Abstract

Flood of Latecomers to the Industry Increases Complexity of Industry Development

When there were fewer players in the digital photo frame industry supply chain, its product development, market volume, or growth potential were relatively predictable. As there have been more and more latecomers to the industry, difficulty in gauging the said trends has increased. Latecomers tend to imitate the forerunners so as to quickly tap the industry boom. The imitation instinct serves to explain the heightened activity in the Taiwanese digital photo frame industry supply chain as well as the flood of capital coming from the securities companies. Worthy of note, though, is that imitation in itself does not generate any new information. Rather, imitation merely enhances the effects achieved by the existing information, whether valid or not. Therefore, although the booming digital photo frame market has indeed created for related Taiwanese companies abundant industry knowledge and relatively robust competitive edge in the supply chain, finding a reasonable level of market expansion is critical, so as to ward off a possible market meltdown.

Digital Photo Frames Enter Growth Stage as They Transform from Gifts to Household Decorations

Aiming to effectively stimulate the market demand for digital photo frames in 2007, brand-name vendors and large channel players are engaging in aggressive maneuvers to position digital photo frames as holiday gifts, in the hope that consumers will include digital photo frames on their wish lists for Christmas or New Year. However, positioning digital photo frames as holiday gifts actually barricades their access to the mainstream market by confining their production and sales to a seasonal cycle. Market volume will thus be limited, too. Philips' digital photo frame road map and deployment may provide an answer to the dilemma. The company currently positions digital photo frames as an indispensable household decorative product, providing the means of digital image viewing and sharing in various locations within the home, such as the living room, study, and bedroom. Transformation from a holiday gift to indispensable household item is expected to further boost the digital photo frame market volume, even launching the product into its growth stage. Consequently, Taiwanese makers, which have already obtained a competitive edge in the industry supply chain, will be presented with an opportunity to create for themselves another thriving export business.