Picture This

Monday June 2, 2008

– Stewart Wolpin

Every once in a while the tech world gets jolted by a simple, low-tech product that fulfills some latent desire. The compact audio cassette and the VCR are good examples.

This latest low tech surprise is the digital picture frame. They’re more 19-inch TV drab than flat panel cool. Many are cobbled together mostly in China using spare, old or even used LCD panels, off-the-shelf components and user interface programming your 12-year-old could have written. Despite their lack of “it product” status, they are flying off the shelves.

DTC estimates that the total market for digital picture frames has more than doubled in each of the two years the frames have been available, expanding from about 11 million units worldwide in 2007 to an estimated 24 million units in 2008.

As with any new product, new brands have bobbed to the surface. The most prominent is Pandigital, which DTC estimates will be the top seller of digital picture frames in 2008.

But as the digital picture frame market develops, older, more well-known brands will jump to the fore. The most well-known brand in the photo field is, of course, Kodak, which DTC estimates has already moved into the number two slot.

Kodak’s share is bound to grow thanks to the industry’s first bit of sophisticated symbiosis. Earlier this month, Kodak started selling its frames with a free offer to pre-load up to 100 pictures a consumer has uploaded to his Kodak Gallery online photo storage account. This service eliminates the most vexing aspect of digital picture frame functionality, loading in pictures. This is especially critical since the products aren’t designed, or marketed, to appeal to tech enthusiasts.

As the digital picture frame market grows – DTC estimates that unit shipments will reach about 43 million by 2010 – competition will push frame makers to improve their products, add features such as video capabilities (now available on about 13 percent of models), and simplify the user experience.

We also expect the entrance of additional manufacturers into the category, especially other digital camera makers. Currently, Kodak is the only digital camera maker among the top 10 digital picture frame market share leaders. We also expect that once Kodak’s picture frame/Kodak Gallery gambit pays off with increased market share, other frame makers will seek partnerships with unaligned online photo sites.

Digital picture frames may not be as fashionable as flat panel HDTVs, but they will soon be more ubiquitous.