• Camcorders sales to dip slightly in 2005.

• Digital models to account for 79 percent of 2005 camcorder sales.

• MiniDV out distance Digital8 models.

• New high-definition camcorder formats hit the market.

Sales of camcorders continue to shift toward digital models that offer clear images, dual motion and still image recording capability and compact body designs. Despite the innovations, category sales reached a peak in annual sales volume in recent years, and sales are expected to be relatively flat or slightly down in 2005. Overall category sales dipped 1.2 percent to 5.5 million units in 2004. The impact of new digital still cameras with the ability to record short video sequences on flash memory cards has given consumer new options to consider when looking to make home movies, and this is expected to escalate somewhat in 2005.

This year, CEA predicts factory unit sales of analog and digital camcorders will decline again by 1.2 percent to 5.4 million units, as the average price of a camcorder declines from $305 to $300. This will drive factory revenue down 6.9 percent to $1.64 billion, CEA estimates

While overall unit volume is relatively static, the internal dynamics of the market are shifting. According to CEA, while 53 percent of camcorders sold in 2003 were digital, the percentage grew sharply to 70 percent in 2004, and is estimated to grow to 79 percent in 2005.

In addition, camcorders that use recordable DVD media also are growing quickly, followed by MiniDV. According to NPD,

DVD camcorders grew from just under one percent of the market from October 2002 to September 2003 to a little under nine percent of the market in the same period ending September 2004 — a growth rate of more than 900 percent. 

A new trend emerging in 2005 is the development of digital camcorders that record video and still images to removable hard disk drive chips. These new models eventually may replace tape-base formats as prices on media are further reduced while storage capacity increases. Additionally, camcorder manufacturers are trying to keep stride with the megapixel (digital still pictures with more than 1 million total pixels of resolution) designs of digital still cameras. Many step-up digital camcorders featured megapixel digital still photo capability. Additionally, advanced digital camcorder models continued to include the ability to wirelessly connect to the Internet without a PC in order to send digital photos or to download email and news services for reading on the unit’s LCD screen. Higher-end digital camcorders also are improving the quality of the optics used in their lens designs, to further sharpen digital still photos and videos.

Digital 8mm Models Become more Affordable:
The digital 8mm format was introduced as an entry-price-point alternative to more expensive MiniDV format models, which helped to bring more consumers into the digital field. Today, however, the format continues to see reduced sales as MiniDV models become wider spread and more affordable. Sony, which pioneered Digital8 technology, will keep the format alive this year by introducing a model positioned to retail for below $300. This was previously the territory of analog camcorders and will put another nail in the coffin for camcorders based on the more archaic analog 8mm and VHS-C formats this year.

Digital8 models offer some users greater flexibility of use than MiniDV models. Digital8 camcorders will playback old analog 8mm tapes in addition to playing and recording digital videos on virtually the same media. In addition manufacturers have attempted keep the category attractive by adding step-up features not found in MiniDV models at the same price points. One of the major selling points of the Digital8 line in the past has been their very large optical zooms, some of the largest in the industry. But this advantage will weaken somewhat this year as large zoom ranges are added to some affordable MiniDV models, as well.

MiniDV Sales Grow:
Camcorders based on the MiniDV digital tape format grew to 50 percent of the total camcorder market between September 2003 and September 2004, up from 36 percent in the same period in 2003, a growth rate of 37 percent, according to market research firm NPD. A key driver was reduced entry pricing with some models starting at just over $300.

Many MiniDV camcorders now offer flash memory card slots for storage of digital still shots, enabling the camcorder to do double duty shooting videos and photos. These memory cards offer greater bandwidth than DV or D8 format tapes, which is necessary for storing megapixel snap shots. Most digital models offer LCD view screens and stereo sound recording. MiniDV camcorders store video images with a 5:1 digital compression scheme.

DVD Camcorders Continue to Grow:
As with video recording decks, an increasingly popular trend in camcorder design is to employ optical disc recording media instead of tape. Among the chief advantages of optical discs over tape is instant random access to different scenes and chapters on the disc without having to wait to fast forward or rewind to the appropriate entry points on a tape. This makes editing home videos a much easier process and allows for fast instant replays in the field. Additionally, depending on the format use, DVDs recorded in a camcorder can be dropped into a DVD player without the need to hookup a camcorder to playback images.

According to market research firm NPD, DVD camcorders grew from just under one percent of the market between October 2002 and September 2003 to a little under 9 percent of the market in the same period ending September 2004 — a growth rate of over 900 percent. This will accelerate significantly in 2005, analysts said. The magic price point for DVD camcorder seemed to hit at $599.

Several companies have introduced camcorders using various optical disc formats. Hitachi, which has marketed camcorders using the DVD-RAM/DVD-R format for the last four years, opted in 2002 to drop tape-based camcorders entirely in favor of systems employing the smaller 8cm disc formats. Panasonic also added a DVD-RAM/-R camcorder to its line, while Sony aggressively promoted camcorders based on the DVD-RW/-R disc formats during the 2003 holidays. These camcorders use an 8-cm version of the 4.8-inch DVD discs. The media comes in a protective caddy that prevents damage in handling.

High-Definition Camcorders Begin Slow Adoption Course:
The next camcorder segment on the horizon will be comprised of models capable of full high-definition television resolution levels. Early entrants into the field arrived in 2003, followed soon after by standards for HD tape. Prices that started at more than $3,000 kept the market volume low in 2004, with only modest growth in 2005. However, manufactures believe the accelerated adoption rate of digital television products soon will make camcorders of comparable capabilities highly demanded items.

JVC Continues to Pioneer HD Camcorder Designs:
In January 2003 JVC introduced the future of consumer digital camcorders when it unveiled a consumer model based on the MiniDV tape format that will record both standard definition and HD 720p high-definition videos. The unit sold for $3,000, and would record in the native 720p at 30fps, 480p at 60fps, and 480i. For playback, images could be converted and output at the 1080i, 720p, 480p, and 480i levels. In addition it produces digital still shots at 640 x 480, 848 x 480, 1280 x 960 resolution. The camcorder offers the same record time on MiniDV cassettes for HD as it does for SD videos.

HD Camcorder Standard Arrives:
In July, 2003, four Japanese CE companies, JVC, Canon, Sharp and Sony, developed specifications for an HD camcorder format for the recording and playback of HD video on DV cassettes. It is based in part the earlier JVC design and was dubbed "HDV."

Specifications Offer Options:
The HDV format includes the 720p/30 frames per second (fps) system that JVC uses in its original HD camcorder, and adds to that a 1080i spec, at a variety of frame rates. The companies said that adopting both 1080i and 720p would enable the development of products conforming to the global high-definition infrastructure. HDV products will not be required to support both 720p and 1080i.

Resolution for 720p is 1280 x 720, and for 1080i is 1440 x 1080, with a 16:9 aspect ratio. The frame rates for each are: 720p (60, 30, 50 and 25) and 1080i (60 and 50). The HDV format specifies data recording of MPEG 2 compressed HD signals based on the DV format. Audio signals are digitized with 48-kHz/16-bit quantization sampling.

Sony Enters High-definition Camcorder Field:
Sony introduced the world's first 1080i HD consumer camcorder for the 2004-2005 selling year. The model supports the HDV tape format, which uses MPEG 2 compression to record and play HD on DV cassettes. The camcorder offers three CCDs. Sony's first consumer HD camcorder records and plays back HD video with 1440x1080 resolution using HDV's 1080/60i spec (60 fields per second, two fields create a frame in interlaced).

Hard Disk Drive Camcorders Arrive:
A new trend in camcorder development in 2005 is moving away from tape and DVD-based formats for storage in favor of flash memory chips or tiny removable hard disk drives, measuring 1.5-inches square. Manufacturers following this path note that music players have gone from tape to CD to hard drive, and feel that video is ripe to follow a similar course. The disadvantage to these approaches, at least in the early going, is the much higher cost of storage media compared with tapes or DVDs. Early HDD camcorders were based on MPEG 2 instead of MPEG 4 compression, which enables a 4 GB micro hard drive to store 60 minutes of video at 720 x 480 resolution levels.