Executive Summary

In 1992, UK sales of photographic hardware, services and software reached £1.31bn. Included in the sector are cameras, camcorders and films. The largest single market is camcorders accounting for 31% of all sales. In value terms, the camcorder market has more than doubled in size between 1988 and 1992 and has been the one bright spot in an otherwise depressed market.

In 1992, 2.5 million cameras were sold with a retail value of £220m. This represents 17% of total value sales in the sector however, both value and volume sales have fallen in recent years, as the recession has hit discretionary spending hard and tourist spending has fallen. Within the camera sector, 35mm models have increased their share of the market to 83%, largely as a result of the growing popularity of compact cameras. In the camcorder market, 620,000 models were sold in 1992 and 57% of these were based on the 8mm format with VHS-based camcorders losing market share. Hi-band camcorders, offering better picture and sound quality, and the new generation of palmcorders are also becoming increasingly important in the market.

In the film sector, purchases came to £210m in 1992 dominated by colour film sales and 35mm film. The film processing sector was worth £375m, including High Street processing outlets and mail order services.

Hardware markets are dominated by Japanese companies, with Canon and Olympus heading the camera market and Sony and Panasonic the leading suppliers in the camcorder sector. Kodak is the clear leader in the photographic film market. Own-label products are also important while Kodak and Colourcare are the key companies in the processing market. Individual retailers, for example Boots and Dixons are significant distributors of hardware and films while Boots also plays a leading role in film processing.

Camera penetration is high with around 76% of households owning some form of model. In contrast, camcorder ownership is still only around 6%. Given these contrasting circumstances, the camera market will find it hard to increase value sales in the next few years, while the camcorder sector is set to grow steadily throughout the 1990s. Camcorder manufacturers believe that penetration levels could reach 20% of households by the second half of the 1990s. Camera manufacturers will concentrate on improving the specifications of cameras in the medium- and lower-price bands to boost sales.

Key Note is forecasting overall growth in the market of almost 22%, in current prices, between 1992 and 1996, with a forecasted market value of £1.6bn in 1996.

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