Not only are film-based cameras not expensive or hard to find, they actually outsell digital ones in the form of disposables. I read somewhere not too long ago that they outsell non-disposable cameras by over 25%. (I'm assuming those sales figures meant discrete cameras, rather than including cell-phones. I'll try to find it to check.) Interesting anecdote: my wife and I bought 25 of them for our wedding, and it seems unlikely we will buy 25 digital cameras combined in our lifetimes.

A lot of the reason for their popularity is cost. Disposables are dirt cheap. There's little upfront investment. Most people who can't afford a computer (and therefore would probably not spend $200+ on a picture frame) like that.

So right away, I'd just not worry about lower class families. You aim gadgets at middle class +. I guess my argument is that I don't see much market for a $200+ digital frame amongst people who don't have broadband. There are probably a number of people who have broadband but not wifi who might like the product, hence my suggestion to offer a bundle with a cheap, preconfigured router. (Supposedly only around 40% of broadband homes have WiFi).

I know what you mean about assumptions, but startups are all about making them, building toward them, then narrowing down as you collect feedback from customers. There's simply no way to collect the relevant facts, you have to start from assumptions. They could maybe do some market research, which is slow and expensive, and at least narrow down the assumptions. Or they can just aim their product at the people who can afford it and are likely to want it, and work from there.

So if I were them, I'd focus on building a kick ass wireless frame. Most people who have digital cameras and have experienced sharing them online will probably get it.

Alright, we meet in the middle then. On another note, you know one factor that will make a break their company? It's the color of the actual frame. I would never ever buy one of those fake wood made of plastic frames, because they look hella corny. They really need to work on the finish of the frame to make sure it looks really good.