Chinese digital-camera makers have launched an aggressive price war against their international counterparts.

Founder Technology, the biggest Chinese digital-camera maker in the first quarter, dropped the price of its DCSmart 33 from 2,199 yuan (US$266) to 1,666 yuan (US$201) on Friday, making the camera the cheapest 3-megapixel product in China.

The company will include free rechargeable batteries and a recharger worth 288 yuan(US$35).

The Legend Group, the second biggest Chinese player, also slashed the price of its V30 camera from 2,798 yuan (US$338) to 1,698 yuan (US$205) on Tuesday last week.

Previously, Chinese manufacturers mainly concentrated on the low-end market and products with 2 megapixels, while foreign brands focused on the high-end market.

Liu Jianling, Founder Technology's vice-president in charge of the consumer product business, said: "We have noticed significant rises in demand for products with 3 megapixels or above, so we have to work hard to satisfy that demand."

He predicted that products with between 2 and 3 megapixels will account for 90 percent of the total market, so the 3-megapixel segment has become critical for any player that wants to succeed in the market.

"Sales of the 3-megapixel products will sharply increase during the summer, so if domestic companies want to be successful, this is the time," said Liu.

He said he believed that Chinese firms would take at least 30 percent of China's digital-camera market and reduce the dominance of foreign makers in a year or two.

Founder Technology had a market share of about 10 percent in China in the first quarter, according to the International Data Corp, a research firm with headquarters in the United States.

Despite the ambitions of their Chinese competitors, international firms said they would not follow suit with price cuts but would instead continue to focus on their technological advantages.

Chen Jie, a spokeswoman for Fujifilm (China), said: "We don't want to get involved in a price war and will pay more attention to sales and profit figures, rather than how many units we sell."

(China Daily August 6, 2003)