Markets recover, markets evolve.(market outlook)

The crash of 2000 resulted in setbacks for every segment of the high-tech industry, including the digital content creation (DCC) market. Corporate cutbacks on equipment upgrades and advertising spending translated to lower demand for content-creation products, both for in-house work, such as desktop publishing, graphics, and video editing, and for projects involving ad agencies and studios.

Yet, as highlighted in the newly released "Digital Content Creation 2003" report from Jon Peddie Research (JPR), several trends are stimulating a recovery. First and foremost, spending has increased on films for digital effects, compositing, editing, color correction, and the like. Video is seeing strong growth in consumer and professional segments. Also leading the way is a growing demand for digital content for advertising, as that industry resumes its pre-2000 growth rate. In all the DCC markets, the actual unit shipments of digital content creation software are increasing at a compound annual growth rate of 15.8 percent. On the downside, average selling prices are decreasing, so revenues for DCC soft ware are growing at a much slower pace than unit sales.

Moving to hardware, according to the latest MarketWatch report from JPR, the PC graphics market experienced better than seasonal growth in the third quarter of 2003, when some 56 million graphics devices shipped. However, the PC ...