"I use my iPhone to take photos because it's more convenient and easy to share online," said Nie Miao, a landscape architect living in Chengdu, Sichuan province.

He said he isn't interested in buying a pocket camera himself, but he does plan to purchase a pair of new lenses for his father, who owns an 8,000-yuan single-lens reflex camera.

"A single-lens reflex camera is a must for the modern Chinese family, but cheap pocket cameras are just teens' toys," Nie said.

As overall sales stagnate, camera producers are looking at the high-end market.

High-end models costing about 7,000 yuan enjoyed an impressive 22 percent jump in first-half sales, said CMM. It said that single-lens reflex cameras, a major high-end camera category, accounted for a little more than 17 percent of the sales.

"Looking forward, digital camera giants are likely to set their sights on enterprise-level markets such as the medical industry to offset the decline in the consumer sector," said Zuo.

China's digital camera market was dominated by overseas brands. Top vendors included Canon Inc, Sony Corp and Nikon Corp, as well as South Korean Samsung Electronics Co Ltd.

Samsung said it is focusing on miniature single-lens reflex cameras, an entry-level product in the high-end market.

Canon, which declined to comment specifically on the CMM report, said it plans to lift China sales to $10 billion by the end of 2017, fueled by strong demand for top-end single-lens reflex cameras.

Ren Pengfei contributed to this story.