Action Camera Market
Adventure tourism is among the most growing activities in the world today. The growth is as a result of more disposable income, use on leisure, and need for a more healthy and active lifestyle. As a consequence, the demand for action cameras has increased in the camera industry so that users can capture their memorable moments in a quality and high definition way. Action cameras are in most cases linked to outdoor sports activities and extreme sports. They are also used in different areas such as studying wildlife and production in television. In 2014, the market for action camera was estimated to be $3.2 billion (Seitz, 2015). Personal use of action cameras in 2015 was approximately 86 percent while that of professional purposes was 14 percent (Seitz, 2015). In 2018, the global market share for action cameras was approximately $3.3 billion.
Global market for action cameras is characterized by many players. Majority of the dominant players in the market use new product development as a major strategy in the industry. As a result of increased growth potential, a number of players in the industry are now offering cloud storage in order to capitalize on the existing opportunities in the industry (Seitz, 2015). The main players in the industry are among others GoPro Inc., Nikon, and Sony. The competition in the action camera industry is high and in order to remain competitive and increase demand, players in the industry are effectively developing products that cost consumers less (Seitz, 2015). According to the law of demand, a reduction in price on the vertical axis leads to increase in the volume of product demanded on the horizontal axis (Tucker, 2019).
Delegate your assignment to our experts and they will do the rest.
In addition, sales channels such as online and retail are effective in the industry hence used by the key players in the industry. The potential end users of action cameras are extreme sports enthusiasts, athletes, travelers, media companies, movie makers, and young people (millenials). Advancements in smartphones’ cameras could have an effect on demand of the product. The smartphone industry has made major advancements in devices’ cameras in order to meet consumer needs of quality and satisfaction. However, adding more value such as cloud based storage among other technological advancements on action cameras has maintained and increased the product’s demand.
Market Segments
Market segmentation was done based on common characteristics of the potential clients. Market segments comprise of clients who respond in the same way to marketing techniques and share common characteristics such as interests and requirements (Tucker, 2019).
| End Users Segments | Drivers for Demand | Volume Consumed |
| Personal | Athletes, extreme/action sports enthusiasts, travelers, youths, and families. Increased number of sports, exposure, and increased use of social media. The number of enthusiasts for extreme sports such as skating, surfing, and skydiving among others has increased ( Action Sports ). These sports have propelled the demand for action cameras. In addition, application of technology that has enhanced lens and high resolution also contributes to demand in this segment. Recreation activities is the fastest increasing end user segment. The demand in this segment is driven by increased interests in fitness and many other adventure activities among young people especially the millenials (Technavio, 2017). | Thousand Units |
| Professional | Moviemakers/documentaries, TV producers, and wildlife research. The demand in this segment is influenced by factors such as quality. | Thousand Units |
Analysis of Market Potential
The increasing demand in the industry allows a substantial investment. Increasing market size of action camera over the years is an indicator of potential growth in the industry. In 2018 for example, the market size for action camera was around $3.3 billion and it is forecasted that by 2023, the revenue in the market is expected to achieve a CAGR of approximately 16.7% (Technavio, 2017). The increasing number of extreme sports holidaying culture, seasonal leagues, and events in music are among the main factors that are causing an increased demand for the product throughout the world. Additionally, action cameras are becoming popular in professional activities and recreational activities hence an increase in demand. Furthermore, technological advancements in client electronics field such as incorporation of AI technology in cameras is facilitating growth in the industry. It is anticipated that by 2021, the industry will grow with a CAGR of fifteen percent (Technavio, 2017). In addition, features such as the cameras’ portability and being versatile are increasing the product’s market share. Other features such as add-ons that enable Wi-Fi among many other functions that enable connection with other devices appeal to consumers hence make them popular throughout the globe.
The market segments with the greatest opportunities are sports and recreation. Recreation activities is the fastest growing market segment in action camera industry. Recreation activities such as scuba diving for example have started taking a professional direction and are drivers for action cameras demand. Approximately one million certifications for scuba diving are given every year. Growth in such recreation activities will lead to increased demand action cameras. Interest in adventure and fitness has increased especially among young people in developed countries presents a high number of opportunities. Popularity of extreme/action sports over the years. Every year, there are more than 300 extreme sports events throughout the globe. Skateboarding for example has more than 12 million participants in the United States alone ( Action Sports ). Snowboarding has attracted approximately 2.5 million individuals. These figures provide insights into the rise of extreme/action sports hence potential market for action camera.
Drivers of Demand
There are numerous factors that drive the growth of global action cameras. Some of these factors include the “increasing use of smart gadgets, booming consumer electronics industry, and the growing trend of sharing content on social networking websites” (Market Watch, 2019). The advance in technology has led to continuous advancement in the consumer electronics industry. When compared to the previous generation, the advance has led to the miniaturization of various devices (Market Watch, 2019). More to this is that action camera has evolved in many aspects, including product size, quality, and efficiency. The increase in quality due to advance in technology is driving the growth of global action cameras. This is because consumers usually expect to be amazed by the quality of imaging software.
Another factor driving the growth of global action cameras is the increase in distribution channels, especially online channels (Grand View Research, 2019). Retail channels hold the largest share of the action camera market. The large share can be attributed to the fact that consumer usually prefers checking the features of the products in person. However, the rise in e-commerce, as well as the growing popularity of online purchase, is likely to increase online channels (Grand View Research, 2019). Open channels are likely to have a positive influence over the forecast timespan. By demonstrating a state-of-the-art product, online retailers can influence the buying decision of customers, especially for consumers that have never engaged in e-commerce (Grand View Research, 2019). More to this, online discounts and offers, especially when it comes to festive seasons, are likely to drive high demand for online sales. In addition, given the growing domain of e-commerce in the consumer electronics industry, e-commerce is likely to create robust growth opportunities in the forecast period. This will, in turn, the growth of global action cameras.
Sports segments account for a greater market share in the lens industry (Grand View Research, 2019). The great share can be attributed to a number of factors. One of these factors is the increase in the number of adventure sports. The increase is further propelling the market demand. Another factor that drives the growth of global action cameras is the use of digital technology with advanced lens and resolution. This is propelling the market demand as it contributes significantly to capturing excellent quality images and videos in action (Grand View Research, 2019). More to this is that, across the world, the number of sports events are increasing, increasing the demand for action cameras. This significantly contributes to the growth of the sports segment. This, in turn, drives the growth of global action cameras.
Macroeconomic Factors
I anticipate the number of sporting events and activities to increase. I also predict that the use of digital technology with advanced lens and revolution will contribute significantly in capturing excellent quality images and videos in action. Other predictions include the increase in distribution channels, both retail stores and online stores, an increase in the use of smart gadgets and growth in the trends of sharing content on social networking websites. However, there are a number of macroeconomic factors that can cause drivers to change. These macroeconomic factors include political factors, economic factors, social factors and technological factors.
With regard to political factors, there are a number of political factors that can cause the drivers to change. Some of these factors include trade regulations and tariffs related to consumer goods, taxation, bureaucracy and interference in the supply of action cameras by government, and pricing regulations. With regard to economic factors, there are a number of economic factors that can cause the drivers to change. Some of the factors include economic growth rate, interest rates, inflation rate, labor costs and productivity in the economy, and skill level of workforce in the lens industry.
Society’s culture and way of doing things, which includes shared beliefs and attitudes of people, play a significant role in how marketers of action cameras will understand the customers of a given market. For this reason, some social factors can cause drivers to change. Some of the factors include demographics and skill level of population, leisure interests, culture, and education level and standard. With regard to technology, there are a number of technological factors that can cause drivers to change. Some of these technological factors include the rate of technological diffusion and recent technological developments.
Sensitivity Analysis
The most critical assumptions that were made when forecasting the demand for action cameras include:
It was assumed that the use of smart gadgets would increase,
It was assumed that the consumer electronics industry would thrive,
It was assumed that the number of sporting events and activities would increase, and
It was assumed the use of digital technology with advanced lens and resolutions would contribute to capturing excellent quality images and videos action.
Based on these assumptions, it was forecasted that the demand for action cameras would increase in the future. However, the assumptions made above must be true for the demand forecasts to be true.
References
Action Sports. (n.d). The Action Sports Market: Active Network Rewards. http://www.activenetworkrewards.com/Assets/AMG 2009/Action Sports.pdf
Grand View Research. (2019). Action camera market size, share & trend analysis. [Online]. Retrieved March 29, 2020, from https://www.grandviewresearch.com/industry-analysis/action-camera-market
Market Watch. (2019). Action camera market growth 2019: Global industry overview, business strategy, industry size, share, and forecast to 2023. [Online]. Retrieved March 29, 2020, from https://www.marketwatch.com/press-release/action-camera-market-growth-2019-global-industry-overview-business-strategy-industry-size-share-and-forecast-to-2023-2019-11-14
Seitz, P. (2015). Action Camera Market to See Growth through 2019. Investor's Business Daily Technology. https://www.investors.com/news/technology/gopro- tobenefit-from-action-camera-market-growth-futuresource/
Technavio. (2017). Global Action Camera Market 2017-2021. https://new.technavio.com/report/global-actioncameramarket?utm_source=t4&utm_medium=bw&utm_campaign=businesswire
Tucker, I. B. (2019). Economics for today (10th ed.). Boston, MA: Cengage. ISBN: 978-1 –337613040
