Demand for consumer technology will soar in 2012, with streaming video and cloud storage being two major tends this year, according to Deloitte.
Deloitte’s State of the Media Democracy (sixth edition) survey assesses media consumption preferences of nearly 2,000 consumers, ages 14 to 75 years old in the US, revealing significant trends including increased access to content driving consumption, smartphones continuing to challenge other devices and the role of DVRs in preserving consumers’ cable and satellite television subscriptions.
“Moore’s Law and strong competition will continue to drive the value for money of many consumer technology products, from televisions to tablets. A colour TV cost, adjusting for inflation, about £1,000 in the late 1970s. Today, that could buy you a colour TV, two tablets, three smartphones and a netbook.” Deloitte said in a statement.
Jolyon Barker, global lead for Deloitte’s ‘technology, media and telecommunications’ industry, comments, ”This year’s predictions cover a range of topics, including the demand for consumer technology, the rise of the multi-tablet owner, 3D printing and the growth of big data.
”So-called ‘Big data’ projects had a total industry revenue of only £65 million in 2009. However, 2012 will see 90 per cent of Fortune 500 companies kick off a data-related initiative, which will boost the industry’s revenue to between £650 million and £1 billion. Acceptance of big data is still in its infancy, mostly used for meteorology and physics simulations, but interest is gaining pace.
“Nevertheless, as data warehouses start to overflow and as the need for more relevant and timely analysis begins to put strain on traditional analytics tools, the industry cannot afford to get carried away with the ‘big’ in big data; it needs to maintain its focus on extracting insights that help to improve decision-making and business outcomes.
”The tablet explosion has shown little sign of slowing down since hitting the market in 2010 and is set to take the mantle of the most rapid multiple market penetration in history. Around five million tablets will be sold to people who already own one in 2012, generating up to £1.3 billion in revenue for technology businesses. It is worth remembering that it took several decades after introduction for more than five percent of households to have more than one car, phone, radio or TV.
”Peter O’Donoghue, UK Head of technology at Deloitte, adds, ”The storage technology used for the world’s consumer devices is mostly taken for granted by consumers by the increasing desire for smaller, lighter gadgets and increasing acceptance of cloud-based services could provide a boost for the solid-state drive vendors.
”By the end of 2012, solid state storage for small devices such as MP3/4 players, smartphones and tablets will likely account for 90 per cent of the market, compared to 20 per cent in 2006, and a sixth of the laptop segment.”
Some highlights
• Consumer technology will continue to see robust demand in 2012, with record numbers of devices (televisions, computers, mobile phones, MP4 players) sold globally
• Multiple ownership of tablets proliferates: five million tablets will be sold to people who already own one, generating up to £1.3 billion in revenue
• By the end of 2012, solid state storage will be the storage technology used in 90 per cent of small devices such as MP3 players, smartphones and tablets, up from 20 per cent in 2006
• Big data projects will be worth between £650 million and £1 billion in 2012
Key predictions include:
Accessibility Drives Demand
Access to content is increasing American media consumption. Movies are available on a wider array of platforms – home TV via cable, satellite, DVD, pay-per-view, Internet and online via streaming/downloading to a personal computer, gaming console, smartphone or tablet. As recently as 2009, only 28 percent of Americans reported streaming a movie; today, 42 percent report streaming.
Moreover, the number of people citing streaming delivery of a movie to their computer or television as their favorite way of watching a movie rose to 14 percent from 4 percent in 2009.
Most tellingly, in 2007, 37 percent of people said that they had not viewed a movie, available for purchase or rental, during the past six months. In 2011, that percentage of non-consumers dropped to only 19 percent.
The phenomenon of eBook readers increasing consumer purchases of books is another encouraging sign that digital content married with new devices can increase consumption.
While only 23 percent of respondents preferred to be able to download their books, magazines and newspapers to a digital device in 2007, more than one-third of respondents (36 percent) now express interest in this option.
Newspapers have also benefited from increased accessibility via smartphones. This year’s survey found that 20 percent of leading millennials (respondents between the ages of 23 and 28) have read their favorite newspaper in the last six months on a smartphone – up from 9 percent last year. Eleven percent of leading millennials have also stated that this is their favorite method for reading the newspaper – up from 3 percent last year.
“Our data shows that while Americans may be less interested in physical content, their appetite for digital content continues to grow. That appetite, coupled with the introduction of new technologies, is leading consumers to access the content they want on a number of different devices,” said Phil Asmundson, vice chairman and U.S. media & telecommunications sector leader, Deloitte LLP. “Consumers may be watching fewer television shows and movies on TV, or reading fewer physical copies of books and newspapers, but they have not stopped consuming the content. They are simply watching or reading on different media or platforms.”
Smartphones Challenge Other Devices
Americans’ love of smartphones continues to grow. The number of households owning smartphones jumped to 42 percent in 2011 from 25 percent in 2009. Furthermore, the number of consumers interested in purchasing a smartphone in the near future increased to 52 percent in 2011 from 40 percent in 2010.
As adoption of smartphones grows, Americans are beginning to use them as “all in one” devices for a number of different tasks. In 2011 the survey found increases in Americans using: text messaging (up to 78 percent in 2011 from 71 percent in 2009), mobile online search (46 percent in 2011 compared to 30 percent in 2009, GPS for directions (37 percent in 2011 versus 22 percent in 2009) and even online banking, which was tracked for the first time in 2011 (19 percent).
“Smartphones allow consumers to greatly expand a phone’s functionality by downloading different applications. As the costs for these types of devices, apps and the wireless services that come with them continue to fall, consumers are starting to shift their behavior, taking advantage of connectivity, performance, and portability that rivals and often beats that of a laptop,” said Asmundson. “As 4G rollouts continue and new smartphone technology is introduced, makers of single purpose devices may need to adopt similar business models if they want to remain competitive.”
DVRs Represent an Opportunity for Cable and Satellite TV Providers
The survey also shows Americans value cable TV and satellite TV above most other services, and using a DVR is the second-most preferred means of watching one’s favorite TV show. Yet, only 44 percent of those surveyed have DVR functionality. This represents an opportunity for cable and satellite TV companies to provide this highly valued viewing capability to millions of additional Americans.
At the same time, a number of Americans have already cut, or are exploring cutting their pay TV connection entirely. Deloitte’s survey found that 9 percent of people have already cut the cord and 11 percent are considering doing so because they can watch almost all of their favorite shows online. An additional 15 percent of respondents said that they will most likely watch movies, television programs, and videos from online digital sources (via download or streamed over the Internet) in the near future.
“Consumers have shown that they value DVR functionality, yet the majority of Americans don’t have a DVR in the home. This represents a potential opportunity for cable and satellite TV providers,” said Asmundson. “In a world where consumers have other ways to access content, the DVR may be an underutilized service that could serve as a value-add for new and existing subscribers at minimal cost to cable and satellite TV companies.”
Source: www.deloitte.com/us/mediademocracy.