Consumer Electronics Household Penetration is Strong.

The typical U.S. household is brimming with consumer electronics. According to a new NPD report, Household Penetration Study: Ownership Landscape 2008, on average there are 21 CE devices per U.S. household. Home DVD players, desktop computers, and digital cameras are among the highest penetrated items, but there are still opportunities within mature categories even when their overall growth has stalled.

DVD players can be found in 85 percent of U.S. homes, but consumers are demonstrating interest in investing in players that take better advantage of their high-definition televisions, including up-converting DVD players and Blu-ray Disc players. Even though overall unit sales of home DVD players declined 25 percent in the first half of 2008, sales of up-converting home DVD players rose 14 percent according to NPD’s retail tracking service. Much of this opportunity lies in replacement devices. According to NPD’s consumer tracking service, between June 2007 and May 2008, 50 percent of consumers reported replacing their DVD player.

While the digital camera market is also reaching maturity, with about 76 percent penetration, a lot of that is concentrated among point-and-shoot owners (74 percent). The DSLR market is still growing and it’s not just limited to consumers with the highest incomes. While 17 percent of households with incomes over $100,000 report having a DLSR in their home, 8 percent of households with incomes under $100,000 also have a DSLR.

Despite desktop computers reaching a high level of penetration, the PC category still has drive. Notebook computers have less than a 50 percent penetration rate, and according to NPD’s consumer tracking service there is only a 53 percent incidence of first-time buyers, and 21 percent of repeat buyers, leaving plenty of room for growth and opportunity to turn what was once a family/household device into a more personal electronics item.

“Retail stores are stocked with many products that have high household penetration,” said Ross Rubin, director of industry analysis for NPD. “However, new technologies continue to refresh mature markets and spawn new categories. More capacity, higher resolution, and increasing broadband connectivity are driving ascending categories.”

Some of those ascending categories are GPS and digital picture frames. GPS household penetration is only at 19 percent, with 81 percent of purchases being made by first-time buyers. Digital picture frames is another segment with big growth opportunity with only 13 percent of consumers reporting that they own a digital picture frame. Newer technology camcorders have a low penetration (26 percent), a high incidence of first-time buyers (68 percent), and a push to elevate the market even more with a growing phenomenon, flash-based camcorders. The flash segment of this market is taking off, with 150 percent growth for the first half of 2008 and moving from 13 percent of the camcorder market in the first half of 2007 to 42 percent in 2008, according to NPD’s retail tracking service.

“Driving growth in mature categories can come from multiple sources,” said Rubin, “In the DVD player market, for example, consumers are moving toward technologies such as up-conversion and Blu-ray that take better advantage of HDTVs. In the PC market, though, the greater mobility enabled by more affordable notebook PCs is fueling growth that’s coming at the expense of desktops.”

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