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Camera market not too shabby

April 14, 2011: The digital camera market has been impacted by what’s coyly termed ‘price deflation’ – selling more for less money – but has held up a lot better than the CE category overall, according to the latest figures from GfK.

We asked the CE industry’s market-leading market researcher to have a look at figures for the December – February period specifically, as this ‘season’ is so critical to the camera market in particular. It’s not often focussed on, as most data is looked at on a monthly and calendar year basis.

GfK’s account director for digital cameras, Brendan Dowd, dug deep and came up with, if not a beautiful set of figures, then at least an illuminating set, which puts camera retailing into some context.

When comparing the period December ’09 – February ’10 to Dec ’10 – February ’11, the total digital camera market grew 5 percent in absolute units sold, but saw a slight decline of -3 percent in absolute value.

This compares favourably with the total consumer durables market (based on all the categories tracked at GfK), which saw strong unit growth over the same period at +16 percent, with a value decline of -4 percent.

According to reports in trade and business publications (ie, ‘anecdotally’), price slashing in the television category has been responsible for significant slabs of that decline in value. But that flat screen price carnage didn’t necessarily lead to a huge increase in units sold. GfK identifies mobile computing as the saviour here:

‘One of the key reasons for that unit growth in the total consumer durables market was a strong performance through both storage and then the new category, webbooks (tablets),’ explained Mr Dowd.

‘Because Webbooks are new it means there are no sales in the previous period and that is helping push the unit growth.’

Half-full glasses

While the basic figures are no cause for breaking out the champagne (unless perhaps you half-filled the glass), the areas of growth give more cause for confidence, with DSLRs and the new Mirrorless Interchangeable categories – both of which offer better unit prices, margins and opportunity for add-on sales – performing well.

DSLR cameras grew at a phenomenal 35 percent in absolute units over the summer period (when compared to the previous summer). With higher prices for DSLRs (than Fixed Lens), that lifted their share of the overall market for digital cameras from 24 percent to 27 percent.

(GfK noted that this is based on the value for the body of the camera only and does not include the value for the lens. If lenses sold with cameras were included, DSLRs become even more of a hero category for the industry.)

Mirrorless category a work in progress

But has the new mirrorless interchangeable category caught the consumer’s imagination? Not in huge numbers so far, would seem to be the answer in the GfK figures.

They accounted for just 3 percent of the total digital camera market in the three months from December to this February. In trend terms, however, the story is more positive, with more mirrorless interchangeable models being sold in December and January than at any time over the past 12 months.

GfK further noted that the average price of a DSLR camera over the 12 month period from March ’10 to February ‘ 11) was $929, while the average price for mirrorless interchangeables during the same period was just $703. So not only are these new cameras a more compact alternative to DSLRs, they may well emerge as a budget alternative as well.

This could take pressure off the price of DSLRs at the entry level (Photo Counter’s musings, not GfKs).

Fixed Lens cameras also saw unit growth over the summer period, with 3 percent more cameras sold compared to last summer.

‘This means that the three areas of digital cameras that we track at GfK: Fixed Lens; DSLR; and Mirrorless with Changeable Lens, have all seen unit growth over the summer period.

Now if the growth trend continues, and we could just get some decent profit margins into all three categories, 2011 could be a better year than the string of natural disasters and the plethora of reports of consumers suffering confidence crises so far portent!

It’s worth harkening back to the plight of the flat screen category at this point. It’s an obvious point but apparently needs to be made to suppliers and retailers who too easily resort to a sharp pencil when, all too often, their marketing intelligence fails: Slashing prices is a slippery slope which leads to retailing misery.

Mr Dowd also shared some smart phone sales figures with us: Sales of smart phones with a camera function have more than doubled in terms of unit sales when comparing Dec ’09 – Feb ’10 to Dec ’10 – Feb ’11.

‘In Feb ’10, 16 percent of all smart phones sold came with a camera that was 3.5 megapixels or more. By Feb ’11, that percentage was up to 72 percent.

‘That means that just over 7 out of every 10 smart phones sold now has a camera in it that is 3.5 megapixels or more. And in Feb ’11 there were twice as many smart phones sold than in Feb-10,’ he said.

Mr Dowd noted that GfK’s retail tracking data is based on sales through retail and excludes all corporate, online and grocery channels.

Special thanks to GfK Australia and account director, Brendan Dowd, for their generous assistance in preparing this article.

– Keith Shipton

Special thanks to GfK Australia and account director, Brendan Dowd, for their generous assistance in preparing this article.

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