1. a public/private key exchanged during device-production (production-cost),
2. the capability to reboot in a cryptographic mode (R&D / component cost) and
3. a cloud-service which then processes the raw data to create a JPG (operational cost)
comes at a premium. Why should this premium be applied on a 99 USD Smartphone?
Which is my whole puzzle on this vector: If the big benefit is for insurance/ID-verification, which apply cost-saving by offloading their process to the untrusted customer, how much they can offload this by requiring their customer to own a 1000+ USD smartphone to provide THEIR service...?
The most I can imagine is insurances offloading their work to OTHER companies, NOT trusting them and therefore requiring them to own a 1000+ USD Smartphone. But even then, why not use a third party app that also runs on a 3y old iPhone and a 99 USD Android device...?
Okay. In good faith, I'll go with you:
If COST is not a factor, why does the Galaxy A16 still have no OIS (Optical Image Stabilization)?
Unlike this trusted-imaging service, OIS would be a feature for increased user-experience which is highly-matured and exists in Smartphones since 2013.
The answer is COST: A camera-module with OIS is a more-expensive component than a module without it.
And that's ONLY the component-cost: A OIS-camera doesn't come with increased cost in device-production (it's just another component to place and assemble), no increased cost in R&D (the tech is very mature, all the SW is there) and no running costs (there are no cloud-services required to operate OIS)
Also, OIS is a major mechanical add on (a literal motor) and even 1500usd smartphones lack it on some of their sensors, mainly because while it can have an advantage on an ultrawide, that tends to be more limited. Incidentally, most 99usd phones have one (actually usable) sensor which thus tends to have a larger width to compensate. I hope, in good faith, you see the difference, to something like ARI.
AMOLED, etc. are also a bit more expensive then OIS, but we get those into a sub 100usd BOM easily somehow. More so for 5g, certain features just become expected/required.
Your logic would lead to OEMs making SOCs without things like TEE and other things which started in the high-end but quickly became required and essentially free to implement.
Not saying it is free now, but that the upcoming gen of chips from Sony, Samsung, etc. will have it build in for such a minimal BOM impact, this will be an expected, common place feature across all prices.
To have a more serious, honest and accurate comparison than OIS, why do most new smartphone at 99usd include some form of an NPU? Or the trusted modules for biometrics, etc.?
But the assumption that smartphone cameras, including those used in 99USD smartphones, will become 100% cryptographic cameras in a few years is highly unlikely, considering that those cameras didn't even gain OIS in the last 13 years despite the feature being highly matured and widely available.
Changing the topic to other features won't change that.
You seem to lack the understanding how this industry works, and assume that every development naturally just trickles down and becomes a commodity. This is not the case.
This cryptographic feature will definitely become available from camera sensor suppliers, first of all likely from Sony. But it will be a feature of premium sensors and will remain a differentiation factor.
Sony will not support cryptography to its sensors without additional cost. Device-vendors integrating those sensors then have additional cost in R&D, production AND operations. All this will not be waived and put in a 99USD device.
For the other assumption, that "If this type of thing becomes required", I fail to see how this should happen for a mass-market consumer: This feature doesn't authenticate the content of an image, it just authenticates the RAW data of the image sensor. It won't (and shouldn't!) make the user more trusted towards another entity (like Apple mentions themselves in the link)
The timestamping server is the hard part, especially with the verified compute component. It's just not something I see Samsung doing.
I expect Google to show up with a blog post titled "extending C2PA with timestamps for industry-leading authenticity confirmation" any time.