EETimes has an interesting article about semiconductor industry ever-changing leadership by Walden Rhines, Mentor Graphics CEO. It has an interesting passage about image sensor market:
"One of the more amazing aspects of the increasing pervasion of semiconductors into new applications is the significant growth in revenue of existing applications as the cost per unit decreases. Consider the digital camera. Most of the semiconductor content of a digital camera consists of non-volatile FLASH memory and the image sensor. In the early 1990s, solid state image sensors sold for $20-25. Image sensors were a negligible portion of the semiconductor total available market (TAM) until the current decade. During the 1990s the price per sensor fell dramatically from the $20-25 range to about $5. At this price point, unit volume soared, making image sensors more than 3 percent of the semiconductor TAM in the last few years. ...The result was a substantial net growth in the market for digital cameras and the semiconductors required to make them."