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PMA Goes Vegas, Bets Sales Will Rebound In '07

2/26/2007 02:00:00 AM Eastern

The 83rd annual Photo Marketing Association (PMA) trade show and convention gets underway, here, March 8-11. Befitting its return to Vegas, the 600-plus exhibitors are betting that the digital camera market will again shrug off tepid forecasts to register another year of strong sales growth.

(For complete coverage see p. 40, p. 58 and www.twice.com)

For the full year, the category climbed 22 percent in unit sales and notched a 9 percent growth in dollars, according to Liz Cutting, digital imaging analyst, The NPD Group.

Nevertheless, analysts are projecting that 2007 will see single-digit unit growth and a flattening of dollars as price erosion continues to whittle away at the entry level.

Already, signs of decline have appeared, said Chris Chute, senior analyst, IDC. He noted that that the fourth quarter of 2006 was the first in which the digital camera category experienced its first unit shipment decline, falling three percent versus the year-ago quarter.

Retail sell-through was strong in the forth quarter, Cutting said, thanks in part to the relentless price decreases that have beset the category.

"Since May [of 2006] there has been a sharpening of the month-over-month price decreases," Cutting observed.

Even higher-priced digital SLRs were not immune. Cutting said d-SLR prices on some models will hit $500 this year though the average selling price will hover closer to $900.

Those numbers have not scared off General Imaging, headed by former Olympus president Hiroshi Komiya (see p. 42) who's newly formed company will bring the first GE-branded digital cameras to market this spring.

Nor will they stop digital camera vendors from introducing as many, if not more, models in 2007, said Antoinette Marty, digital camera analyst, Current Analysis.

Of the hundreds of new models likely to reach store shelves in 2007, ultra-thin cameras will likely increase their hold on the market, Cutting predicted. In 2006, a full third of digital cameras sold were less than an inch thick.

One camera feature likely to find increase use this year is video, Cutting said. First, 1GB and 2GB flash memory cards comprised 50 percent of all memory cards sold in 2006. With that generous capacity, consumers can fit several minutes of VGA quality video onto their cards. Demographics will also drive video consumption, Cutting said. "More moms are using digital cameras and we've found that they are more likely than average to use a camera's video features."

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