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Digital camera growth better than expected in '07

NEW YORK (Reuters) - Consumer appetite for digital cameras so far this year has grown twice as fast as expected, as buyers replace older models at cheaper prices, according to research firm IDC.

Moreover, many are upgrading to more powerful cameras, IDC said on Tuesday in its report “Updated Worldwide Digital Camera Forecast.”

Global digital camera shipments are expected to grow by about 15 percent this year, IDC said, double its previous forecast of 7.5 percent, reversing a trend of declining growth seen over the past four years.

IDC analyst Chris Chute said cameras are becoming a kind of fashion item, a trend made popular by tiny mobile phones and Apple Inc’s iPod digital music player.

Similarly, the digital camera has become a personal, low priced item, whose sales are now more driven by impulse than utility, especially in the United States, Japan and Europe, Chute said.

“This year was the first that we had a lot of color cameras, a lot of them under $200,” Chute said, noting the trend toward more choices than just black or silver gadgets. “I think that is resonating with consumers.”

At the same time, the report showed that the average number of cameras in each camera-owning home has remained flat from 2006 at 1.4. IDC said that suggests consumers are replacing their cameras at a faster rate than expected.

Chute also noted that single-lens-reflex (SLR) cameras, favored by professionals and photography enthusiasts, will be more of a driver of the total market than previously thought as prices decline.

Average prices for all digital cameras, ranging from entry level point-and-shoots to SLRs, are expected to slip about 13 percent this year to $307 from $352 in 2006.

Chute added that demand for digital cameras, primarily those made by market leaders, Canon Inc, Sony Corp and Eastman Kodak, should remain strong for the critical holiday shopping season.

IDC said it boosted its growth outlook through 2011, with total units shipped seen at 138 million, up from an earlier expectation of 123 million. Prices are expected to decline to about $250 on average, Chute said.

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