March 6, 2006 – Market research firm The NPD Group announced their annual digital camera market predictions today. After other research groups predicted slowing sales and production, The NPD Group’s forecast is sunny with clouds still several years away. The point-and-shoot and DSLR markets are expected to grow through 2007, when the point-and-shoot market will peak and the DSLR market will continue to increase.
“The notion that the digital imaging market is losing ground just isn’t accurate,” said Stephen Baker, vice president of industry analysis at The NPD Group, in today’s press release. “Overall, the short-term outlook is very good, and while the long-term outlook shows decline in sales, there is still great potential for the market.”
The U.S. digital camera industry raked in $6.8 billion in 2005 and The NPD Group expects revenue to swell another 8 percent. This translates to a 17 percent increase in the number of units sold, aiming for a record-breaking 29.5 million units in 2006.
Point-and-shoot digital cameras made up 73 percent of sales in 2005, but their popularity can’t be counted on in the long-term. Their sales will reach $5 billion in 2006, which is an 8 percent annual increase, but the market will hit a plateau in 2007. By 2010, revenue from point-and-shoots will account for 70 percent of sales while the units will account for 90 percent of the total market. This is partially because of falling prices and repeat buyers who are upgrading to DSLRs.
The NPD Group predicted that the average selling price of a point-and-shoot digital camera will drop to $182 in 2006, showing a 7 percent plunge from last year. Don’t wait for prices to really plummet though; this figure is only expected to fluctuate by five dollars in the next four years.
The real sweet spot in the market is DSLRs. Sales are expected to be up about 7 percent this year, with unit totals reaching 1.8 million – a 54 percent rise from last year’s numbers. By 2010, DSLRs will account for one-third of the industry’s revenue and only 11 percent of units sold. The average selling price of a DSLR is expected to be $942 in 2006, but will fall to $737 in 2010 as more and more consumer-friendly DSLRs hit the market.
Many industry research firms have predicted massive growth potential with the DSLR segment, but aren’t as positive about the point-and-shoots. Still, The NPD Group sticks to its methodology.
“The NPD Group’s forecasting model is a unique combination of point-of-sale and consumer data, along with econometric modeling and the expertise of our industry analysts,” Baker said. “That combination created a forecast for 2005 that came within two percent of The NPD Group’s actual consumer data for the year.”
