Consumer Electronics

China's digital photo frame market is still in its initial stages, even though the first trial products were launched seven years ago. We project 2008 as a "breakout" year, with shipments reaching 500 thousand. Frame size in the 8"-10" range will become more available, but smaller frame sizes will still be the focus.

2007 in Review

In 2007, vendors' value/production chain was more complete, setting the stage for better scale economies, lower prices, and higher product adoption. The Chinese consumers' product awareness is low, but slowly improving. Digital photo frame shipments reached 175 thousand in 2007.

Source: CCID Consulting, April 2008

Commercial enterprises drive product purchases.

Enterprise purchases accounts for 80% of the digital photo frame market. Government, financial services, and petroleum are the most active buyers. However, for longer-term growth and development of the digital photo frame market, the Chinese consumer must be targeted. The biggest obstacle: prices and awareness.

Prices are too high for the Chinese consumer.

There are over 50 vendors in China. The major ones offer higher quality digital screens, with resolutions of 800 X 480; however, the prices are too high to gain traction. These products are targeted to the high-end consumer. These vendors, rather, focus more on manufacturing for the overseas markets.

Lower priced models are available by smaller vendors, but image definition is low with resolutions of 480 X 234. While prices may be lower, product performance is lower still. The Chinese consumer considers the digital photo frame as a single function product. As such, prices would need to be even lower to gain wider product acceptance.

Vendor competition: Aigo in the lead.

In China, the top three vendors Aigo, Samsung and ViewSonic dominate with almost 80% combined market share. However, CCID Consulting expects these vendor positions to be tenuous, as large commercial enterprise purchases significantly drive shipment share.

Aigo's market leadership was due, in large part, by China Petrochemical's large orders. Such support will help the company develop its popularity and brand initially.

Samsung competes with their advanced technology in image definition and color; and product support.

ViewSonic leverages its cost advantage in raw materials, its experience in displays, and its image rendering of pleasing and natural skin tones. ViewSonic has built a reputable brand in China.

Source: CCID Consulting, April 2008

CCID Consulting expects to see Samsung, ViewSonic, and Philips to aggressively launch many new products while building and utilizing their channels for digital photo frames.

In order for sustainable, consumer-based growth, vendors will need to further focus their efforts on increasing Chinese consumer awareness.

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Unless otherwise specified, all information provided is sourced from CCID Consulting.

Ó 2008 CCID Consulting Co., Ltd.