Digital Camera Sales Slows in the US

According to Reuters, fewer shoppers reached for digital cameras as a gift during the holiday season, leading to the first-ever quarterly decline in U.S. shipments, according to an industry report issued on Thursday.

In a clear sign the U.S. market has matured, shipments of digital cameras fell 3 percent in the fourth quarter to 12.1 million units from 12.4 million units a year ago, research firm IDC said in its "U.S. Digital Camera Market Share Review" report.

That was a sharp contrast from double-digit gains in previous years, when the attraction of film-less cameras swelled as consumers replaced their traditional film devices.

"Demand has definitely cooled," IDC analyst Christopher Chute said. "There was (also) a move away from giving an inexpensive camera as a gift and about 85 percent of those sold were to people buying another camera, maybe as upgrade."

Canon Inc. (7751.T: Quote, NEWS, Research) led the market with 2.5 million units shipped in the quarter, followed by Eastman Kodak Co. (EK.N: Quote, Profile, Research) at 2.4 million and Sony Corp. (6758.T: Quote, NEWS, Research) at 2.2 million.

Kodak, which bowed out of the low-end camera market in an effort to sell more profitable models, surrendered its top ranking to Canon for the full 2006 year. Canon had a 20 percent market share, followed by Sony with 17 percent and Kodak at 16 percent, IDC said.

For the whole of 2006, U.S. shipments of digital still cameras, including digital SLRs - or single-lens-reflex - models, reached 29.8 million units, driven by price drops and rebate programs. This represents only 5 percent growth over 2005.

Shipments to the United States are expected to rise, but only slightly in 2007, to about 30 million units, Chute said, as consumers continue to replace older models in order to get more powerful features.

IDC added that Samsung Electronics (005930.KS: Quote, Profile, Research) and Matsushita's (6752.T: Quote, NEWS, Research) Panasonic (6752.T: Quote, NEWS, Research), which has large marketing strategies in place, may be threats to top tier players.

Digital cameras have been around since the 1980s, but only became a mass-market item in the 1990s.

What is interesting is that that the hottest selling items are now LCD TV. According to CNet, LCD televisions beat out digital cameras to become the top-selling gadget during the 2006 holiday season.

From 2003 to 2005, digital cameras generated the most revenue when it came to U.S. holiday spending on consumer electronics, computers and cameras, NPD analyst Steve Baker said. But this year, the $925 million spent on televisions with liquid-crystal displays topped the $825 million spent on digital cameras.

"Clearly, price was a huge driver this year, and availability," Baker said of the LCD TV surge. In addition, LCD TVs spread to the more lucrative 30-inch-and-larger category, which plasma and rear-projection TVs previously had had largely to themselves, he said. A total of 1.3 million LCD TVs shipped in the holiday season, he said.