GfK sees opportunities in digital product bundling

An industry analyst has claimed a maturing digital lifestyle market will result in new product bundling next year.

Research project manager at GfK, Angus Macaskill, said although technology standards allowing these home products to communicate were still developing, consumers were starting to look towards linking the devices.

"We are on the crest of a wave; in the next 12 months people will be buying products to link them together," he said. "There will be a concentrated effort to bring technology devices out that can talk to each other."

As an example, Macaskill pointed to US-based vendor, Hip-E, which had introduced a new product bundle incorporating a PC system with changeable covers, audio player, phone and beat box.

This trend was comparative to the introduction of local area networking technology into the home, he said.

"It hasn't started yet in Australia, but we will eventually buy them [digital lifestyle goods] that way," he said.

The claim follows the release of the latest Canon Lifestyle Digital Index (CDLI) by GfK.

According to the report, digital still cameras and audio devices were the top two performing product sets for retailers in the last quarter of 2004. Sales of audio devices reached $99 million in Q4 2004, with unit sales reacing 297,315. This is the first time audio products have been represented in the report.

Digital still cameras continued to be the top-selling digital lifestyle category, with 520,000 units sold in Q4. Total sales were worth $222 million.

However, several products recorded a drop in sales. Game consoles took a dive in Q4 compared with the same period in 2003 - total unit sales fell by 76,000 to 340,000. Digital camcorder sales also fell in the same period from 72,000 to 61,048. Macaskill attributed the decline to both product generations reaching saturation point.

As a whole, consumers spent $654 million in Q4, 2004, and a total of $1.1 billion on digital lifestyle products in the last half of the year.

Prices continued to tumble but at a slower rate than previous years, Macaskill said. The report found average prices for all product categories except digital TVs had dropped by between 9.3 and 19.2 per cent in the last quarter of 2004 compared to the previous year.

This was lower than the average 20 per cent price drop experienced every 12 months, he said.

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