The CDLI report says spending increased 36.8% in 2005, with consumers buying over two million DVD players, and almost two million digital still cameras and an almost equal number of digital media players.

The CDLI is independent research commissioned by Canon and delivered by GfK Marketing Services. It reports on acquisition and usage of various digital products by Australian consumers. The Index comprises information on digital still cameras, digital camcorders, inkjet printers, photo printers, DVD players, DVD recorders, games consoles, plasma TVs, LCD TVs, digital media players and multi-function devices. The index has been measuring uptake of digital devices in Australia since 2003.

Author of the report, Gfk Project Manager, Angus Macaskill, attributes much of this growth to the increased understanding consumers have of digital products. "Consumers have an enhanced understanding of the benefits they can derive from digital products and with this understanding comes a desire to see these products working together. Demonstrating this is the correlated growth of photo printers, digital still cameras, widescreen TVs and DVD recorders."

Highs and Lows
The second half of 2005 saw consumers spend almost $2.2 billion on digital products with the largest proportions being spent on digital still cameras ($471 million / 22%), followed by plasma TVs at 20% ($440 million). Meanwhile digital media players (such as iPods and other MP3 players) accounted for 16% ($241 million) of Q3 and Q4 2005 spending and LCD TVs 11% ($234 million).

Digital media player sales, an extremely successful new category in 2004, continued to increase exponentially in 2005 with sales growing a staggering 870% in the first half of the year (compared with the first half of 2004) and 215% in the second half.

Other categories with large sales volume growth in 2005 were LCD TVs, Plasma TVs and photo printers.

Wide Screen TVs experienced a sharp jump from last year, with Plasma TV sales increasing by 132% in the first half of 2005 and 125%in the second half, while LCD TVs grew 187% and then 283%.

Plasma TVs average quarterly sales over the past three years is 25,227 units but sales doubled in Q3 2005 to 53,884 and nearly tripled in Q4 2005 to 69,092. This indicates this technology is moving into the mainstream, largely encouraged by the significant 30% drop of average price from Q4 2004 to Q4 2005.

LCD TVs have experienced similar, but faster growth in 2005 with total sales of LCDs in the second half of 2005 equalling $234.5m, more than three times higher than the $70.6m sales in the second half of 2004.
Combined sales from Plasma and LCD TVs accounted for almost one third of all Australian spending on digital products in the second half of 2005.

Despite over four million digital still cameras being sold in Australia in the last three years, consumer demand continues to grow with digital still cameras accounting for the largest proportion of consumer spending in the second half of 2005. Sales reflected this burgeoning demand, increasing each quarter in 2005. Although the average sales price is decreasing, the regular release of upgraded products – often offering increased functionality at an even lower price – has consistently driven sales.

The largest average price reductions have been for photo printers (down 52.8% or $122.15 to an average price of $108.09) making them much more accessible to consumers. This drop in price is due to a number of factors, including increased distribution through large chains and bundling of photo printers with digital cameras and consumables. Although photo printers accounted for the lowest proportion of spending ($10m or 0.4%), photo printer sales are climbing consistently with second half sales of 84,655 units marking an increase of 31.1% compared to the same half in 2004.

Surprisingly, the statistics show that sales from Jan 2003 to Dec 2005 equate to one in every 4.99 Australian adults owning a game console. In keeping with the pattern from previous years, game consoles experienced their highest sales in the Christmas season. The release of the new Playstation PSP in the year saw the average price of a game console increase by 18.2% over the 12- month period from 2004 – 2005.

"These are phenomenal results. We are seeing an accelerated cycle of product demand where consumers are no longer waiting two to three years to upgrade their cameras, and now keeping up with technology revisions as these occur. In other words, while the digital still camera market has now reached maturity, GfK figures suggest that in 2005 as much as 33% of the market for digital still cameras were consumers purchasing their second household digital camera," said Marketing Manager for Canon's Consumer Imaging Products Group, Stuart Poignand.

"In 2006 we expect to see even further growth in the upgrade market. We also expect the accelerated purchasing trend to cascade to other product categories as the competitive price points converge with increased features and benefits on all these digital devices," he added.

Key Findings of the report:
• The Australian digital lifestyle market leapt by more than 30 percent between 2004 to 2005, despite experiencing sizeable reductions in the cost of digital products
• In 2005 consumers bought over two million DVD players, almost two million digital still cameras and almost two million digital media players
• 35% of the year's $3.6 billion was spent on digital lifestyle products in Q4 2005