Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.
After studying a multitude of different data findings from our recently released global consumer electronics usage survey of 19 consumer electronic devices, Accenture asked a simple question: If we had to identify three of the most promising market opportunities for selling consumer electronics products and services based on these findings, what would they be?
Three rose to the top of the list: TV applications for PCs, tablets and smart¬phones; the fertile consumer markets in emerging countries; and the consumer electronics buying behavior of the younger generation.
Market opportunity No. 1: TV applications for PCs, tablets and smartphones
Accenture’s survey of more than 10,000 global consumers found that the battle for consumers’ eyeballs and time is intensifying among TV viewers. Viewership continues to rise, however the impact on the television screen in the home is shifting. For example, in China, France, India, Japan and the United States the percentage of consumers watching broadcast or cable TV shows, movies or videos on a TV screen in a typical week plummeted from 71%in 2009, to 48% in 2011, as consumers moved some of their viewership to PCs, tablets and smartphones. These trends are reflected in consumers’ TV purchase plans. During the next 12 months, the percentage of survey respondents intending to buy a TV fell to 32% this year, down from 35% in 2010.
According to our research, a majority (56%) of respondents are changing the choices they make and how they behave. The most frequently cited change relates to entertainment, with 32%indicating they had stopped or almost stopped renting or buying DVDs.
Given this situation, consumer electronics companies should explore more opportunities with other companies participating in the information application market (for news, sports, weather); networking applications (social/professional networks); and entertainment applications (such as music, single or group games and videos). Accenture’s consumer electronics survey found these to be the most widely used applications that will continue to be for the next few years.
The consumer electronics market is no longer about just manufacturing a product and selling it. It’s more about competing in a more extensive and integrated ecosystem. Consumer electronics companies are being heavily impacted by a new business model called “super¬stacks.” Accenture defines a superstack as a more extensive and cohesive integration of operating systems, semi-conductor chips, devices, applications and end-user services than the industry has traditionally achieved. The primary driver of superstacks will be the mobility market, particularly in the smartphone arena where superstack-based products have already been made commercially available.
Market opportunity No. 2: Consumer markets in emerging countries
It’s not a secret that emerging countries offer many growth opportunities for businesses in a wide range of industries. In the consumer electronics industry this is especially true based on our consumer electronics research findings. Emergingmarkets show a continued and exceptional thirst for the latest technologies such as tablet PCs and smartphones. They lead in ownership and purchase intent growth for many newer types of consumer electronics devices compared with more mature countries such as France, Germany, Japan and the United States. With the exception of India, consumers in urban areas of emerging markets have spent a higher percentage of their annual income on consumer electronics devices in the past 12 months than those in mature markets. Chinese urban consumers, already allocating the largest share of their income toward consumer technology, plan to slightly increase this share in the next 12 months. Consumer electronics companies should capitalize on these myriad opportunities.
So what newer electronics fuel increased spending within emerging markets? Preferences vary across countries. Across all urban emerging markets, tablets for personal and professional use are especially important. China posted the greatest ownership percentage (27%); over the next 12 months the percentage of consumers owning tablets ranked highest in Brazil, China and India rank highest. These Brazilian, Chinese and Indian consumers cited purchasing the tablet’s portability (relative to a laptop) and its status as the latest innovation in consumer electronics as reasons to buy them. Consumers in emerging countries, furthermore, are using tablet computers much more often for professional use – in several cases three times as much as mature countries. In Brazil, South Africa and India, in particular, tablets are used extensively for personal and professional reasons.
Market opportunity No. 3: The younger generation
The younger generation (those between the ages of 18 and 34) intensely crave consumer electronics technology and associated services and applications, and should be a focal point of consumer electronics companies. Our survey showed this younger group uses and buys more consumer electronics products and services than the older generation (those 35 and above). Fifty-five percent have downloaded apps at least once a week in the past 12 months, compared with 44% of older consumers. Younger consumers also lead adoption of new tech¬nologies, owning more of product categories most recently introduced to the market such as smartphones and tablets. They are also more ambitious in their purchase intentions: During the next 12 months, a higher percentage of younger than older consumers intend to buy products in each of the 19 consumer electronics categories. In addition, younger consumers do more activities using consumer electronics. When asked, “Which of the following do you do in a typical week on your consumer electronics devices?” those 35 or younger lead the older generation in every activity except more traditional ones such as emailing from a PC or mobile device.
Mitch Cline is global managing director of Accenture’s Electronics & High-Tech Group. He can be reached at Mitchell.r.cline@accenture.com.
