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Camcorder Makers Look to Break Niche

The continued growth of digital formats and an influx of new technologies was not enough to spur camcorder sales beyond its traditional boundaries of 5 million-6 million units in 2004, according to manufacturers and analysts.

According to research firm IDC, the U.S. camcorder market shipped 6.2 million units in 2004, up from 2003’s 6 million. IDC includes hybrid models like Panasonic’s D-Snap and flash memory-based MPEG-4 video recorders in its totals.

Chris Chute, senior analyst, IDC, noted that camcorders “are a niche market, and will remain a niche market” despite the influx of new recording technologies and formats.

Sony’s director of camcorder products, Linda Vuolo, said that the challenge before vendors was the engrained perception of camcorder use.

“All consumers know what it is and whether or not it will fit in their lives,” Vuolo said. “We have to change that perception.” She said that Sony’s efforts in 2005 would be centered around ways to let consumers enjoy their video in more places and in novel ways with 5.1 surround recording, increased bundling of a docking station, and distinctive designs to attract new users.

“The market stays around 5 million units, with occasional spikes,” noted Rudy Vitti, national marketing manager, Panasonic. The next spike will come when HD recording dips below $1,000, which could occur by 2007, Vitti predicted.

While the overall unit volume is relatively static, the internal dynamics of the market are shifting with DVD camcorders growing quickly, followed by MiniDV.

According to NPD, DVD camcorders grew from just under one percent of the market from October 2002 to September 2003 to a little under nine percent of the market in the same period ending September 2004 — a growth rate of over 900 percent.

MiniDV grew to 50 percent of the total camcorder market in the past twelve months ending September 2004, up from 36 percent in the same period in 2003, a growth rate of 37 percent.

Price is less a motivator than the allure and acceptability of the DVD format, said Jeff Fochtman, product manager, Hitachi.

“To some extent, $599 was the magic number” for DVD camcorders, Fochtman, said. “I don’t know if anyone can do $499.” Fochtman noted that other recording formats pique Hitachi’s interest. “Hard drives are our core competency,” he said, adding that a hard drive-based device is something the company is working on.

Canon’s assistant manager of product marketing. Mitchel Glick, noted that MiniDV “has an awful lot of support” among consumers. He noted that the Canon approach to the market has been “conservative” — letting the market crown a victorious format before the company commits to it. He said the company was carefully monitoring DVD but “the price points are still a bit high.”

As for HD recording, which both JVC and Sony have introduced into the higher-end of the consumer video market, most vendors were taking a wait-and-see approach.

“HD display penetration has to come first,” Vitti said. “After that, you have the question of how do you play it back?” Vitti said Panasonic was evaluating three different directions in HD recording: direct to SD flash memory cards, to a hard drive. or to an optical format such as Blue Ray.

“I think by 2006 you’ll see a clearer direction,” Vitti said.

“The question is: what is HD,” wondered Chute. “There has to be a shakeout in formats and standards first and that’s always messy.”