PhotoshopNews.com
Mar 8, 2006

THE NPD GROUP FOCUSES ON DIGITAL CAMERA FORECAST THROUGH 2010

Possibility of a Record-Breaking Year Sets Aside Predictions of Soft Sales Performance within Digital Imaging Industry

Press Release: PORT WASHINGTON, NEW YORK, March 6, 2006 – According to leading consumer and retail information provider The NPD Group, forecasts show the U.S. digital camera market will generate close to $6.8 billion in revenue and sell a record-breaking 29.5 million units in 2006. The digital camera market is expected to increase by eight percent in revenue and 17 percent in units over 2005.

The findings come from The NPD Group’s Market Outlook report, driven by a powerful new forecasting methodology that gives companies an unparalleled view of the market’s future behavior.

“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,” said Stephen Baker, vice president of industry analysis, The NPD Group. “That combination created a forecast for 2005 that came within two percent of The NPD Group’s actual consumer data for the year.”

POINT AND SHOOT SALES FORECAST
According to Market Outlook, point and shoot digital cameras, which represented 73 percent of 2005 digital camera revenue, are expected to reach $5 billion in revenue in 2006, an eight percent increase over 2005, while unit sales will account for 95 percent of the digital camera market, exceeding 27 million, a 16 percent increase over the same time period.

The NPD Group expects sales will begin to slow down in 2007, when the point and shoot market is expected to peak, but even with this change point and shoot cameras will remain the dominant technology, representing more than 70 percent of revenue through 2008, followed by a dip to slightly below 70 percent in 2009 and 2010 . Unit sales will account for 90 percent of the digital camera market through 2009, and dip just slightly below 90 percent in 2010. The average selling price (ASP) for point and shoot digital cameras will drop in 2006 to approximately $182, a seven percent decline from 2005, and only fluctuate within five dollars through 2010.

DIGITAL SLR SALES FORECAST
While digital single lens reflex (DSLR) sales make up a significantly smaller portion of the digital camera market, The NPD Group forecast shows DSLRs comprising 33.6 percent of revenue and over 11 percent of unit volume by 2010.

In 2006, sales in the U.S. could reach $1.7 billion, a seven percent increase over 2005, while unit sales could reach 1.8 million, a 54 percent increase over last year. The ASP for DSLRs in 2006 is expected to decline over 30 percent to around $942, and continue to fall through 2010, settling at around $737.

“The notion that the digital imaging market is losing ground just isn’t accurate,” said Baker. “Overall, the short-term outlook is very good, and while the long-term outlook shows declines in sales, there is still great potential for the market.”

About The NPD Group, Inc.
Since 1967 The NPD Group has provided reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,400 manufacturers and retailers rely on NPD to help them better understand their customers, product categories, distribution channels and competition in order to help guide their businesses. Information from The NPD Group is available for the following major vertical sectors: apparel, appliances, automotive, beauty, consumer electronics, food and beverage, foodservice, footwear, home improvement, housewares, imaging, information technology, music, software, toys, video games, and wireless. For more information, visit www.npd.com.

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