Damn The Economy - Aussies Still Spending Up Big

lcd shopping.jpgThe results of Canon's Digital Lifestyle Index were released today, and despite all the recent economic doom and gloom, the situation doesn't look too bad for consumer tech companies in Australia. In the first half of this year, we Aussies spent a total of $2.424 billion on gadgets, which is a 12.1% increase on the same period in 2007.

More and more games consoles, digital music players, digital cameras and multifunction devices are being sold than ever before, but at the same time, DVD players and single-function inkjet printers seem to be dying a painful death, mostly due to market saturation.

Flat-panel TVs are the biggest earners, thanks to dropping prices and big events like the Olympics. LCD accounts for more revenue than plasma (not really a big surprise there) and digital cameras are actually worth a crapload of money each year, considering their low cost relative to TVs.

The full press release is below the fold. It's fascinating reading if you've got a few minutes to spare:

Australians continue to spend big on digital technology, with record consumption in 1H 2008

Sydney, 8 October, 2008 - Australian consumers' appetite for digital devices shows no signs of waning. The latest Canon Digital Lifestyle Index [1](CDLI) reveals that between January-June of this year, Australians spent a whopping $2.424B on digital technologies - the highest figure ever for this period.

These figures are among the findings from the latest CDLI and illustrate continued growth in digital technology categories and the importance of digital technology in Australian consumers' lives. The CDLI is independent research commissioned by Canon and compiled by GfK using information on sales figures (units and dollar value) provided by GfK's retail audit panel.

"The Australian technology industry is still expanding, experiencing higher sales growth than the retail industry sector as a whole," said Darren Ryan, Marketing Manager for Canon's Consumer Imaging Products Group. "I believe the trend can be attributed to the importance of digital technology in our lives - there's growing need for consumers to have the latest technology and it's now more accessible than ever."

The growth from the latest CDLI report was even higher than the corresponding period in 2007, with total sales values for products covered by the CDLI increasing by 12.1%. At this rate and based on second-half trends that take into account the Christmas period, Canon foresees a record spend of 5.5 to 6 billion dollars by the end of 2008.

Product categories showing unit sales growth in the latest report include digital media players, game consoles, digital still cameras and multi-function devices. The biggest earners continue to be flat panel televisions which in the first half of this year experienced a large increase in the lead up to the Beijing Olympics. This growth is expected to remain strong, with flat panel televisions continuing to dominate revenue generated by other CDLI categories not only because of the volume sold, but also because of their relatively high average selling price when compared to other CDLI categories.

Average selling prices fell in 10 of the 11 product categories covered by the CDLI (by around 11% on average from Q2 in 2007 to the same period in 2008). The significant price reductions help keep sales buoyant, with products previously unattainable now becoming increasingly accessible. "In digital imaging, increased affordability means that consumers have access to technology that was previously out of reach, which is opening up a whole new world of creative possibilities for them," said Ryan. "Australian's are renowned early adopters of technology and the CDLI reflects the unprecedented importance of digital imaging in peoples' lives".

The latest CDLI also reveals categories in decline, including DVD players with their already high household penetration rate, and single-function inkjet printers in the face of high multi-function device growth. The digital video camera category remains relatively stable in terms of unit growth.

Interestingly, the products that experienced large price reductions such as flat panel televisions, digital still cameras, and digital media players accounted for the majority of the 1H 2008 sales. For example, as average Plasma TV prices fell by 26% (down $668 to $1,871) unit sales increased by 38%. Unit sales of digital still cameras increased by 27% (from 1H 2007 to 1H 2008) as prices reduced by 23% (down $85 to $279).

Highlights

· Product categories with the highest consumer spend are;

o LCD televisions ($888million of total CDLI revenues)

o Plasma televisions ($461m)

o Digital still cameras ($276m)

o Game consoles ($224m)

o Digital media players ($204m)

· Prices of products continue to drop in nearly all CDLI categories.

o Plasma TVs have seen the most significant absolute price decline, experiencing a year-on-year reduction of $668 (26.3%).

· When comparing total unit sales to total sales growth, the following is evident:

o The categories that saw both a unit sales and sales value increase include, game consoles, digital media players, and LCD and Plasma televisions.

o Categories that experienced increased unit sales but decreased sales value include digital still cameras, multifunction printers, and DVD recorders.

· Total sales for the products covered by the CDLI increased by $262 million (12.1%) when compared to 1H 2007, outperforming the year-on-year growth of 9.4% in the previous year (from 1H 2006 to 1H 2007).

-ENDS-

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