J.D. Power and Associates Press Release

Brand Loyalty among Digital Camera Buyers Falls Significantly as Increasing Choices Diminish Product Differentiation - Nikon, Kodak, Canon and Olympus Lead the Industry in Satisfying Digital Camera Owners

WESTLAKE VILLAGE, Calif.: 24 August 2006 — As increasing digital camera model offerings challenge perceived product differentiation among consumers, only 26 percent of digital camera buyers say they would purchase the same camera brand in the future—down from 35 percent in 2005, according to the J.D. Power and Associates 2006 Digital Camera Satisfaction StudySM released today. The study measures customer satisfaction among buyers of digital cameras in four price segments: $199 or less, $200-$399, $400-$599 and $600 or more.  Overall customer satisfaction has declined to 805 points (on a 1,000-point scale) in 2006—down from 816 points in 2005. Satisfaction is down most significantly among entry-level camera buyers ($199 or less), falling 27 index points from 2005, while satisfaction essentially remains flat compared to 2005 in the $200-$399 and $400-$599 segments.  Satisfaction among buyers in the high-end segment ($600 or more) has increased 12 index points versus 2005.

“While price and picture quality remain strong purchase motivators, competitive parity is making product features, functions and brand reputation less important to consumers,” said Steve Kirkeby, executive director of telecommunications and technology research at J.D. Power and Associates. “In a market where there is increasing product parity, listening and effectively responding to the voice of the customer is crucial to manufacturers in providing products that will improve satisfaction and solidify loyalty. Aggressive pricing, coupled with packages containing lenses and accessories, Web photo printing and sharing—if not photo printers themselves—are quickly becoming the competitive norm.”

Consumers are increasingly researching product information and third-party, independent reviews prior to purchasing their camera as a means of finding the one that meets their specific needs. Sixty-three percent of consumers utilize the Internet as a source of information—nearly twice the incidence of using information found in consumer product publications (33%). Recommendations from family and friends (33%) and the salesperson’s opinion (27%) are nearly on equal footing as resources for product information.

“Camera buyers display a strong need for information prior to their purchase, and the more money they intend to spend, the more research they do,” said Kirkeby. “Product similarities and complexities are driving consumers to seek information from multiple sources. Ninety-one percent of all digital camera buyers report doing some type of research prior to purchasing a new camera.”

The study measures six factors within each price-based camera segment to determine overall satisfaction: ease of use, connectivity, functionality, cost, picture quality and appearance.

Nikon ranks highest in the $199 or less price segment with high ratings from customers in picture quality, appearance and connectivity. Sony closely follows Nikon in the segment and receives top ratings from customers in functionality.

Within the $200-$399 segment, in which the majority of cameras are purchased, Kodak ranks highest for a third consecutive year. Kodak receives top ratings from customers in four of the six factors that determine overall satisfaction: cost, connectivity, ease of use and picture quality. Sony follows Kodak in the rankings.

Canon ranks highest in the $400-$599 segment and receives highest ratings in the areas of functionality, picture quality and cost. Sony follows Canon in the segment and performs particularly well in ease of use, appearance and connectivity.

In the high-end $600 or more price segment, Olympus ranks highest and has the greatest improvement from 2005 in the study (an increase of 63 index points), with considerable gains in the quality and functionality factors. Nikon follows Olympus in the segment rankings.

The study also reviews gender differences, finding that women are most likely to purchase a camera from the $199 or less segment, while the majority of men purchase a camera in the $200-$399 segment. In general, men take nearly one and one-third times as many pictures per month than women, by an average of 109 to 82.

The 2006 Digital Camera Satisfaction Study is based on responses from more than 5,800 consumers who purchased or received a digital camera between January 2006 and July 2006. For more information on customer satisfaction performance of digital camera brands, visit the J.D. Power Consumer Center at www.jdpower.com.

About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction.  The firm’s quality and satisfaction measurements are based on responses from millions of consumers annually.  J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor’s, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 290 offices in 38 countries. Sales in 2005 were $6.0 billion. Additional information is available at http://www.mcgraw-hill.com.