Digital spend breaks $5b, thanks to LCD and games consoles

By Matthew Henry

SYDNEY: The market for digital devices crashed through the $5 billion barrier for the first time in 2007, thanks largely to gamers and the hundreds of thousands of Australians who bought an LCD TV.

According the latest Canon Digital Lifestyle Index (CDLI), gaming consoles and LCD TVs almost single-handedly drove a $428 million jump in digital device sales for the second half of 2007, compared with the same period a year before.

The report’s authors attributed this 17.4 per cent rise to phenomenal growth in the LCD market and the arrival of next-generation games consoles, such as the PS3, Xbox 360 and Wii.

Total sales value for digital products in 2H 2007 reached a sizable $2.89 billion – the highest half-yearly sales value in the CDLI’s five-year history.

For the full calendar year 2007, digital device sales climbed to a record $5 billion.

Games consoles were singled out in the report as an ‘impressive performer’, with 1.5 million units sold for a total of $484 million annually.

LCD TVs accounted for nearly 30 per cent of all dollars spent on digital goods during the year as consumers snapped up just shy of a million of the flat panel screens.

“As Canon predicted, Australians spent a huge five billion dollars on digital devices last year, with the highest amount of spending occurring around the Christmas period,” said Canon Consumer Imaging Products Group marketing manager, Stuart Poignand.

“The rapid development in digital technology is amazing. New products that do more are arriving faster and faster, they’re getting easier to use and are available at lower and lower prices.

"This is fuelling substantial demand for digital devices from Australian consumers," he said.

However, anecdotal evidence is pointing to a slowing in sales through March after a strong start to 2008, evidence that successive interest rate rises are now taking effect in curbing consumer spending.

But Poignand believes the market will bounce back to post another record year.

“Based on these results we foresee substantial increases year-on-year and look forward to 2008 when we predict Australians will spend over $6 billion based on the yearly increases we have experienced over the last four years.

"We believe spending will continue to increase despite a softening economy across the board,” he said.

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