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Home >> Bundles Aim To Push Digital Photography Onto Analog Holdouts
Digital photography's ascendancy over its analog rival has been a unit sales rout several years running, but film cameras are still entrenched in a large number of U.S. households. Into this breach, camera makers are firing a volley of bundled snap-shot printers and low-cost digital cameras to smash the last resistance of the film using hold-outs.
According to Chris Chute, senior analyst, IDC, digital camera penetration is projected to peak at roughly 62 percent of U.S. households or “most of those with Internet connections.” Today, digital camera penetration is roughly 50 percent of U.S. households. Film cameras in their heyday (1999) enjoyed 84 percent penetration, according to the Photo Marketing Association.
The gap between film and digital penetration owes to digital photography's reliance on a computer, Chute said. Digital cameras “are a PC peripheral and are PC-centric, which will limit their adoption,” Chute said.
It is this PC-less user base that manufacturers are courting with printer bundles. Indeed, bundling activity in the fourth quarter will reach unprecedented heights, say retailers and manufacturers. While cross promotions are a seasonal mainstay, this year will witness a marked increase of the so-called “hard bundle” of two products in a single box.
Sony will offer its first hard bundle in the fourth quarter to specific dealers, combining the DSC-40 with the company's SP30 photo printer. Olympus began shipping a camera and printer dock solution this fall based on Kodak's ImageLink system. Kodak's own Series 3 dock is bundled with its Z750. Hewlett-Packard's first hard bundle, the PhotoSmart 428 GoGo Photo Studio, is also shipping.
“The bundle offers consumers a complete solution and has probably helped in persuading traditional 35mm customers to finally convert over to digital,” said Kristen Elder, senior buyer, Circuit City.
Bundles will have a bigger impact this year, said Ben Dicks, imaging and printing merchant, Office Depot. As the price points for entry-level digital cameras fall, suddenly a printer/camera solution can land in the $199 to $299 range, with or without excessive rebating, he added.
“I think for manufacturers to continue to sell to new buyers, we need to keep making these digital technologies easier and easier to use ,” Elder admonished. “These film-using customers are looking for a solution to give them pictures that they can share. If the customers don't have a PC, prints are their main form of sharing. Getting prints must be as easy as it is with film,” Elder added.
Bundles “are a big deal,” said Liz Cutting, imaging analyst, The NPD Group. Tracking hard bundles, the research firm found they comprised 3.1 percent of all digital cameras sold in October 2004 and 5.9 percent of all camera sold in October 2005 — a spike in growth before the holiday season has even begun, Cutting said.
Photo enthusiasts don't typically embrace the bundle, said Mary Gentile, assistant merchant at Office Depot, preferring to create their own solution.
Driving the success of the bundle has been consumers' seeming love affair with the 4-inch by 6-inch, or “snapshot” photo printer. While the overall inkjet printer market is sagging, “photo size printers” (defined as printers that make prints no larger than 8 inches by 10 inches, the majority of which are dedicated 4- by 6-inch models) are up 44.2 percent in unit sales through October 2005 vs. the same time last year, Cutting said.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.