Digital product prices fall as sales hit new heights
By Nadia Cameron

SYDNEY (04/12/2006) - Sales of digital lifestyle products hit a record A$3.6 billion (US$2.64 billion) last year, according to a new analyst report.

The latest Canon Digital Lifestyle Index (CDLI), compiled by GfK AG analysts, found total sales leapt 36.8 per cent compared to the previous year.

Project manager, Angus Macaskill, said this was achieved despite a significant fall in average prices across most product categories.

Photo printer prices fell furthest, dropping by an average of 52.8 per cent to less than A$110.

GfK attributed this to increased product distribution, as well as camera and photo printer bundling in the retail sector. Average plasma TV prices also dropped 30 per cent.

Macaskill said market growth of more than 30 per cent in each of the past two years, despite falling prices, showed that consumers were spending enormous amounts of money in a market that didn't exist just three to four years ago.

The good news for sellers, he said, was that consumers were no longer waiting two to three years to upgrade existing digital products.

Macaskill estimated a third of consumers purchasing digital cameras in the past year had already owned a model. Improved consumer understanding of digital products and their compatibility also helped push sales. This was evident in the corresponding rise in photo printer and digital still camera sales, widescreen TVs and DVD recorders.

Digital still cameras continued to be the most popular product, with almost two million units sold in the second half of 2005. These amounted to $471 million or 22 per cent of total spend.

According to Macaskill, one in every three Australian adults now owns a digital camera.

Plasma TV sales reached $440 million and accounted for 20 per cent of spending, while LCD TVs sales trebled compared to the same six-month period a year earlier to hit $234.5 million. Digital media players also saw significant growth, accounting for 16 per cent of market spend.

"Digital media players are enormous. In the first half of last year [2005], sales were ten times those of the previous year," Macaskill said. "This was off a small base but we still saw a 215 per cent jump in the second half when these products were already selling by the boat-load."

The introduction of Sony Corp's PlayStation Portable (PSP) helped keep game consoles on the must-have list, he said, with Microsoft Corp's Xbox 360 and the as-yet-unscheduled release of PlayStation 3 expected to see sales spike.