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We're taking more pictures than ever ... so why are cameras dying off?

Are smartphones set to replace digital cameras the way digital replaced film?Devin Coldewey / NBC News

You would think that in a world where hundreds of thousands of photos are shared every minute, camera makers would be absolutely in heaven. Instead, they're struggling to maintain both their income and their relevance.

The same week that Nokia introduced the Lumia 1020 — a smartphone with a built-in 41-megapixel camera — the president of Nikon, Makoto Kimura, said in an interview with Bloomberg that the company might have to "change the concept of cameras" in order to survive. Just a few years ago, camera-phones were junk and digital cameras were a hot ticket. How did we get here?

Photography was originally an expensive game to play, with the cost of film and development making your camera into a money sink. And unless you were among the few shutterbug elites with really nice gear, all you and your little plastic automatic (or even disposable) camera were likely producing was a shoebox full of poorly exposed, red-eye rampant 3x5s.

Then came digital — we take it for granted now, but it was a real breath of fresh air when it arrived. The early 2000s brought the first really usable digital cameras to consumers: chunky little 2-megapixel things whose quality was nothing to write home about, but which brought instant picture taking to the masses. No film, no processing ... no shoeboxes.

Over the next few years, the technology improved, and "real" photography arrived in digital form, with DSLRs like Canon's Digital Rebel.

sales graph
DSLR sales are growing slowly, but not fast enough to replace point-and-shoots.Devin Coldewey / NBC News

For almost a decade, digital camera sales mounted as people ditched their old pocket 35mm cameras for digital cameras of all shapes and sizes, with shipments peaking at 120 million in 2008. Then growth stalled.

It's tempting to blame the iPhone, which is rightfully credited with shaking the foundations of several other industries at the time. Other phones had cameras, but nothing that could rival a point-and-shoot. And the roomy LCD screen that covered the iPhone's surface made one heck of a futuristic interface for snapping shots.

But early on, the iPhone's camera wasn't great, and there weren't yet apps for picture sharing. Smartphones would eventually be the main reason cameras were hurting, but they got their toehold because of something altogether different: the global recession.

CIPA, an organization that tracks camera sales, blames the economy in this analysis and sales forecast (PDF). Tight wallets meant $500 for a camera was out of the question — but $100 for a smartphone on contract, perhaps in lieu of a new laptop, was a bargain. Besides, nearly everyone already owned a digital camera (well over a billion had been sold at this point), and the constantly increasing megapixels were not enough of a draw to increase demand.

These consumer trends — combined with the 2011 earthquake and tsunami that ravaged Japan, affecting camera makers' production lines — caused the photo industry to withdraw into a sort of stasis, from which, sales-wise at least, it has never emerged.

iphone camera
iPhones and other cameras now promote cameras as a main feature rather than a bonus.Apple

Meanwhile, smartphone makers made up the difference — in spades.

The last generation of smartphones, from the iPhone 5 to the HTC One to the Nokia 1020, embodies the shift in focus from productivity to media. While Canon and Nikon continually make tiny tweaks to a formula that essentially dates back to the 1960s, Samsung and Apple have been pushing the limits with advanced sensors, high-resolution touchscreens bigger than any found on a DSLR, and high-speed data networks, and an app ecosystem that make it not just easier to take pictures than with an ordinary camera, but far more simple to share them, too.

A smartphone is a passable camera (increasingly so) but — more importantly — it provides constant connection and convenience. If you take a beautiful picture on your DSLR, it just sits there on the memory card like it did in 2001, until you go through the process of connecting, editing, and uploading it — like you did in 2001. With the latest iPhones and Android smartphones, any photo you take probably ends up on the cloud, even before you fire it off to Facebook or Twitter or SnapChat.

Yet it's only in the last year or so, for instance, that traditional cameras have been granted built-in Wi-Fi, but camera makers can't charge much for it, and it often only serves to remind people how much superior their smartphones are. And let's not even start with the software that you need to make it all work.

Nokia 1020
The Nokia 1020 uses an advanced sensor and image processing to produce unusually high-quality images for a smartphone.Nokia

Smartphones were neck and neck with digital cameras in 2008, but according to CIPA sales data, they will likely outsell cameras 10 to 1 this year. The camera is a marquee feature on new devices, and some even blur the line: The Galaxy Zoom, for instance, incorporates a full-on zoom lens, and the Nokia 1020's 41-megapixel sensor is more advanced than any point-and-shoots.

What, then, can camera companies do to save their skin? They have a few years: While point and shoot sales are collapsing, taking billions off the bottom line, DSLRs and mirrorless systems are selling well. But if the Canons, Nikons, and Pentaxes of the world are not just to survive but to thrive, they need to change big time; hence the comments from Nikon's President.

Canon has experimented with ultra-basic and connected cameras, and Olympus has begun eliminating its point-and-shoot lines altogether. But these band-aid solutions won't carry a company.

Will the most familiar names in cameras for the last century be reduced, like Kodak and Polaroid, to odd jobs in the industry like making sensors and manufacturing X-ray machines? Or will they find something in the next few years that makes everyone in the world want to buy a camera again?

More pictures are being taken by more people than ever, but the companies that brought digital cameras to the masses may be doomed, if not to failure than at least to obscurity. Whether they'll run themselves into the ground or pull themselves out of the rut will be seen in the next few years.

Devin Coldewey is a contributing writer for NBC News Digital. His personal website is