Taking photographs, typing documents and playing with dolls aren't activities that have a lot in common. But they each took a new twist in the last year with the help of computers.
In the consumer software market, the hottest new products aren't the ones that change people's lives. They're the ones that enhance what people already do every day.
That's why products that turn computers into darkrooms, spoken words into written text and girls into Barbie fashion designers propelled the fastest-growing categories of consumer software in '97. U.S. retail sales of all consumer software rose 13.8% in the first nine months of this year to $2.7 billion, according to research firm PC Data Inc. in Reston, Va.
But sales of photo-editing software jumped 320% to $13 million in the same period, says PC Data. And revenue from voice-recognition software grew to $18 million from $675,000 during the first nine months of '97 - an astounding 2,667% leap.
Furthermore, Mattel Inc.'s Barbie Fashion Designer software - the dominant entry in the girls' software category - sold more than a million units worldwide in the past year. That's compared to the 30,000 to 40,000 units sold each year by the average software product, says Ann Stephens, PC Data's president.
In the case of photo-editing and voice-recognition software, the sudden boom can be attributed to the fact that technology finally caught up to needs, Stephens says. As for girls' software, what was lacking wasn't so much the technology as the ideas of game makers.
The growth of the Internet, increased hype over digital cameras and aggressive marketing are driving the growth of photo- editing software, says Suzanne Snygg, an analyst with market researcher Dataquest Corp. in San Jose, Calif. Snygg predicts revenue will grow 65% to create a $224 million market for the software by 2001.
Photo- editing products enable customers to touch up snapshots on their computers. They also allow users to create online photo albums and e-mail pictures to friends.
''The excitement about this category is that photography appeals to most everybody at some level. . . . It's a huge market,'' Snygg said.
But the software still faces some barriers. Digital cameras - which take pictures that can be directly loaded onto computers - still need to improve, Snygg says.
For now, she says, a better alternative is to import regular photographs into computers using scanners.
Leading the photography category are PhotoSuite from MGI Software Corp. of Canada, with a 21% market share, and Microsoft Corp.'s Picture It, with a 19% share, according to PC Data.
When searching for new software categories, ''We look at activities that we think are already popular, whether they are on the PC or not, and think about how we can enhance them with technology,'' said Bill Demas, group product manager for Microsoft's desktop applications division.
In researching the market for photo-editing software, for instance, Microsoft found that 82% of households have cameras and about 70 billion photographs are taken each year. So far, those figures are proving to be an accurate indicator of revenue potential: Picture It sales have grown at least 200% in the past year, Demas says.
Voice-recognition software, which translates spoken words into written text, also is taking off. It was the introduction of ''natural language'' software earlier this year that really caught consumers' interest, Stephens says. Previous entries recognized only ''discrete speech,'' dictated with pauses between each word.
Discrete-speech products from International Business Machines Corp. and Belgium's Lernout & Hauspie Speech Products led the category through September '97. IBM's Simply Speaking held 33% of the market, and L&H's Kurzweil Voicepad was second with 23%. But those figures likely will change with natural-language products from IBM and others reaching stores in the fourth quarter.
Software for girls is another category emerging this year. Until last year, boys accounted for about 85% of the market for children's software games, Stephens says. That was before the launch of Mattel's Barbie software in November '96. ''It was a category looking for software to fill it,'' said Stephens.
In its first month of sales, Mattel's Fashion Designer software outsold all other software products - including Microsoft's Windows 95, according to PC Data. It also accounted for half of all children's software games sold in retail channels over the last 12 months.
The software enables girls to create clothes for their Barbie dolls and even print them out on special ''cloth'' that can be assembled into wearable clothes, said Pamela Kelly, Mattel's vice president of worldwide marketing.
Mattel's premier new product for this holiday season is the Barbie Magic Hair Styler, which enables girls to create hair and make-up styles. And it also has introduced a pre-teen equivalent of the Fashion Designer software based on the movie and TV show ''Clueless.''
''The myth before we launched our first product was that girls didn't use technology or computers,'' she said. ''Our view was that girls are not afraid of technology. You just have to give them something that they want to play with.''
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Copyright (c) 1997 Investors Business Daily, All rights reserved.
Investor's Business Daily - Computers & Technology (12/17/97)
With Barbie's Help, Consumer Software Sales Bust Out
By Lisa Wirthman
Transmitted: 12/16/97 20:34 (p3aesc1f) |
