 |
 |
Year two thousand was a challenging year for digital camera vendors, one which sales parodied the U.S. economic dynamic. For the first two quarters, vendors could not procure enough units to satisfy channel and consumer demand, in the U.S. and on a worldwide basis. This trend started in late 1999 and continued to Q-1 and Q-2 of 2000. Inventory management was key to success for the largest digital camera vendors. Manufacturing until Q-3, 2000 was at maximum capacity and components including LCDs, CCDs, microprocessors, embedded flash memory, NAND memory and SDRAM were in short supply compared to the worldwide demand. Nearly all digital camera vendors saw accelerated growth through the summer of 2000 and it was looking like 2000 would be a banner year.
A softening in sales occurred in August through October, Q-3 and Q-4 of 2000. Sales then picked back up in November and December primarily due to incentives at retail and pricing actions, but not enough to positively effect the over-all growth rate, which declined from 79.3% unit growth in 1999 to 51.4% in 2000. Unit sell-through for 2000 was 3.8 million, generating over $1.8 billion in street revenue. In the U.S., the 3.8 million units sold-through was 500,000 units short of Imerge's projections at mid-year 2000 but was exactly what we projected in early 2000 and published in last year's consumer digital camera forecast and market overview. Because of the necessary three to six month lead-time for procuring components for manufacturing, most manufacturers are still in maximum capacity-ramp-up mode and have not forecasted for this downturn in sales volumes.
Unfortunately, nearly all component suppliers and Asian manufacturers based their forecasts for shipments on demand in the first two quarters of 2000 and were late to make corrective measures into 2001. Even shipment reports from JEIDA and other Asian manufacturing sources for digital cameras indicated a delayed reaction to the downturn in sales which also has every indication of continuing into Q-1, 2001 and possibly beyond.
The result will most likely be a glut of unsold inventory in the U.S. channel followed by pricing actions and rebates in 2001, particularly on the low-end effecting Taiwanese manufactured 2.1 and 3.3 mega-pixel programs. The delayed reaction by component suppliers creates a situation where high fixed costs do not provide a profitable business model for vendors with 2.1 MP low-end programs in 2001. In many cases, low-end vendors will experience a per-unit loss of $35 to $55 on each camera. Pricing actions in early 2001 by Fujifilm, SiPix, Kodak, Ricoh and HP have forced this market into premature commoditization. Those having the advantage of a subsidized business model such as SiPix, Kodak, Fujifilm and HP are forcing these pricing actions in a demand market, in an effort to acquire market share, parodying the flatbed scanner market of 1996. But there are still segments that will show strength and profitability, which this report identifies.
This report also identifies strategies of new consumer product vendors such as the SiPix Group, and why Goldman Sachs would invest $100 million into this unknown entity and their effect on the channel and OEM /ODM digital camera business. This report provides a thorough analysis of the five Kodak patents related to consumer digital that are being enforced. This report also identifies a clear pattern of subsidized and non-subsidized business models for camera vendors and technology alliances that will have a profound effect on other non-aligned vendors.
In 2000, we also saw for the first time, a franchise of peripheral products being attached to the growth rate of consumer digital cameras including: digital frames, e-commerce digital fulfillment sites, aftermarket CompactFlash and NAND memory, digital kiosks and digital camera companion products. We also saw the first few signs of consumer product vendors such as Sony, (ImageStation), Nikon (NikonNet), and Canon, (Canonhyperphoto.com) posturing for the future when they will add value to their products by providing a back-end, data center or portal for device to portal two-way communication.
As the franchise for peripheral digital camera products grows, the most important aspect of the digital camera franchise has not developed at the same rate of adoption as digital cameras. This is fast turnaround, cost effective printing for consumers. This single barrier will be an impediment to the potential of even higher adoption rates of digital cameras, worldwide over the next two years. Mass consumers do not want to spend their valuable time loading inkjet cartridges and paper. Nor do consumers want to wait three to five days for prints in what is supposed to be an "instant gratification experience" with digital cameras. This report delves into efforts to hurdle this barrier by developers and vendors.
This report identifies these and other drivers that made 2000 such a special year for consumer digital cameras. The Worldwide Consumer Digital Camera Forecast and Market Overview, 2000-2005 includes 2000-2005 units, (actual and forecast) ASV, (actual and forecast) street value, (actual and forecast) with regional share splits for the U.S., AP (Japan included), Europe, ROW and worldwide. It also includes technology segmentation market share in the U.S., anticipated year to year growth rates for units, and compound average growth rates for units, ASV and street revenue. It also identifies channel penetration percentages for each technology segment of cameras. Further, this report identifies the "killer apps for 2001" and much more. The report also identifies expected regional adoption, manufacturing capacity and techniques, channel strategies and identifies new business strategies used by market leaders.
To order this report:
email: tussy@ix.netcom.com
or
call: 650.631.5737
Other reports--
The Imerge Consulting Group
Worldwide Consumer Digital Camera Forecast and Market Overview, 2001 - 2006
TOC | Abstract
Digital Kiosks, The Future Photo Print Opportunities at Retail and Photo Density
Areas, A Multi-client Forecast, 2001-2006
TOC | Abstract
The ICG Digital Camera Flash Memory Forecast and Market Overview, 1999-2004
TOC | Abstract
The ICG Worldwide Consumer Digital Camera Forecast and Market Overview, 2000 -
2005
TOC | Abstract
©-2002 Imerge Consulting Group LLC