Industry Sees Camera Growth Continuing

By Greg Tarr On Jan 6 2011 - 6:01am

LAS VEGAS — Despite a relatively saturated U.S. penetration rate, digital camera sales enjoyed a year that was among one of the consumer electronics industry’s healthiest in 2010, and industry observers expect more of the same in the year ahead.

According to U.S. camera sales estimates from Chris Chute of IDC Research, the compact digital still camera category saw 2 percent growth in 2010 to around 36 million units, while d-SLRs were expected to finish out the year with a 27 percent growth rate to 3 million units.

Chute said, “Memory-making-machines have survived the digital age, and the recession and have bounded back better than we had forecast last year, even compacts. Consumer fascination with photography, as well as the availability of inexpensive PCs, software and online communities, have made high-end photography more accessible than ever.”

Among the key trends to look for in 2011, Chute said, are for the new mirrorless interchangeable-lens (MIL) category “to really take off behind the arrival of another entrant, Sony, and heavy marketing support. HD video recording will become more and more prevalent in the compact camera segments, as will waterproofing from Sony, Nikon and others. 3D capability and other gyro-sensor features will become increasingly prevalent in more manufacturers lines this year.”

The burgeoning MIL business, meanwhile, was on target to close the year with a whopping 500 percent growth rate to around 300,000 units, said IDC’s Chute.

“But The NPD Group’s recently released study ‘The Next Camera’ shows that even among consumers who expressed high interest in mirrorless hybrid cameras, a $500 price point posed a strong barrier, followed by a concern that they would lose some of the features available on a traditional d-SLR,” said Liz Cutting, NPD consumer products imaging analyst executive director. “The three main priorities among those who would be interested in a mirrorless hybrid were picture quality, quality of the lenses, and the ability to take photos quickly, as spontaneous moments occur.”

As for digicams in general, Chute sees a solid year ahead, with U.S. sales of almost 40 million in 2011 with d-SLRs and compact interchangeable-lens cameras making up 11 percent of the total.

Cutting said d-SLR sales growth should continue, supported by a relatively low household penetration of just 11 percent. The success of d-SLRs in 2010 helped lift industry profitability to 4 percent despite a 2 percent overall camera unit decline, according to NPD estimates.

“Where in the past the d-SLR category was driven by older males, the new demographics include an increasing amount of women,” Cutting observed. “With promotional campaigns and new products like mirrorless hybrids, we’re sure to see more buzz generating around the entire segment in 2011.”

Point-and-shoot cameras, meanwhile, were down 5 percent in both units and dollars in 2010, but “we saw a continuation of the move to longer zoom cameras, particularly slim zooms 10x and above, which have grown from 3 percent to 12 percent of compact dollars,” said Cutting.

“While Panasonic owned this segment two years ago, today, Sony, Canon, Kodak and Nikon all have double-digit unit share, and the price point has declined by only $8 to $275,” she continued.

As for HD video recording in cameras, Cutting said Canon and Sony both led the charge in 2009, joined in double-digit share in 2010 by both Nikon and Fujifilm.

NPD’s Cutting said, “In both detachable lens and compact cameras, HD video capture has been a huge shift. From year-to-date October 2009 to 2010, HD video presence in compact cameras tripled from 12 percent to 36 percent, helping to stabilize the overall compact camera average price, which is flat at $165.”

In detachable-lens cameras, HD video went from 28 percent to 64 percent of unit share, she added. 1080p-capable detachable-lens models grew from 12 percent to 34 percent while 720p grew from 12 percent to 34 percent.

“Canon has dominated the 1080p HD video scene among detachable-lens cameras, with Nikon onboarding two models in the fall of 2010 and hitting 23 percent of 1080p-capable detachable- lens cameras in October 2010,” Cutting said.

Meanwhile, according to NPD, a 720p HD video capable compact camera carried a $224 average selling price, as of October 2010 (year to date). Nearly all compact cameras that record HD video are 720p (2 percent were 1080p with an average price of $382).

As for the growth of camera models with 3D capability, IDC’s Chute said 3D will amount to “little more than a niche camera segment in 2011.”

NPD’s Cutting agreed, adding that NPD’s 3D 360 Monitor “showed less than 5 percent of consumers are even aware of 3D digital cameras. Yet about a third stated they’d be interested in recording personal memories in 3D. Certain parts of the population will be more likely to get enthused about 3D — younger consumers and gamers are part of this set. Consumers are more likely to be thrilled by 3D up close and personal, with their own content.”

She suggested that more in-store displays enabling “eyes on” personal experiences should whet consumer appetites for a 3D capture device of their own.

As for brand share battles, Cutting said that Nikon stayed relatively flat in dollars at 26 percent in 2010, while Canon gained two points to 37 percent in dollar share from year-to-date October 2009 to 2010.

“Canon has grown its share specifically in d- SLRs, particularly in the 1080p arena,” Cutting said.

“The mirrorless hybrid players hit 7 percent of detachable-lens camera units in July, August and September and around 5 percent in dollar share, but seem to have an additive effect as opposed to cannibalization.”

As MIL models grow, some share is likely to come from the d-SLR category, where Canon and Nikon rule the roost, but neither company has yet announced plans to offer a MIL model or equivalent of their own to stave off the new challenge.

In the meantime, Chute said, “Sony has emerged as a stronger player this year, challenging Canon and Nikon. Canon has shown some general softening across their unit share in the states.”

The likely result, he added, will be for the increased brand advertising and promotional campaigns seen in 2010 to continue behind key product introductions throughout the year ahead.

“The marketing that emerged earlier this year will continue well into 2011,” he said.

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