoots will find themselves under attack from a different angle; software will be easier to write for smartphone cameras, enabling use cases that point and shoots will have to scramble to keep up with.
For example, I take pictures on my iphone using the Dropbox app. Pictures I take are immediately copied to all of my computers. Even if point and shoots had internet connections, which they don't, they also don't have app platforms for companies like Dropbox to come in and add value.
There are a ton of apps that remain out of reach to point and shoots. Just look at the variety of camera apps for the iphone. Many of those apps would make sense in the point and shoot world.
So here's what I would do if I were a major camera manufacturer: create an app store for consumer camera apps.
Make sure the cameras have large-ish LCD touchscreens. Maybe even add wifi adapters that can work in a peer-to-peer mode. Give the apps access to the SD card, let them remix photos, show UI, and even use the wifi to share photos with other nearby cameras.
The magic is in the software.
Unfortunately I don't see this happening. This is a classic innovator's dilemma situation. It will start on the low end and work its way up market.