Abstract

Clear Product Positioning

Increasingly, consumers prefer to view and share digital images directly, rather than printing them out. There is thus significant latent market demand for devices that can be used for viewing and sharing digital photos, and the need for electronics vendors to develop the right products to meet this need. Some companies with particularly keen market antennae had begun to develop digital photo frames eight years ago. However, the market failed to take off as quickly as had been hoped. One major issue was that the earliest digital photo frames often incorporated a range of other functions - such as Internet access, DVD player function, music, or TV capability - in addition to digital photo viewing. Consumers failed to see the need for these additional multimedia functions; as a result, although the industry reaction to the first digital photo frames was generally positive, sales were generally low. Several companies that had been among the first to introduce digital photo frames - including Sony and Kodak - subsequently withdrew from the market. Recently, however, demand for digital photo frames has started to pick up, while at the same time it has become possible for the manufacturers to produce the devices in a more effective manner. In 2005, Philips launched a new-generation digital photo frame that is simple to use, enabling users to view and share digital images easily and conveniently. This product has been selling very well in the European market, and Philips has raised its sales targets for the device repeatedly. The repositioning of digital photo frames as dedicated devices for viewing and sharing digital photos without extraneous functions has struck a chord with consumers.

Follow International Vendors' Lead

The new wave of market growth in the digital photo frame market, which has been led by the leading international electronics vendors, suggests that the market may be about to become the mainstream trends as vendors start to "cross the chasm". For companies that are hoping to take advantage of this increase in demand for digital photo frames, probably the best strategy is to follow the lead of the leading international vendors, introducing models that have similar specifications to theirs but are priced at a lower level. As far as the display panel is concerned, manufacturers should be thinking in terms of using 6.5-inch TFT-LCD panel with a 720 x RGB - 480 pixel resolution, 7-inch TFT-LCD panel with 800 x RGB - 480 pixel resolution, or 8-inch TFT-LCD panel with a 800 x RGB - 600 pixel resolution. In the value-line segment of the market, new entrants will need to develop models that offer basic functions as low price. The recommended panel specifications here would include 5.6-inch TFT-LCD panel with 960 - 234 dots, 5.6-inch TFT-LCD panel with 320 x RGB - 234 pixels, 7-inch TFT-LCD panel with 480 x RGB - 234 pixels, 8-inch TFT-LCD panel with 640 x RGB - 480 pixels; these are all panel types for which a steady supply of panel can be obtained at a reasonable price.

Appendix

List of Companies