Digital Photo Frame sales booming

Approximately 1.7 million digital photo frames were sold in the U.S. in 2006, representing an explosive year-over-year growth rate of more than 400%, according to Parks Associates. The number exceeded Parks Associates’ forecast by 42% and not surprisingly, forecasts have been ramped up – the company’s revised U.S. forecast shows 50% cumulative average growth rate (CAGR) to 2010.

“The most significant factors contributing to this growth are expanded retail availability, decreased price, and consumer interest in new gift ideas,” said Harry Wang, research analyst, Parks Associates. “The digital photo frame market was a Cinderella story for many small vendors during the past holiday season. Many were happily surprised by the strength of consumer demand.”

Parks Associates expects these numbers will attract more retailers and large CE manufacturers, further driving this product category to mainstream status. “Our revised U.S. forecast calls for 50% cumulative average growth rate (CAGR) into 2010,” Wang said.

There is concern, with more than 30 vendors selling online and at brick-and-mortar retailers, this market could become overcrowded. “Some of the smaller players will drop out of the market soon because of resource bottlenecks and margin pressure,” Wang said.

“Manufacturers should take this opportunity to improve their product designs. Learn from Apple – curb your enthusiasm to be the first in the market and go back to the fundamentals in design and functionality.”