2006: Year of digital product bundling

2006: Year of 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 says although technology standards allowing these home products to communicate are still being developed, consumers are 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 says. "There will be a concentrated effort to bring technology devices out that can talk to each other."

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

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

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

The claim follows the release of the latest Canon Digital Lifestyle 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 A$99 million in Q4 2004, with unit sales reaching 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 A$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 attributes the decline to both product generations reaching saturation point.

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

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

This is lower than the average 20% price drop experienced every 12 months, he says.

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