Jessops has issued its third profit warning this year as the company says it is struggling to make money from falling prices of digital cameras.

While the price drops of digital cameras means great news for photographers, the news isn't helping the camera retail chain's bottom line forcing the share price to plunge by 70% to just 14.5p at the close of business yesterday.

"Jessops is experiencing unusually tough trading conditions, driven by severe price deflation in the camera market, leading to pressure on both revenues and margins", said chief executive, Chris Langley.

Commentators believe that the influx of hundreds of different camera models, mobile phones with digital cameras and a move to Digital SLR models are to blame.

"When you've got Pentax offering a 5-megapixel compact for only £99 you've got to start wondering how you are going to make a profit on that? Reportedly Canon is the only company to make money from the sale of digital cameras", one industry insider told us.