• Digital camera sales hit a new record in 2005.
• Camera phone category continues to grow as higher resolution models are introduced.
• DSLR market growth fuels digital accessory sales.
• Digital film shows growth.
• New print options emerge at retail.
• Digital camcorders overtake analog.

2005 was a stellar year for digital camera sales. CEA reported in its annual Forecast Report that digital camera sales totaled 24.6 million units on an estimated $7.4 billion in 2005. The average digital camera unit price increased from $251 to $303.

According to PMA Marketing Research's latest figures, in 2005 digital camera sales reached a new high with an increase of 13.5 percent to 20.5 million units. For 2006, sales are expected to increase slightly and then decline for the first time in 2007. This was an expected development as penetration of digital cameras already has reached half of U.S. households and replacement cycles of higher resolution cameras by consumers continue to lengthen.

Total camera sales already appear to have peaked in 2005, as film cameras' contribution to the mix continues to decline. Not counting camera phones, single-use cameras and tethered computer video cameras, total camera demand was about flat in 2005 at 24.8 million camera units. The contribution of film cameras to the total sales mix was just 17.5 percent in 2005 and expected to be about ten percent by 2007. Two major manufacturers already have announced their withdrawal from the film camera market: Nikon (with the exception of two SLR models) and Konica Minolta, who were recently purchased by Sony.

In addition, a recent slowdown in sales of digital cameras was evident in the drop of Japanese exports to North America. PMA reports the average monthly growth in shipments of digital cameras from Japan to North America went from 43 percent in 2004 to only six percent in 2005. The holiday season in digital camera sales in 2005 was almost identical to the seasonality pattern in 2004. The majority (28 percent) of digital cameras were sold in December while the months of November and December together accounted for 40 percent of sales.  Retailers have faced shrinking margins and increased competition in digital camera sales. As digital camera sales growth ends in 2006, the focus will continue to shift toward output, accessory sales and other services that increase profits.

*Digital still cameras only, does not include camcorders with still or any other combination device.
Source: CEA Market Research