Digital camcorders are the fastest growing segment of the home movie market thanks to falling prices, high picture quality and the ability to edit home movies on a personal computer, according to new research.

Strategy Analytics, the technology marketing consultancy, said sales of digital video cassette (DVC) camcorders in Europe, Japan and the United States would hit 2 million units worth $3.1 billion in 1998 compared to 1.4 million units worth $2.7 billion in 1997.It forecast that DVC will take 50 percent of global sales by 2002 and 73 percent by 2005.

It said 19 percent of camcorders sold in 1997 used the DVC system, which offers consumers the benefit of home video photography with near-professional quality images.

"It also allows users to edit their home videos in digital format on the home PC, bringing the age of PC/video convergence a step nearer to the mass market," Strategy Analytics said.

The average retail price of a DVC camcorder is expected to fall 17 percent in 1998 to around $1,600. The price in 2001 will be about $1,000, the research forecast, bringing the machines into the mainstream market.

"Digital photography is more likely to reach the average consumer through the digital camcorder than the digital still camera," says David Mercer, Emerging Consumer Technologies Analyst at Strategy Analytics.