Trends

The Contrast between Compacts and

DSLR

DEMAND FOR DSLR AND COMPACT CAMERAS REACHED 34MSHIPMENTS ACROSSWESTERN EUROPE IN 2008 (6.7MIN THE UK), REPRESENTING 1%GROWTH FROM2007. HOWEVER, THE TWO FORMATS HAVEWITNESSED VERY DIFFERENT TRENDS OVER THE PAST 17MONTHS; THE DSLRMARKET HAS CONTINUED TO GROWTHROUGH THE ECONOMIC SLOWDOWN,WITH SHIPMENTS INCREASINGMORE THAN 25%IN 2008,WHILST THE COMPACTMARKET WITNESSED A DECLINE OF 1%. THIS IS DESPITE THE FACT THAT THE AVERAGE DSLR CAMERA COMESWITH AMUCH HIGHER PRICE TAG (AN AVERAGE RETAIL PRICE OF  768 IN 2008 COMPARED TO  181 FOR A COMPACT).

In 2009, data taken from Futuresource’s continuousmarket tracking shows that shipments of DSLRs across January toMay have continued to hold up, growing 8% compared to the same period in 2008,whilst the compactmarket witnessed a decline of 5% over the same period.

The reason for this trend originates

fromthe two formats being at different stages in their product lifecycles.The compactmarket has reached its natural peak as household penetration starts to near saturation (54% at the end of 2008). In addition, key technology developments for compacts are increasingly driven in terms of improvements to core functionality that is already of a satisfactory level formost users,which is lessening the need for consumers to replace devices every two years, as has been the case over the past 5 years. On the other hand, demand for

DSLRs acrossWestern Europe has remained strong over the past 17 months as themarket is far from saturated at 5% household penetration (expected to reachmore

than 9%by 2012).Other factors are also helping to drive the DSLRmarket: the average retail price of a DSLR has fallen sharply (-23%between 2007 and 2008), new entrants to the SLR market such as Panasonic, Sony and Samsung have helped to drive consumer awareness of the format and DSLR technology has continued to innovate (e.g.HD video capture, live view, ever smaller formfactors),which as well as driving sales fromnew users has also encouraged current users to replace their existing cameras. Distribution of DSLRs has also widened beyond the photographic specialist channel – in 2006 photographic specialists across Western Europe represented 31% (44%in the UK) of shipments compared to 25% in 2008 (34%in the UK) - which again has helped to drive consumer awareness of the category as well as driving prices downwards. Moving forward, shipments of total

cameras acrossWestern Europe will reach just short of 29mby 2012 (5.6min the UK),with compacts accounting for 25mand DSLRs the remaining 3.7m. Looking to the DSLR lensmarket in

Western Europe, shipments grew by 28%last year, following closely in line with the growth witnessed for DSLR cameras. Lens shipments continue to remain heavily tied to DSLR camera shipments – nearly 80%of all DSLRs sold were bundled with at least one lens – and one in ten of these bundles were sold with two lenses. Lenses sold at aftermarket

(unbundled) inWestern Europe last year accounted for around 36%of total lens sales,which is expected to witness some growth over the next four years, reaching 40%by 2013.This will

be predominantly driven by the increasing opportunity to sell at aftermarket presented by a larger pool of DSLR camera owners and the fact that the bundledmarket will witness a slight decline long termas a growing number of existing users will already have a collection of lenses and decide to purchase a camera back without a lens bundle.

by Jim Bottoms,

Company Director, Futuresource Consulting

‘The compactmarket has reached its natural peak as household penetration starts

to near saturation (54%at the end of 2008.)’

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