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CEA: DVD Renaissance Looming

15 Aug, 2006 By: Erik Gruenwedel

Spurred by sales of DVD recorders and the emergence of high-definition disc, the DVD market is poised for resurgence over the next several years, according to a mid-year report by the Consumer Electronics Association.

CEA research figures indicated DVD recorder prices have declined significantly — the average unit price is less than $100 — with shipments expected to exceed 7 million units in 2006. While product delays of HD DVD and Blu-ray Disc have reduced year-end sales projections, shipments of home component models should reach more than one million units in 2007.

Strong sales of display technologies such as high-definition televisions are expected to top $22 billion this year compared to $19 billion last year.

“Replacement and upgrade purchases continue to drive the display market while prices continue to fall,” said CEA director of industry analysis Sean Wargo. “As consumers prepare for the transition to digital television, we will see more of the shipment volumes move to digital displays as analog sets' days are increasingly numbered.”

The much-anticipated release of Sony's PlayStation 3, Nintendo's Wii and maturation of Microsoft's Xbox 360 should help total video gaming shipments, including both hardware and software, reach $12.5 billion in 2006. Growth will continue through 2007 with total sales expected to exceed 2006 figures by 16%.

"The fourth quarter of this year is when things really heat up in the gaming market, with continued growth expected through 2007, reaching $15 billion," Wargo said.

Fueled by rising shipments of portable navigation products, 2006 revenues in the mobile video and navigation category are expected to top $2.3 billion – 21% higher than CEA previously forecasted. Navigation products are responsible for more than half of that total growth.

Overall consumer electronics factory-to-dealer sales should reach $140 billion in 2006, an 8% growth over 2005. According to CEA Market Research, final year-end totals reached $128 billion in 2005, making 11% growth over 2004.

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