The consumer technology sector has boomed for a number of years on the back of new technologies, such as smartphones and tablets exploding onto the market. In many regions these segments are now reaching maturity, with a corresponding decrease in uptake and replacement. Consumer IoT devices, it was hoped, would come to create new revenue streams. However, research by Accenture shows that sales, on the back of devices that are too expensive, have too many security holes and encroach too far into private lives, have so far been seen off by consumers.
In a recent Accenture survey, titled ‘Igniting Growth in Consumer Technology’, the consulting firm explores the maturity of the consumer technology market across the globe. The survey involved 28,000 consumers in 28 countries regarding their use of consumer technology.
The survey finds that the smartphone market is reaching levels of saturation in the east and is maturing in the west. Across the globe, the number of people planning on purchasing a new smartphone in the next 12 months dropped six points from last years’ survey to 48%. This follows a nine point drop from its peak in 2014.
The largest drops are seen in developing countries. China sees the number of people intending to buy a smartphone drop 21 points to 61%, while the Indian market drops from a peak of 80% in 2014 to 68%. Maturing in the developed market has now been reached, with purchase intent stable across the three markets surveyed, at 46% in Germany, 39% in the US, and 37% in the UK.
According to the research, penetration for smartphones among online consumers has hit new highs in many countries surveyed. Eight out of ten (80%) online consumers now own a smartphone across all markets. In China this has reached 89%, while in India it is at 80%. Only Japan, Slovakia and Turkey have less than 70% smartphone ownership.
The reason for sticking to their current smartphone model varies for consumers; however the most prominent reason is that they are satisfied with their current device at 47%. Just having bought a new device is the stated reason for 26% of consumers, while 14% says that they cannot afford a new device. Only 4% feel that new devices do not offer innovative features.
The wider device market is also seeing consumer interest drop off. The survey finds that there is a nine point drop in purchase intent for tablets, an eight point drop in televisions and a six point drop for laptop computers. Overall, 33% of consumers expected to increase spending on smartphones, tablets and laptops in 2014, compared to only 13% in this year’s survey.
One hope from purveyors of consumer technology was that the consumer IoT market would pick up. The result of this year’s survey highlights that this has in point of fact not happened; there is even a decline in interest for personal IoT devices. The reasons for the lacklustre response to the much hyped market come from various factors, chief among which is the high expense of the items – as cited by 62% of those surveyed. Privacy and security concerns come in second at 47%, followed by uncertainty about whether the device would add value at 23%. For 17% the devices are too difficult to use.
Whereas the reduction in price is something that can be improved with maturity, security and privacy concerns remain a stubborn and potentially intractable issue for the devices. Large scale security breaches at high profile companies highlight that cyber security remains a fickle problem. Companies, while often pointing to cyber threats as the concern for consumers, must also reflect on their own policies regarding the collection, processing and dissemination of private life information gathered from their customers.
Customers do not merely fear how their information is used once it is stolen, but also how companies might use information gathered from their private lives to discriminate and manipulate them through various channels in the search for new and increased revenue streams and profit. As it stands, 18% of consumers have decided to stop using their device following concerns, 24% have postponed purchasing such a device, while 37% are being careful about how they use it. Only 21% are not concerned about security breaches.