Cost Per Megabyte Of Memory Cards Falls 80% In Two Years
4th April, 2007 – The cost per megabyte of a memory card has fallen from 15p to just 3p since 2005, reports leading market research firm GfK today. The continued growth of online purchasing has enabled the market to achieve strong unit sales. However at the same time, increasing reductions in price have turned the product into a commodity which has meant the margin being achieved through the sales of memory cards has been vastly cut.
The average price of a memory card had changed little since their introduction in 1996, staying at around £31. However, this has fallen over the last 6 months with the average price in February 2007 being just £25. Consumers can now purchase a 2GB Secure Digital card for as little as £4.88, as the market becomes increasingly competitive, and consumer looks to web sites to purchase these cards.
As prices have fallen so sales have grown. In 2006, a total of 8.4m units were sold, this represents a growth of 20% compared to 2005. The market is worth £244.5m to retailers. But falling prices mean the memory card market is now following a similar trend to digital cameras with the market now declining in value terms. November 2006 saw the first ever decline in value, down just 0.1%, but in February it was down 14% year-on-year.
The most popular capacity is now 1GB which accounted for 42% of the market by volume in February 2007. The higher capacities will no doubt continue to increase in popularity as the memory card market evolves, especially with the introduction of SDHC (Secure Digital High Capacity) and other new technologies. The smaller card formats have also increased in popularity now that many mobile phones require a memory card.
Susie Whales, Account Manager in GfK’s Photo Division said: “Big price drops mean that consumers are now getting a lot more memory for their money. If prices fall further it will be interesting to see if consumers start buying memory cards to use them like a traditional film, leaving photos stored on one card and buying a new card for a different set.”