accenture global consumer tech research 2011
TRANSCRIPT
Alternate Letter Brochure Title
Preferred Letter Brochure TitleFinding Growth: Emergence of a New Consumer Technology Paradigm The 2011 Accenture Consumer Electronics Products and Services Usage Report
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ContentsExecutive Summary 3
About the Research 6
"Hot and Not" Technologies: Consumer Technology Ownership Patterns 8
Where’s the Opportunity? The Importance of Consumer Technologies and Spending Patterns 17
An Activity-Based View: What are Technology Users Doing? 22
A Look at the US Market 27
Implications for Consumer Technology Companies 30
Snapshots of Hot Technologies 33
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choice, consumer technology companies must have the same ability to adapt to consumer preferences as do other lifestyle companies. Just like fashion businesses (such as Zara or H&M), for instance, consumer tech companies must align research and development capabilities with the ability to predict and follow consumer preferences around the world, strengthen innovation capabilities, and create more agile and responsive operations.
Around the world, today’s consumers view technology as an integral part of their lifestyle, just like fashion and transportation. In fact, as a spending category consumer technology is ranked by the majority of consumers as a top-three priority (in Japan, it’s the top priority). But as with other lifestyle categories, rapid shifts in consumer technology and usage preferences are occurring. This year’s edition of Accenture’s Consumer Electronics Products and Services Usage Report reveals high interest in new technologies, greater turnover in device usage, significant preference and usage differences among generations and global regions, and sustained spending levels despite an uncertain economy. As a result, to win as a lifestyle
Executive Summary
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next upgrade cycle for TVs (3-D TV) is underway. And, Blu-ray players are continuing to displace DVD players (albeit at a slow pace) and VCRs.
Another benchmark of the new technology paradigm is that as new technologies emerge, consumers are increasingly quick to stop using particular devices if they feel they have the same functionality in another device that performs the same function better—especially in BRIC markets. Twelve percent of consumers surveyed in the BRIC markets stopped using mobile phones in 2010 because they had another device with the same functionality. This compares with only five percent of consumers in mature markets who jettisoned their mobile phones. And, in both mature and emerging markets, younger people appear to be far more willing to let go of duplicative devices.
Surprises in the ranks of the most popular appsThe most popular applications in 2010 included emailing and searching the Web for information. But surprisingly, banking ranked number three in popularity and is an activity conducted in a typical week by more survey respondents than is texting or watching videos. Social networking held steady in popularity with 39 percent of respondents using social networking apps in a typical week. In both the US and China, the percentage of respondents doing social networking in 2010 and 2011 held constant at 46 percent in the US and 37 percent in China. India’s participation in social networking has actually declined. In 2010, 57 percent connected at least weekly, and in 2011 that number had fallen to 42 percent. And, new to the ranks among popular applications was “managing my health,” which was selected by just over one-fourth of respondents as an activity they conduct via technology in a typical week.
A widening enthusiasm gapThe urban consumers in Brazil, Russia, India and China (the BRIC markets) have leapfrogged the average mature-market consumer in their use of technology. They have a much greater appetite for consumer technology from many measures, including the devices they own, their purchase plans and their use of applications. Counter to common misperceptions, a large segment of BRIC consumers are more interested in the newest and most innovative technologies than in the lower price point technologies with less functionality. BRIC market consumers have a higher rate of adoption of the newest technologies and a greater willingness to pay premiums for features and enhancements. For instance, a full 84 percent of Indian respondents say they will pay a premium for enhanced smartphone capabilities. That translates into roughly 148 million consumers.
In the BRIC markets, in particular, prospects are bullish for spending on consumer electronics in 2011. This is especially true in China, where this year’s purchasing plans for technologies such as smartphones and high-definition TVs are staggering. Assuming China has an estimated 167 million urban households and an estimated urban population of 434 million people in the consuming age, 38 million high-definition TVs and 63 million smartphones will be purchased there in 2011.
In contrast, mature markets are more conservative and price sensitive. Consumers in the US, Japan, Germany and France have less ambitious plans to purchase new devices in 2011, use fewer applications overall, and are far less willing to pay premiums for new features and enhancements. And, while consumers 55 years or older in mature markets tend to have higher disposable income (and therefore greater ability to spend on technology), they more often wish to spend as little as possible to keep up on the technology adoption curve. In contrast, younger consumers in BRIC markets demonstrate a huge
appetite for electronics, but like millennials around the globe, they are often harder to please, less loyal and have less disposable income to spend.
A new consumer technology paradigmComputers and laptops are the quiet giants among consumer electronics. Practically everyone has one. They are owned by 93 percent of respondents in our global study, and therefore the top-ranked technology in terms of ownership percentage. Twenty-eight percent of respondents purchased a computer or laptop in 2010. Yet this year’s study shows that there may be a chink in the giant’s armor. Only 17 percent of consumers we surveyed plan to purchase a computer in 2011—a 39 percent decline in the purchase rate in the next year.
In fact, the trends in ownership of various devices indicate that some newer technologies may be rapidly making others obsolete. For instance, while the growth rate of computers is expected to decline, the growth rate of tablet PCs is estimated to be up by 160 percent. And while our study shows that game consoles, digital photo cameras and portable music players are all facing declining growth rates, the smartphone (which can do many of the same activities) is expected to increase its growth rate by 26 percent.
So can the giant remain strong? Or, in the long run, will a group of newer technology alternatives (the tablet PC, netbook, smartphone and e-book reader) make the computer and other devices obsolete? If measuring strength by unit sales, one finds the computer will remain the strong giant for many years. But if measuring by growth rate, the giant seems to be weakening.
This year’s data also shows consumers are well into or nearing the end of several technology upgrade cycles. For instance, regular TVs are largely being replaced by high-definition TVs, and there are emerging signs that the
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In summary, in the fast-changing consumer electronics industry, exploiting big growth opportunities is becoming increasingly difficult. Our research helps consumer tech companies with this challenge by offering information on the hottest current and emerging geographic, product and application markets for consumer technology. For instance, the highest spending in 2011 (and we believe for years to come) is projected to be in urban and semi-urban BRIC markets. Demand for mobile applications such as banking continues on a strong growth trajectory. And new technologies (such as tablet PCs and e-book readers) and next-generation technologies (such as smartphones, 3-D and Internet-capable TVs) are projecting substantial growth.
The research also suggests that consumer technology companies will require new—or, at minimum, stronger—capabilities to capitalize on these growth opportunities and remain a relevant lifestyle choice to consumers. For many consumer technology companies, keeping pace will require a rethinking of their innovation engines. Specifically, we believe organizations must pay much more attention to the foundational elements of innovation—those things that form the basic capabilities of their R&D function. They need to distribute their innovation around the world to enable them to develop offerings that are more attractive to local markets. They also need to achieve a greater level of innovation process discipline so they can reduce time to market and increase return on innovation investment. Finally, all consumer tech companies should be paying close attention to ensuring that they have the capabilities that will help them consistently execute their innovation process over time to sustain their success.
Multi-device application use on the riseAfter years of applications and activities being tied to a specific type of hardware, many activities are now device agnostic. Some of the most popular new consumer technologies are able to perform many of the same activities as other well-established devices in the marketplace. For example, smartphones are just as able to hold all of one’s music and take high-quality photos as portable music players and digital cameras.
So to better understand which devices consumers choose for various activities, we queried respondents about the activities they do weekly on mobile or smartphones, laptops, televisions, tablet PCs, netbooks, e-book readers and in cars. Overall, respondents indicated they clearly prefer to conduct some activities on mobile or smartphones (texting and email), television (watching shows), and e-book readers (reading). However, for many of the activities most frequently done on a computer, a respondent is also as likely to use a mobile phone, tablet PC or netbook. Emailing, texting, watching videos and connecting on social networks are all increasingly multi-device activities. For instance, in India, emailing on a PC dropped from 86 to 67 percent year-over-year while emailing by phone grew from 19 to 34 percent. Hence, while computers are the most frequently turned-to devices, consumers are more often conducting activities with a multi-device approach.
Innovation and environmental responsibility remain strong drivers of growthSo what will motivate consumers to make purchases in the coming year? Perhaps innovation will play a part. Almost two-thirds of consumers said it was somewhat or very important to them that the products they purchase are perceived as the most innovative of technologies. Innovation appears to be a far more important purchase lever in emerging markets than mature ones: 76 percent of the former said the perception of having the most innovative of technologies was somewhat or very important to them versus 46 percent of the latter. However, as the recent lines of consumers waiting for new Apple iPhones and those waiting for Wii game consoles just a few years ago illustrate, there will always be mature market consumers who respond to the market hype about new technology.
Environmental responsibility is also clearly important to consumers, so much so that it commands a premium price. Sixty-eight percent of respondents said they would pay a premium for an environmentally friendly product (e.g., lower power consumption, easier to recycle, manufactured using sustainable practices). Again, this is a bigger growth driver in emerging markets than mature ones, at least if measured by price elasticity. A full 82 percent of emerging-market respondents said they would pay a premium for environmentally friendly products compared with just over half of mature-market respondents.
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About the Research
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About the Researchconducted a quantitative online consumer study comprising 8,002 interviews across eight countries: the US, Japan, Germany, France, Brazil, Russia, India and China. The research, fielded in October and November 2010, sought to cover a demographically representative sample across all the geographies (Figure 1). In Brazil, China, India and Russia, the sample is representative of the urban and semi-urban populations. (In this research report, we reference aggregate data for these countries as findings on BRIC markets or emerging markets. We refer to aggregate data for Japan, Germany, France and the US as mature markets.)
For four consecutive years, Accenture’s Electronics & High Tech industry practice has conducted research to identify and track preferences for consumer technologies and services. The research is intended to help consumer technology executives better understand the purchase patterns and use of consumer technologies and to gain deeper insights into global differences. From this research we are better able to project future technology trends based on current behavior and identify trends emerging from behavioral changes in the use of technology.
This annual research began as a US study in 2008 and grew to a global study in 2010. For the 2011 report, Accenture
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Figure 1. Respondent demographics
Figure 1
55 or older
45-54 years
35-44 years
25-34 years
18-24 years
Age
Male
Female
Gender
Country
50%
50%
China
India
Russia
Brazil
Japan
Germany
France
US
12.5% 12.5%
12.5% 12.5%
12.5%
12.5%
12.5%
12.5%
20% 15%
24%
22%
19%
50% 50%
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Hot—and Not—Technologies
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"Hot and Not" Technologies: Consumer Technology Ownership Patterns
• Forty percent of respondents in mature markets don’t plan to purchase any consumer electronics in 2011, compared with only 9 percent of those in the BRIC markets.
• Emerging markets are quicker to let go of duplicative technologies than are mature markets, particularly mobile phones, regular TVs, DVD players and VCRs.
High-level findings: • While the growth rate of computers is expected to decline in 2011, the growth rate of tablet PCs is estimated to increase by 160 percent. The purchasing growth rate for 3-D TV in 2011 is projected to be a staggering 500 percent.
• Tablet PCs and e-book readers are owned by nearly a quarter of Chinese respondents—more than three times the ownership rates of any other country except India, where 10 percent of respondents own a tablet PC.
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As the giant of consumer electronics, the computer is owned by 93 percent of respondents. Yet the trends in ownership of various devices indicate that some newer technologies may be rapidly making others obsolete, including the traditional desktop/laptop computer. While the growth rate of computers is expected to decline, the growth rate of tablet PCs is expected to be up by 160 percent. Bottom line, there’s an end in sight for the relevance of the personal computer as we know it today.
To better monitor this trend and help consumer electronics companies find growth opportunities, this year Accenture introduces its 2011 Consumer Technology Power Rankings (Figure 2), in which we rank the top consumer technologies based on their global penetration and changes in their projected rates of growth year over year.
Given the ubiquitous ownership of the computer, it holds the top spot in the 2011 Power Rankings. Mobile phones rank second but face an even steeper rate of purchasing decline than computers, with 56 percent fewer consumers planning to purchase mobile phones this year than in 2010. It is intuitive that mobile phone users are switching more aggressively to smartphones. Ranked 10th overall, the purchase rate of smartphones is projected to increase by 26 percent in 2011.
Digital cameras hold the #3 spot in the rankings, owned by 76 percent of respondents. But the camera is projected to decline in purchase rate by 45 percent next year. And while DVD players hold the #4 rank, they face the steepest purchasing rate decline of the 19 consumer technologies evaluated this year. High-definition TVs are owned by only 50 percent of respondents, but it is the most pervasively owned technology in the Power Rankings that is showing projected purchase-rate growth next year. In France and Japan this year, more consumers have high-definition TVs than regular TVs.
While some of the newest technology innovations hold the lowest Power Rankings this year, their growth rates are projected to be phenomenal. For instance, 3-D TV is the technology owned by the smallest percentage of respondents, but its purchasing growth rate in 2011 is projected to be a staggering 500 percent. Tablet PCs, e-book readers and Blu-ray players round out the list for the technologies expecting the most purchasing growth this year.
As the global data foretells, the computer is the technology owned by the most respondents in every country surveyed. But consumers country to country certainly have different
preferences about other devices (Figure 3). For example, smartphones are far more popular in some countries than others: 53 percent of Chinese consumers own a smartphone, compared with only 10 percent of their Japanese counterparts and 33 percent of Americans. Tablet PCs and e-book readers are owned by nearly a quarter of Chinese respondents—more than three times the ownership rates of any other country except India, where 10 percent of respondents own a tablet PC. This data is not unlike research recently released by market research firm Technology Business Research, Inc. (TBR). TBR finds that the tablet will displace many consumers' secondary PCs but predicts the market will ultimately support all three device styles for computing and connectivity, including the laptop, tablet and smartphone.1
Globally, some devices (such as smartphones, portable music players, game consoles and portable gaming systems) are much more prevalent among younger generations than those over 55. This generational difference is most pronounced within mature markets, where there are significant differences in what younger generations (under 25) and older generations (over 55) own most frequently (Figure 4).
1"Oops, Steve Jobs Did it Again: Apple's iPad Will Disrupt the PC Market by Creating a New Usage Model", 2010 iPad Study, Technology Business Research Inc, September 16, 2010.
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Figure 2. 2011 Consumer Technology Power Rankings
Rank Consumer Technology Power Trend
1 Computer
2 Mobile Phone
3 Digital Photo Camera
4 DVD Player
5 Regular TV
6 High-Definition TV
7 Portable Music Player
8 Game Console
9 VCR
10 Smartphone
11 GPS
12 Digital Video Camera
13 Portable Gaming Device
14 DVR
15 Netbook
16 Blu-ray Player
17 Tablet PC
18 E-book Reader
19 3-D TV
-39%
-56%
-45%
-57%
-50%
-37%
-25%
-25%
0%
0%
9%
26%
11%
22%
120%
160%
133%
500%
50%
Power trend calculated as (% intending to purchase next year - % purchased last year)/% purchased last year
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Figure 3. Country breakdown of device ownership
China
India
Russia
Brazil
Japan
Germany
France
US
Total
Figure 3
0% 20% 40% 60% 80% 100%
3-D TV
E-book reader
Tablet PC
Blu-ray player
Netbook
DVR
Portable gaming device
Digital video camera
Health and fitness device
GPS
Smartphone
VCR
Game console
Portable music player
High-definition TV
Regular TV
DVD player
Digital photo camera
Mobile phone
Computer
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Figure 4. Generational differences in device ownership
Figure 4
0% 20% 40% 60% 80% 100%
GPS
Health and fitness device
VCR
Blu-ray player
DVD player
Digital video camera
Digital photo camera
Portable gaming device
Game console
Portable music player
E-book reader
Netbook
Tablet PC
Computer (desktop or laptop)
DVR
3-D TV
Regular TV
High-definition TV
Smartphone
Mobile phone
0% 20% 40% 60% 80% 100%
GPS
Health and fitness device
VCR
Blu-ray player
DVD player
Digital video camera
Digital photo camera
Portable gaming device
Game console
Portable music player
E-book reader
Netbook
Tablet PC
Computer (desktop or laptop)
DVR
3-D TV
Regular TV
High-definition TV
Smartphone
Mobile phone
55 or older
45-54 years
35-44 years
25-34 years
18-24 years
55 or older
45-54 years
35-44 years
25-34 years
18-24 years
Emerging markets
Mature markets
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What is being discarded as obsoletePerhaps a leading indicator of growth challenges for particular types of devices is what consumers stopped using because they feel they have the same functionality in another device. The devices that the greatest percentage of survey respondents have stopped using are the VCR and regular TV (Figure 7). Perhaps that helps to explain why the purchase rate for regular TVs is expected to decline by 50 percent next year.
Emerging markets are quicker to let go of duplicative technologies than are mature markets, particularly mobile phones, regular TVs, DVD players and VCRs. More than 10 percent of respondents stopped using these devices in BRIC countries last year. This is in contrast to mature markets, where no more than 9 percent stopped using any device.
And in both mature and emerging markets, younger people appear to be far more willing to let go of duplicative devices. Seventy-three percent of those 55 and older said they haven’t stopped using anything because of duplicate functionality, compared with just 46 percent of those under 25.
The most-used consumer technologiesThe top five consumer electronics in terms of those used most often include (in order of most frequent use): smartphone, computer, mobile phone, high-definition TV and regular TV (Figure 8). Given that smartphones are only 10th in the Power Rankings (owned by 28 percent of the respondents), it’s clear that those who own them use them heavily.
Interestingly, consumers in every country rank the same technologies among their most often used, with slight variations within their order in the top four ranks. For instance, BRIC markets have a higher use of mobile phones than do other countries. Televisions and computers are used less often in emerging markets than in mature ones.
in emerging markets. In particular, consumers in Brazil, China and India purchased a number of electronics more than respondents in other countries, including mobile phones, smartphones, computers, netbooks and digital photo cameras. With more stable economies and growing wealth among the middle class in these countries, consumers’ appetites for technology (especially mobile technology) are insatiable.
What consumers plan to purchase in 2011The technologies that most respondents intend to purchase within the next 12 months include high-definition TVs, smartphones and computers (Figure 6). In general, those devices with the largest ownership base are also those continuing to be purchased.
Interestingly, one-quarter of respondents globally don’t plan to purchase any consumer technologies in 2011. More than one-third (37 percent) of those 55 and older don’t plan any purchases, compared with only 15 percent of those between 18 and 24 years of age. And a stark contrast in purchasing plans exists between mature and BRIC markets: 40 percent of respondents in mature markets don’t plan to purchase any consumer electronics in 2011, compared with only 9 percent of those in the BRIC markets.
One factor that could influence the purchase plans for smartphones and tablet PCs next year is the availability of applications for these devices. Seventy percent of respondents said that the availability of applications slightly or greatly influenced their decision to purchase a smartphone or tablet PC. Almost one-third (31 percent) said it greatly influenced their purchase decision.
What was purchased in 2010Mobile phones and computers were the consumer electronics devices purchased by the most respondents in 2010. Perhaps because these devices are the most ubiquitous globally, the largest percentage of consumers continued to buy them in 2010. However, as the Power Rankings indicate, the growth rate in mobile phone and computer purchases is showing decline.
The third-most purchased consumer technology was high-definition TVs, bought by 23 percent of respondents. As the latest technologies to hit the market, tablet PCs, 3-D TVs and e-book readers were purchased by small minorities of respondents (Figure 5). Yet as the Power Rankings indicate, many more consumers anticipate purchasing these technologies in 2011. VCRs were the least purchased technology in 2010, purchased by only 1 percent of respondents globally.
There were significant differences between what mature-market respondents and emerging-market respondents purchased in 2010. Overall, more respondents in emerging markets made purchases than in mature markets: 87 percent of emerging-market consumers made purchases last year compared with 71 percent of mature-market respondents. This more conservative purchase behavior in Japan, the US and western Europe is understandable, given the uncertain economies faced by each of these countries last year and the comparative lack of enthusiasm about technology because it has been affordable and accessible to many of these consumers for years.
Electronics purchased much more frequently in emerging markets include mobile phones, computers, netbooks and digital cameras—largely driven by younger generations of the population
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Figure 5. Devices purchased in 2010
China
India
Russia
Brazil
Japan
Germany
France
US
Total
Figure 5
0% 10% 20% 30% 40% 50% 60%
None
VCR
3-D TV
E-book reader
Tablet PC
Portable gaming device
DVR
Regular TV
Blu-ray player
Digital video camera
Health and fitness device
DVD player
Game console
Portable music player
GPS
Netbook
Smartphone
Digital photo camera
High-definition TV
Computer
Mobile phone
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Figure 6. Intentions to purchase in 2011
Figure 7. Percentage of consumers who have stopped using the device this year
Emerging markets
Mature markets
Globally
Figure 6
Figure 7
0% 5% 10% 15% 20% 25%
None of the above
GPS
Health and fitness device
VCR
Blu-ray player
DVD player
Digital video camera
Digital photo camera
Portable gaming device
Game console
Portable music player
E-book reader
Netbook
Tablet PC
Computer
DVR
3-D TV
Regular TV
High-definition TV
Smartphone
Mobile phone
Percent of Respondents Intending to Purchase
0% 10% 20% 30% 40% 50% 60% 70% 80%
None of the above
GPS
Health and fitness device
VCR
Blu-ray player
DVD player
Digital video camera
Digital photo camera
Portable gaming device
Game console
Portable music player
E-book reader
Netbook
Tablet PC
Computer
DVR
3-D TV
Regular TV
High-definition TV
Smartphone
Mobile phone
Emerging markets
Mature markets
Globally
Figure 6
Figure 7
0% 5% 10% 15% 20% 25%
None of the above
GPS
Health and fitness device
VCR
Blu-ray player
DVD player
Digital video camera
Digital photo camera
Portable gaming device
Game console
Portable music player
E-book reader
Netbook
Tablet PC
Computer
DVR
3-D TV
Regular TV
High-definition TV
Smartphone
Mobile phone
Percent of Respondents Intending to Purchase
0% 10% 20% 30% 40% 50% 60% 70% 80%
None of the above
GPS
Health and fitness device
VCR
Blu-ray player
DVD player
Digital video camera
Digital photo camera
Portable gaming device
Game console
Portable music player
E-book reader
Netbook
Tablet PC
Computer
DVR
3-D TV
Regular TV
High-definition TV
Smartphone
Mobile phone
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Our study shows that BRIC markets have far greater enthusiasm for technologies and appetite for purchasing them than non-BRIC countries, especially the latest devices such as tablet PCs. One could infer that the lower use of computers in BRIC countries is an indication that these consumers are finding alternate devices to do those activities formerly done on the computer—and may, in fact, have simply leapfrogged the step of owning a computer that those in mature markets had to take because at the time there were no other options.
The least-frequently used consumer electronics are (in order, beginning with least frequent use): digital video cameras, GPS, VCRs, portable gaming devices and DVD players. Despite their less frequent use, video cameras and GPS are projected to grow in purchases next year. For these devices, while they don’t get used as often, they remain important to consumers when they are needed.
The most-used technology servicesAmong technology services used by consumers, home Internet service is the most pervasive across the countries we surveyed—cited by 89 percent of respondents as one of the top-three services they use regularly (Figure 9). Mobile phone service was the next-most used service, cited by two-thirds of respondents as a top-three service. After those two services that are consistently used by the majority of respondents, the next-most regularly used service varies greatly. Pay TV service (34 percent) and mobile data service for mobile phone (26 percent) were the next-most frequently cited as a top-three service.
Figure 8. Most frequently used technologies
Figure 9. Most frequently used technology services
Figure 14
0% 20% 40% 60% 80% 100%
3-D TV
E-book reader
Blu-ray player
VCR
Digital video camera
Tablet PC
Portable gaming device
GPS
Health and fitness device
Game console
DVR
Netbook
Portable music player
DVD player
Digital photo camera
Smartphone
Regular TV
High-definition TV
Mobile phone
Computer
Percent of respondents ranking within the top 3 most frequently usedFigure 8
Figure 9
Satellite radio (e.g., XM/Sirius, Worldspace)
VoIP phone service (e.g., Vonage, Skype)
Mobile data service for my laptop
Mobile data service for my mobile phone (e.g., email on mobile phone)
Pay TV service (e.g., Cable service, IPTV service, Satellite service, Video on Demand, pay-per-view)
Mobile phone service
Home Internet access
Base size = 7,677
0% 10% 20% 30% 40% 50% 60% 70% 80%
Travel
Healthcare and well-being products
Entertainment and recreation services
Consumer electronics
Furniture and householdappliances
Personal transportation
Clothing and shoes
China
India
Russia
Brazil
Japan
Germany
France
US
Total
Represents percentage of respondents ranking the category in the top three in importance
0% 20% 40% 60% 80% 100%
Percent of respondents ranking within the top 3 most frequently used
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High-level findings: • Respondents consider consumer technology to be integral to their lifestyle, ranking it just behind clothing and personal transportation in importance as a spending category.
• US consumers surveyed were the most conservative spenders on consumer technologies in 2010, while Chinese consumers spent the most. Fifty-seven percent of Chinese survey respondents spent $1500 or more. Globally, consumers’ planned budgets for technology in 2011 mirror their purchasing patterns from 2010, with emerging-market spending plans being substantially more ambitious than mature markets.
Where’s the Opportunity? The Importance of Consumer Technologies and Spending Patterns
• Sixty-one percent of respondents said it was somewhat or very important to them that the products they purchase are perceived as the most innovative of technologies.
• Sixty-eight percent of respondents globally said they would pay a premium for environmentally friendly products.
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difference across age groups in China in terms of spending patterns, while in Brazil consumers 55 or older represented the highest share of big spenders.
Globally, consumers’ spending plans for 2011 mirror consumer electronics purchasing patterns from last year, with emerging-market spending plans being substantially more ambitious (especially in China and Brazil), than those in mature markets (Figure 12). Economic uncertainty in mature markets may be motivating a “wait and see” approach, while enthusiasm for technology—and better economic conditions—in emerging markets is driving aggressive spending plans there.
For the first time, in this year’s study we investigated how important consumer electronics are to consumers relative to other categories competing for their wallets. We learned that of seven categories of purchases, consumer electronics ranked in the top three in importance, along with clothing and shoes, and personal transportation (car, motorcycle, scooter). Consumer electronics are considered more important to people between the ages of 25 and 34 than to other age groups. To these individuals, consumer electronics rank second behind clothing and shoes. The youngest adults (people aged 18 to 24) rank consumer electronics less important than entertainment and recreation services as well as clothing and transportation. Surprisingly, across the globe, consumer electronics are considered more important to consumers than healthcare and well-being products. Figure 10 shows the different levels of importance consumers in various countries place on consumer electronics.
Despite the fact that consumers of all ages and geographies consider technology as integral to their lifestyles, consumer electronics companies must compete extensively—and differently among consumer segments—with other consumer priorities to convert that fascination into sales.
Past and predicted spending on consumer electronics It appears from the above category preferences that spending on consumer electronics is quite discretionary. Perhaps, then, it’s not surprising that while 11 percent of respondents globally did not spend any money on consumer electronics in the past 12 months, an equal number (9 percent) spent at least $3,000 or more. The US was the most conservative in spending on consumer technologies in 2010, while China was the biggest spender (Figure 11). Brazil and Russia were also reasonably big spenders. There was no significant
Figure 10. Importance of consumer electronics relative to other categories of spending
Figure 8
Figure 9
Satellite radio (e.g., XM/Sirius, Worldspace)
VoIP phone service (e.g., Vonage, Skype)
Mobile data service for my laptop
Mobile data service for my mobile phone (e.g., email on mobile phone)
Pay TV service (e.g., Cable service, IPTV service, Satellite service, Video on Demand, pay-per-view)
Mobile phone service
Home Internet access
Base size = 7,677
0% 10% 20% 30% 40% 50% 60% 70% 80%
Travel
Healthcare and well-being products
Entertainment and recreation services
Consumer electronics
Furniture and householdappliances
Personal transportation
Clothing and shoes
China
India
Russia
Brazil
Japan
Germany
France
US
Total
Represents percentage of respondents ranking the category in the top three in importance
0% 20% 40% 60% 80% 100%
Percent of respondents ranking within the top 3 most frequently used
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Figure 11. Amount spent on consumer electronics in 2010
Figure 12. Consumers’ intentions to spend on consumer technologies in 2011
Figure 10
China
India
Russia
Brazil
Japan
Germany
France
US
Total
0% 10% 20% 30% 40% 50%
I have not spent any money on consumer electronics in the past year
$3,000 or more
$1,500 to less than $3,000
$500 to less than $1,500
Less than $500
0% 10% 20% 30% 40% 50% 60%
China
India
Russia
Brazil
Japan
Germany
France
US
I do not plan to spend any money on consumer electronics next year
$3,000 or more
$1,500 to less than $3,000
$500 to less than $1,500
Less than $500
China
India
Russia
Brazil
Japan
Germany
France
US
Total
0% 20% 40% 60% 80% 100%
No
Yes
Figure 11
Figure 12
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As consumers consider technology purchases, the most important source of influence on purchase decisions is personal research (cited by 36 percent).Thus, for consumer tech companies, providing consumers with easy access to product information can be critical to shaping their opinions of products. A secondary influence, but far less important, is recommendations from friends and other trusted individuals (Figure 14). China stands out here, putting recommendations from friends and consumer rankings ahead of personal research in sources of importance. Advertising campaigns, manufacturer websites and in-store salespeople were all ranked very low as sources of influence on purchase decisions.
Similarly, sustainability also appears to affect consumers’ technology spending plans, so much so that it commands a premium price. Sixty-eight percent of respondents globally said they would pay a premium for environmentally friendly products (e.g., one with lower power consumption, that’s easier to recycle, or that’s manufactured using sustainable practices). From a country perspective, consumers in emerging markets are far more likely than those in mature markets to say they would pay a premium for environmentally friendly products. One example of the stark contrast: 89 percent of Chinese respondents, versus just 47 percent of those in the US, indicated they would pay more for such devices.
Drivers of purchase behavior: The importance of innovation, sustainability and personal research So what will motivate consumers to follow through on their spending plans, spend more or change the minds of those currently not planning any purchases? Perhaps innovation will play a part. Almost two-thirds (61 percent) of respondents said it was somewhat or very important to them that the products they purchase are perceived as the most innovative of technologies. Once again, emerging-market consumers led the way, as they were much more likely than their mature-market counterparts to believe that innovation is important (Figure 13).
Figure 13. Willingness to pay a premium for environmentally friendly products
0% 10% 20% 30% 40% 50% 60%
China
India
Russia
Brazil
Japan
Germany
France
US
I do not plan to spend any money on consumer electronics next year
$3,000 or more
$1,500 to less than $3,000
$500 to less than $1,500
Less than $500
China
India
Russia
Brazil
Japan
Germany
France
US
Total
0% 20% 40% 60% 80% 100%
No
Yes
Figure 11
Figure 12
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Figure 14. Sources of influence on purchase decisions
China
India
Russia
Brazil
Japan
Germany
France
US
Total
Figure 13
0% 10% 20% 30% 40% 50%
None of these
Ad campaign
Manufacturer’s website
The salesperson in the store where I shop
Community websites that provide consumer product/service reviews
Consumer rankings/ratings
Recommendations of friends and others I trust
Personal research
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High-level findings: • The top technology-based activities conducted in a typical week include emailing, searching for and reading general news, banking, watching shows and videos, and texting.
• Just over half of respondents bank online at least weekly.
• Half of survey respondents text at least weekly, and 14 percent spend more than five hours a week doing so.
An Activity-Based View: What are Technology Users Doing?
• Thirty-nine percent of respondents connect to a social network in a typical week, and 20 percent spend at least five hours a week at it. They do so from multiple devices (computers, netbooks and tablet PCs, in particular).
• Thirty-seven percent of respondents said they were interested in using their TV to access Web content, view personal content like photos and download applications.
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Other popular activities include banking, watching shows and videos, and texting. Just over half of respondents bank online at least weekly. While less than half (44 percent) of respondents watch shows, movies or videos each week, those who do spend considerable time at it: 31 percent do this at least five hours per week, ranking it third among the activities consumers spend the most time on each week.
Connecting with people on social networks has remained steady year over year, with 39 percent of respondents doing this in a typical week and 20 percent spending at least five hours a week at it in our 2011 report. In the US, interest is higher than average: 46 percent connected at least weekly in both 2009 and 2010. India’s participation in social networking has declined. In 2010, 57 percent connected at least weekly, and for our 2011 study that number has fallen to 42 percent.
To better understand how consumers are using the myriad consumer technologies available to them, we asked them a number of questions about the technology-based activities they perform, how frequently they use various applications and which devices they use for different activities. After years of operating in an environment where a specific device was required for a specific activity (such as needing a computer to email or a camera to take photos), many consumers now do activities across numerous technologies, making it far more complex when determining how to predict the growth of a particular consumer technology or application.
What activities are consumers spending time doing? Emailing is the main activity conducted weekly by survey respondents. It is also the activity that most consumers spend substantial amounts of time doing (Figure 15). In fact, 39 percent of respondents spend at least five hours per week emailing—more often older generations than younger ones. The second most frequent activity is searching for and reading general news and information on the Web, although it has slowed over the past two years. In China, the percentage of respondents who search for content on the Web during an average week has dropped from 84 percent to 61 percent. And, in India, searching the Web for information has dropped from 61 percent of consumers doing it weekly to 47 percent.
Figure 15. Which of the following activities do you do in a typical week? How much time do you spend?
Figure new slide
Figure 9
Total activitiesperformed
5-14 hrs
15+ hrs
0% 0%20% 20% 25% 30% 35% 40%15%5% 10%40% 60% 80% 100%
Microblogging (e.g., Twitter)
Writing blogs or contributing to online references such as Wikipedia
Reading electronic books
Participating in communities of interest on the Internet (e.g., Yahoo groups)
Reading blogs or listening to podcasts
Managing my health
Using maps and global positioning; getting directions from the Web
Downloading and using apps
Listening to streamed music on the Internet
Watching/posting videos on the Internet
Managing personal digital photos and videos
Listening to music stored on a device
Connecting with people on social networking sites (e.g., Facebook, Myspace)
Playing games
Working from home (e.g., checking emails, conference calls)
Watching shows/movies/videos
Texting/SMS
Banking
Searching for/reading general news and information on the Internet
Emailing
Base
siz
e =
8,00
2
Base
siz
e =
8,00
2
Time spent on activity: 5+ hours Rank order: time consumed
1
2
8
3
4
6
5
7
10
9
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And among those not already doing so, 37 percent of respondents said they were interested in using their TV to access Web content, view personal content like photos and download applications (Figure 17). Using the TV as a more utilitarian device is more interesting to emerging market respondents than mature market respondents. And younger generations are more interested in the TV as a multi-purpose technology than older ones.
The primary activity done on an e-book reader is, as one would expect, reading e-books (33 percent of e-book reader owners do this weekly on the device). But not as intuitive is that the next-most popular activities done weekly on this device are emailing (21 percent do this) and searching the Internet (19 percent). Of those who don’t own an e-book reader, more than half said that it is because they prefer paper books. But 20 percent said they preferred other electronic devices than an e-book reader for reading books, such as a phone, PC or tablet PC. In emerging markets, the percentage of respondents who prefer other electronic media for e-book reading is much higher: 34 percent in BRIC markets versus 7 percent for mature-market countries.
Looking across the activities done weekly on various devices, a few patterns become clear. Overall, respondents indicated they clearly prefer to do some activities on mobile or smartphones (texting and email), television (watching shows), and e-book readers (reading). However, for many activities most frequently done on a computer, if a computer is not easily accessible, a respondent is likely to use a mobile phone, tablet PC or netbook. As activities become more and more multi-device, and people more quickly jettison duplicative technologies, the Consumer Technology Power Rankings are likely to show significant shifts in years to come.
increasingly using multiple devices for activities that used to be PC-based: 44 percent of netbook owners email from it at least weekly, 40 percent email from their tablet PC and 40 percent email from a mobile or smartphone.
The data also shows a downward trend in the use of the PC for some activities. For example, in our 2010 report, 80 percent of US survey respondents emailed from their PC weekly. This year that percentage dropped to 75 percent. During the same period, checking email by phone rose from 14 percent to 24 percent. A similar downward PC usage trend is evident in the email activity in India and China.
For activities from microblogging to social networking to managing photos, posting videos, downloading apps or banking, the next-most used devices after a computer are tablet PCs and netbooks. Overall, these three devices have very similar patterns in terms of the activities done on them weekly. For instance, 37 percent connect to social networks from their computer at least weekly, 27 percent connect to social networks via their netbooks each week and 23 percent do so from their tablet PC.
When reviewing information on "heavy users" of activities—those who do the activity at least five hours per week—interesting patterns emerge. For instance, among millennials in the BRIC markets who are heavy watchers of shows and videos, a larger share (44 percent) watch them on a PC or laptop than on a television (chosen by 30 percent). A significant number of these young adults also watch videos on their mobile or smartphones.
In addition to watching shows and videos, a significant number of consumers reported doing “nontraditional” activities from their television: 21 percent search the Internet via their television, and 14 percent report emailing from the device.
Overall, about half of survey respondents text at least weekly, and 14 percent spend more than five hours a week doing so (especially, as one would expect, those 18 to 24 years old). In fact, it is in the “new” and mobile-centric activity categories such as connecting with people on social networks and texting that millennials (those in our survey 18 to 24 years old) are really similar globally. On activities that have been available longer, there is more region-specific behavior.
The big question: What device for what activity? Some of the hottest new consumer technologies, such as tablet PCs and smartphones, are able to perform many of the same activities as other well-established devices in the marketplace. So to better understand which devices consumers choose for various activities, we queried respondents about the activities they do weekly on mobile or smartphones, laptops, televisions, tablet PCs, netbooks, e-book readers and in cars. The primary lesson from this query is that there are clearly some activities that, in aggregate, survey respondents prefer to conduct on a specific device. For instance, respondents most frequently do texting on their mobile or smartphone. They more frequently watch shows and movies on TV. They listen to music stored on a device more often in the car. And they read e-books more often on an e-book reader, tablet PC or netbook (Figure 16).
Perhaps because 93 percent of respondents own computers, the computer or laptop remains the device used by the most respondents for conducting the majority of the 20 different activities we queried about. Across the countries we surveyed, 79 percent of computer owners email from their computer at least weekly. But there is evidence that respondents are
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Figure 16. Top activities conducted in an average week
Figure 15
0% 20% 40% 60% 80% 100%
Banking
Managing my health
Downloading and using apps
Reading electronic books
Watching/posting videos on the Internet
Watching show/movies/videos
Emailing
Listening to streamed music on the Internet
Listening to music stored on a device
Playing games
Managing personal digital photos and videos
Working from home (e.g., checking emails, conference calls)
Texting/SMS
Connecting with people on social networking sites (e.g., Facebook, Myspace)
Participating in communities of interest on the Internet (e.g., Yahoo groups)
Microblogging (e.g., Twitter)
Writing blogs or contributing to online references such as Wikipedia
Reading blogs or listening to podcasts
Using maps and global positioning; getting directions from the Web
Searching for/reading general news and information on the Internet
Done in a Car
Done on a TV
Done on an E-book
Done on a Netbook
Done on a Tablet PC
Done on a Laptop
Done on a Mobile/smartphone
Done on Any Device
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Figure 17. Interest in TV for accessing Web content, photos, apps
0% 20% 40% 60% 80% 100%
Tablet PC
Health and Fitness device
3-D TV
E-book
Blu-ray player
Netbook
GPS device
Digital video recorder for TV
Portable gaming device
Digital video camera
VCR
Game console
Portable music player
High-definition plasma or LCD TV
Regular (CRT or tube) TV
DVD player
Digital photo camera
Web-enabled mobile phone/smartphone
Mobile phone
Computer (desktop or laptop)
Figure 16
Figure 17
2008
2009
2010
2011
0% 10% 20% 30% 40% 50%
55 or older
45-54
35-44
25-34
18-24
Emerging markets
Mature markets
Total
U.S. Market
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Accenture has now researched consumer technology adoption among US consumers for four consecutive years. While some of the research areas have changed to stay consistent with the most contemporary issues and technologies, many have remained, which enables us to present some of the most interesting trends since our research began.
The trends in ownership of various devices in the US support Accenture’s global observation that newer technologies and technology upgrades are rapidly making
A Look at the US Marketcertain devices obsolete. For instance, mobile phone ownership has dropped from 79 percent in our 2008 report to 65 percent in this year’s report, while smartphone ownership has quadrupled from 8 percent to 32 percent in the same period (Figure 18). These same trends are apparent when comparing DVD player decline versus Blu-ray player growth, regular TV decline versus high-definition TV growth and VCR decline versus DVR growth. This power shift has occurred while the computer has remained ubiquitous but in slight ownership decline.
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The most-purchased consumer electronics in 2010 in the US include the computer, smartphone and high-definition TV. However, while about the same percent of consumers surveyed purchased a computer and high-definition TV in 2010 as in 2009, smartphones showed a significant jump in those purchasing one in 2010 versus 2009 (from 14 percent buying in 2009 to 22 percent buying in 2010).
The US data reflects flat to declining spending on consumer electronics amid the recession years. In fact, 2010’s spending virtually mirrored 2009, with slightly more consumers spending slightly lesser amounts in 2010 than in the prior year (Figure 19).
Among the newer technology-based activities across our four-year history is connecting on social networks. One of the most interesting findings here this year are the reasons for using social networks: The top two choices increased significantly in the past year, and they both involve strengthening existing relationships instead of creating new ones (Figure 20). As older individuals tend to be much less focused on making new friends than on keeping in touch with current ones, the increase in older generations’ use of social media may be influencing how these networks are being used.
Figure 18. US trends in consumer electronics ownership
0% 20% 40% 60% 80% 100%
Tablet PC
Health and Fitness device
3-D TV
E-book
Blu-ray player
Netbook
GPS device
Digital video recorder for TV
Portable gaming device
Digital video camera
VCR
Game console
Portable music player
High-definition plasma or LCD TV
Regular (CRT or tube) TV
DVD player
Digital photo camera
Web-enabled mobile phone/smartphone
Mobile phone
Computer (desktop or laptop)
Figure 16
Figure 17
2008
2009
2010
2011
0% 10% 20% 30% 40% 50%
55 or older
45-54
35-44
25-34
18-24
Emerging markets
Mature markets
Total
U.S. Market
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Figure 19. US spending on consumer electronics
Figure 20. US consumers' reasons for connecting on social networks
Figure 18
Figure 19
2007
2008
2009
2010
2010
2011
0% 10% 20% 30% 40% 50%
Don’t know
$3,000 or more
$1,500 to less than $3,000
$500 to less than $1,500
Less than $500
Have not spent any money on consumer electronicsin the past year
0% 20% 40% 60% 80% 100%
To play games
To further issues that are important to me
To sell things
To be engaged in local community
To write about and review products
To look for jobs
To plan social activities
To find out about products and services
To let others know my opinions
To connect with people who share common bonds
To inform others of personal news
To let others know what I'm doing
Network with current andformer colleagues
Make new friends
Stay in touch with friends
Reconnect with old friends
Figure 18
Figure 19
2007
2008
2009
2010
2010
2011
0% 10% 20% 30% 40% 50%
Don’t know
$3,000 or more
$1,500 to less than $3,000
$500 to less than $1,500
Less than $500
Have not spent any money on consumer electronicsin the past year
0% 20% 40% 60% 80% 100%
To play games
To further issues that are important to me
To sell things
To be engaged in local community
To write about and review products
To look for jobs
To plan social activities
To find out about products and services
To let others know my opinions
To connect with people who share common bonds
To inform others of personal news
To let others know what I'm doing
Network with current andformer colleagues
Make new friends
Stay in touch with friends
Reconnect with old friends
U.S. Market
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With so many activities becoming device agnostic, and people more willing (at least in emerging markets) to jettison what they perceive to be duplicative technologies, what does that mean for the growth of certain technologies? Will we begin to see a gradual “culling of the herd” where technologies considered obsolete or unnecessary will be disposed of altogether? Are single-purpose technologies (such as photo and video cameras) differentiated enough in purpose and quality to maintain their lifeline? Is the insatiable appetite for technology among emerging markets enough for all players in the consumer electronics industry to thrive?
Implications for the Consumer Technology Industry
While many questions regarding the growth of consumer electronics cannot be answered, one thing is clear: Not only is it becoming more difficult to predict the winners and losers in consumer technology, but it also is getting tougher to develop products that can appeal to an increasingly diverse global customer base with unique local needs and requirements.
To win in such a world, consumer technology companies must engage with consumers at the onset of, and throughout, the innovation process. Achieving high levels of engagement requires consumer technology companies to rethink how they manage innovation on a global basis.
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Maintaining product pipeline disciplineFor consumer technology companies, having a consistent end-to-end innovation process with clear stage gates and milestones is absolutely critical. Organizations need a good idea- generation process that leads to asking the right questions that can lead to the highest-quality, most refined ideas, so the company can decide on which ideas it will focus its scarce resources on and how.
For instance, at the start of an innovation process, a company could have 10 ideas. But it needs to quickly understand the risks and opportunities of each so that it can narrow the pool to the three ideas, or even one idea, in which it will invest money to create a new product. In Accenture’s experience, this is not common: Most consumer technology companies typically only loosely adhere to a consistent process and, even then, only for incremental innovations.
When it comes to the innovation process, high performers adhere to stage gates and actively attempt to optimize their end-to-end process to cut development cycle times. High performers have made huge leaps in their development cycle times by streamlining their innovation processes and, consequently, have been able to increase the number of new product launches.
High performers also tend to build a balanced portfolio of strategic short- and long-term incremental and groundbreaking innovation initiatives. In other words, while they know they must continue to develop products that “keep the lights on” today, they also recognize that they need to mix in some larger “big-bet” initiatives that, if successful, could completely change the game.
Minding the foundationFor example, consumer technology companies must pay particular attention to what Accenture considers the “foundational” elements of a robust innovation capability: innovation strategy, innovation leadership, customer understanding and idea sourcing.
Innovation strategy: Successful innovation requires a commitment to the company’s innovation strategy, which includes investing a substantial percentage of revenue in innovation activities and maintaining the investment level and commitment even during challenging economic cycles.
Innovation leadership: A significant contributor to innovation success is executives who are committed to innovation and who instill within their employees and throughout the organization a similar self-confidence and willingness to never stop innovating.
Customer understanding: In today’s dynamic world, superior innovation requires conducting a considerable amount of research on consumer behavior—not only traditional market research studies, but observational and ethnographic research as well.
Idea sourcing: As markets continue to get more competitive and the cost of developing new products continues to rise, consumer technology companies are challenged to look far beyond their research and development group for other sources of innovation—especially those outside the company, including ecosystem partners, academia and customers.
Distributing innovationInnovation is no longer the exclusive province of developed markets. A combination of investment, education and a strategic policy focus on new technologies has spurred the development of new clusters of innovation in emerging economies. In recent years, for example, we have witnessed the rise of nanotechnologies and biotech in Beijing, digital media and genomics in Seoul, biofuels in Brazil, and automotive technologies in Poland.
Excelling at innovation requires a focus not only on input factors (such as investment in R&D and education) but also on measuring output (such as the ability to produce valuable new products, services and business processes). For a business, unpacking innovation in this way is essential when making decisions about where to locate innovation functions.
Indeed, high-performance businesses are clearly aware that there are now many more innovation hubs and untapped sources of expertise outside their home markets. In fact, these companies typically source innovation from more than one country, which enables them to be “authentically local” while operating globally. In other words, when it comes to operating in local markets, high performers don’t just “switch the label on the can.” Instead, they immerse themselves in the markets to become part of the local business and social fabric, adapting their strategies, operations and products to meet local conditions and tastes. For consumer technology companies, such “distributed innovation” has become increasingly critical to creating products that reflect the disparity in preferences and needs in consumers from country to country.
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Executing consistently over timeThe consumer technology space is littered with “one-hit wonders”: companies that came up with a compelling product but were unable to sustain innovation to keep churning out new, desirable products over the longer term. In many instances, such lack of staying power was due to shortcomings in how the companies’ innovation functions were structured, measured and rewarded.
Accenture has found in its research as well as client work that one of the biggest keys to sustained innovation is a culture that tolerates risk, rewards failure and encourages continuous improvement. Without such a culture, breakthrough ideas are impossible to consistently and fully identify and capitalize upon. Furthermore, without the ability to measure past successes and estimate the future market impact of new products, companies will continue to “fly blind” and approach innovation as an ad hoc exercise.
For many consumer technology companies, succeeding as an integral part of the consumer lifestyle will require substantive rethinking of their innovation engines. By paying attention to the foundational elements, distributing innovation, remaining disciplined in the product development process and executing consistently over time, consumer technology companies can engage with consumers throughout the innovation process and appeal to the increasingly diverse and rapidly changing consumer needs and preferences highlighted in this report.
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Snapshots of Hot Technologies
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The tablet PC: The hot consumer electronic
The tablet PC is gaining market momentum. One need only look at the millions of sales of iPads and Galaxy Tab tablet computers since they were each launched in 2010 to know that this device is rapidly becoming popular among consumers.
According to Accenture’s research, 8 percent of consumers surveyed now own a tablet PC and about one-third of those individuals (3 percent total) purchased their tablet PC in 2010 (Figure 21). Eight percent of respondents globally plan to purchase a tablet PC in 2011—a purchase rate that would double tablet PC ownership globally in just one year.
BRIC market consumers are more enthusiastic purchasers of tablet PCs than are mature-market consumers. More than double the percentage of BRIC consumers currently own one, and double the consumers plan to buy one in 2011, than consumers in mature markets. But what is most astounding about tablet PC consumption is that nearly one-quarter of Chinese respondents (across ages within urban areas) currently own one. That is nearly three times the global average. The purchase rate in China was more than double the global average in 2010. And looking forward, China is potentially the strongest market for tablet PCs this year, with 18 percent of Chinese respondents planning to purchase one in 2011. If one does the math, tablet PC ownership would reach almost 40 percent of the urban adult population of China by 2012.
Figure 21. Tablet PC own, bought, plan to buy
Figure 21
Figure 22
China
India
Russia
Brazil
Japan
Germany
France
US
Total
Plan to buy a tablet PC within the next 12 months
Purchased a tablet PC in the past 12 months
Own a tablet PC
0% 20% 40% 60% 80% 100%
To sell things
To look for jobs
To write about and review products
To be engaged in my local community
To further issues that are important to me (i.e., political, environmental)
To plan social activities
To play games
To find out about products and services I plan to purchase
To let others know about my opinions (political, social, etc.)
To connect with people who share common bonds (e.g., music, new moms)
To make new friends, meet new people
To network with current and former colleagues
Reconnect with old friends
To stay in touch with friends
0% 5% 10% 15% 20% 25%
Russia
India
China
Brazil
US
Japan
Germany
France
Emerging markets
Mature markets
Total
U.S. Market
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Figure 22. Activities conducted on a tablet PC
Figure 23
Figure 24
BRIC markets
Mature markets
Total
Plan to buy a 3-D TV within the next 12 months
Purchased a 3-D TV in the past 12 months
Own a 3-D TV
0% 10% 20% 30% 40% 50% 60% 70% 80%
Tweeting or microblogging
Using custom or self-purchased applications
Services based on my location
Updating and checking my social network sites
Playing games
Using the applications that camealready installed on my tablet PC
Banking
Taking and/or managing photos
Listening to music
Reading books, newspapers, magazines
Watching videos
Checking email
Browsing the Web
0% 5% 10% 15% 20%
Russia
India
China
Brazil
US
Japan
Germany
France
Total
Although far behind China in consumption, India has the second-highest penetration of tablet PCs globally, with 10 percent of consumers owning one. Future growth for tablet PCs in India also looks strong: 10 percent of Indian respondents plan to purchase a tablet PC in 2011. Interestingly, Indian consumers seem less committed to the new technology than other countries. Five percent of those owning a tablet PC quit using it last year because they had the same functionality in another device (globally, the defection rate for tablet PCs was 2 percent).
The activities most often conducted on a tablet PC mirror those conducted on a laptop or desktop computer and include checking email, browsing the Web, watching videos, and reading books, newspapers and magazines (Figure 22). Emerging-market countries use their tablet PCs for a wider variety of activities than do mature-market countries. The largest differences are in tweeting and microblogging: 43 percent of emerging-market respondents use a tablet PC for microblogging, versus only 26 percent of tablet PC owners in mature-market countries.
People between 18 and 24 years of age conduct a greater number of activities on the tablet PC, including such things as email, games, banking, blogging, watching videos, listening to music and managing photos. Other generations lean more toward using the tablet PC for just a few applications, namely email, browsing the Web, watching videos and reading.
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3-D TV: What’s the real story?
The 3-D TV sits dead last among the consumer technologies in Accenture’s 2011 Power Rankings because only 3 percent of the survey population currently owns one (Figure 23). However, the 3-D TV also is predicted to have the highest change in purchase rate—a staggering 500 percent increase—in the next 12 months. So what’s the real scoop on the 3-D TV?
China once again stands out as the most enthusiastic consumer of new technologies. While 2 to 3 percent of consumers in most countries own a 3-D TV, double that amount own one in China. And growth plans for 3-D TVs in the BRIC markets are promising. During 2011, one-fifth of consumers in Brazil and India, 16 percent in Russia, and 14 percent in China plan to purchase a 3-D TV. This is in stark contrast to just 2 percent of consumers in Japan, 6 percent in France and Germany, and 8 percent in the United States.
Of those who don’t currently own a 3-D TV, overall interest in 3-D TV is split: 49 percent globally say they are interested in owning a 3-D TV and 51 percent say they aren’t. Interest is far greater among the younger generations: 63 percent of those 55 or older said they were not interested in 3-D TV ownership, versus 45 percent of those under 25 and 46 percent of those aged 25-34.
In addition, there is much more interest in 3-D TV among emerging-market consumers than mature-market consumers. Two-thirds of emerging-market respondents said they’d like to have a 3-D TV versus only 31 percent of mature-market respondents. This interest within emerging markets holds steady across generations. Digging deeper into these market differences, it’s clear that countries differ significantly in consumer interest in this device. For example, 69 percent of Chinese and 68 percent of Russians want or plan to own a 3-D TV, versus only one-fourth of US consumers and one-fifth of consumers in Japan.
Figure 23. Ownership of 3-D TV; plans to purchase 3-D TV
Figure 23
Figure 24
BRIC markets
Mature markets
Total
Plan to buy a 3-D TV within the next 12 months
Purchased a 3-D TV in the past 12 months
Own a 3-D TV
0% 10% 20% 30% 40% 50% 60% 70% 80%
Tweeting or microblogging
Using custom or self-purchased applications
Services based on my location
Updating and checking my social network sites
Playing games
Using the applications that camealready installed on my tablet PC
Banking
Taking and/or managing photos
Listening to music
Reading books, newspapers, magazines
Watching videos
Checking email
Browsing the Web
0% 5% 10% 15% 20%
Russia
India
China
Brazil
US
Japan
Germany
France
Total
U.S. Market
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As consumer electronics companies consider ways to increase demand for 3-D TVs, it appears price is the biggest lever that would drive more interest in this new device (Figure 24). Fifty-seven percent of respondents globally said they would be more inclined to purchase a 3-D TV if the price was within their budget. Finding a price within their budget was more significant among people under 24 years old than older people (64 percent versus 50 percent, respectively). And finding a price within budget is a bigger driver of 3-D TV purchase interest in emerging countries than in mature ones.
Other (but lesser) factors that would make consumers more inclined to purchase a 3-D TV include having greater availability of 3-D content and not having to wear 3-D glasses. Almost half (45 percent) of respondents in China and Germany said they’d be more inclined to buy a 3-D TV if they didn’t have to wear glasses. And also, in China, 63 percent said they’d be more interested in 3-D TV if there were more content available.
Figure 24. Factors that would make consumers more inclined to purchase a 3-D TV
Figure 25
Figure 24
0% 10% 20% 30% 40% 50% 60% 70% 80%
I have no interest in 3-D television
If I did not have to wear 3-D glasses
If there were more 3-D content available
If they were easier to use
If 3-D televisions were available in my market
If the price were within my budget
55 or older
45-54
35-44
25-34
18-24
Emerging markets
Mature markets
Total
U.S. Market
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Social networking: A hot pastime
In a typical week, 39 percent of consumers surveyed across geographies and age groups connect with friends using social media (Figure 25). Despite the rise of well-known US-based brand Facebook, the US is not where social networking is most extensive. Russia and Brazil lead other countries in their social media use. In fact, 54 percent of Russian respondents connect to social networks in an average week and half of those in Brazil do as well. In the US, just less than half of respondents (46 percent) connect on social media sites in an average week.
While more younger-generation consumers are using social media, it’s not purely a younger-generation activity. One-third of those 45 to 54 years of age connect on social media weekly and more than one-quarter of those 55 years or older do so. The age gap in social media activity is significantly smaller in BRIC markets than in the US, Japan, Germany or France. In the BRIC markets, 51 percent of those 18-24 connect, but 42 percent of those over 55 do so as well.
Figure 25. Percentage of respondents connecting to social media in a typical week
Figure 20
0% 10% 20% 30% 40% 50% 60%
Russia
India
China
Brazil
US
Japan
Germany
France
Total
U.S. Market
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At an aggregate level, the reasons respondents cited for using social media are largely social versus commercial: to stay in touch with friends (82 percent) and to reconnect with old friends (71 percent). Across our global sample, few respondents indicated that they used social media for commercial reasons such as to sell things or look for a job, or as a platform to further their opinions and causes. In fact, only 20 percent use social networking to write about and review products and 22 percent use it to further issues important to them (Figure 26).
However, BRIC countries have a broader number of uses for social networking than mature-market countries. In addition to connecting with friends, consumers in China and Brazil, in particular, more frequently use social networking to sell things, look for jobs, further issues important to them and write about and review products.
Figure 26. Activities done on social media
Figure 21
Figure 22
China
India
Russia
Brazil
Japan
Germany
France
US
Total
0% 20% 40% 60% 80% 100%
To sell things
To look for jobs
To write about and review products
To be engaged in my local community
To further issues that are important to me (e.g., political, environmental)
To plan social activities
To play games
To find out about products and services I plan to purchase
To let others know about my opinions (political, social, etc.)
To connect with people who share common bonds (e.g., music, new moms)
To make new friends, meet new people
To network with current and former colleagues
Reconnect with old friends
To stay in touch with friends
U.S. Market
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Smartphones: The strong utility player on the device team
At number 10 in the Power Rankings, the smartphone is expected to remain strong in both purchase and use in 2011. Globally, more than one-fourth of the survey population owns a smartphone (Figure 27). China, again, is the geography with the most enthusiastic consumption: More than one-half of Chinese respondents in our survey currently own a smartphone, compared with one-third of US respondents. Chinese enthusiasm is fairly new as well. Thirty-seven percent of Chinese respondents purchased their smartphones in 2010 (representing more than half of those who now own one). And smartphones are predicted to be the most-purchased device in China in 2011, with 38 percent planning to buy one.
Smartphones are expected to have the second-highest purchase rate among consumer electronics in 2011. About one-quarter of respondents plan to purchase one in 2011 (Figure 28). In addition to China, the smartphone is predicted to be the most-purchased device in India and Russia and the second-most purchased device in Brazil, Germany, the US and France.
Besides making phone calls, the smartphone applications rated most valuable to consumers are texting, taking photos, checking email and browsing the Web (Figure 29). These activities are all more important to younger generations than older ones.
In addition, consumers of different economies also have different interests in smartphone applications. Listening to music was a more popular smartphone activity in emerging markets (led by younger generations).
Figure 27. Smartphone ownership
Figure 26
Figure 24
0% 10% 20% 30% 40% 50% 60%
Russia
India
China
Brazil
US
Japan
Germany
France
Total
U.S. Market
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Reading books, magazines and newspapers was a top smartphone application for 13 percent of emerging-market respondents, compared with just 3 percent of those in mature markets.
Mature-market countries exhibit big differences in application preferences between younger and older generations. In these countries, more than half of adult consumers under 25 years old ranked texting as a top-three smartphone application, while only 21 percent of those over 55 did so.
While consumer interest in smartphones is high, competition among various smartphone alternatives is extensive as well. So how can consumer electronics companies recoup innovation investments, protect margins and capture growth in this fiercely competitive, rapidly growing market? Accenture’s data indicates that commanding a premium for ever-faster and smarter smartphones could be tough. Just over one-third of respondents said they would not be willing to pay a premium for any of the five enhanced capabilities we queried about (Figure 30). In fact, respondents were evenly divided about what, if anything, warranted a premium price. Older generations were far less interested in paying a premium for enhanced smartphone capabilities. And consumers in mature markets are far less willing to pay for various enhancements to smartphones than emerging markets. Fifty-nine percent of mature-market respondents said they would not pay a premium for enhanced Web browsing, thousands more applications, enhanced location awareness, faster downloading or enhanced touchscreen. This compares with only 17 percent of those in emerging markets.
Figure 28. Smartphone purchasing trends
Figure 27
Figure 24
Russia
India
China
Brazil
US
Japan
Germany
France
Total
0% 5% 10% 15% 20% 25% 30% 35% 40%
Plan to purchase a smartphone in 2011
Purchased a smartphone in 2010
U.S. Market
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Figure 29. Top 3 most valuable smartphone applications
Figure 28
45-54 years
35-44 years
25-34 years
18-24 years
55 or older
Total
Mature markets
45-54 years
35-44 years
25-34 years
18-24 years
55 or older
Emerging markets
0 10 20 30 40 50 60
Other
I do not own a mobile phone/smartphone
I just use my mobile phone/smartphone to make phone calls
Services based on my location (e.g., GPS or maps/directions, restaurant suggestions)
Using custom or self-purchased applications (e.g., applications that did not come as standard on your device, but rather were downloaded or purchased separately)
Taking photos
Playing games
Reading books, newspapers, magazines
Listening to music
Shooting videos
Updating and checking your social network sites
Tweeting
Watching videos
Banking
Browsing on the Web
Texting/text messaging
Checking email
0 10 20 30 40 50 60
Other
I do not own a mobile phone/smartphone
I just use my mobile phone/smartphone to make phone calls
Services based on my location (e.g., GPS or maps/directions, restaurant suggestions)
Using custom or self-purchased applications (e.g., applications that did not come as standard on your device, but rather were downloaded or purchased separately)
Taking photos
Playing games
Reading books, newspapers, magazines
Listening to music
Shooting videos
Updating and checking your social network sites
Tweeting
Watching videos
Banking
Browsing on the Web
Texting/text messaging
Checking email
Figure 28
45-54 years
35-44 years
25-34 years
18-24 years
55 or older
Total
Mature markets
45-54 years
35-44 years
25-34 years
18-24 years
55 or older
Emerging markets
0 10 20 30 40 50 60
Other
I do not own a mobile phone/smartphone
I just use my mobile phone/smartphone to make phone calls
Services based on my location (e.g., GPS or maps/directions, restaurant suggestions)
Using custom or self-purchased applications (e.g., applications that did not come as standard on your device, but rather were downloaded or purchased separately)
Taking photos
Playing games
Reading books, newspapers, magazines
Listening to music
Shooting videos
Updating and checking your social network sites
Tweeting
Watching videos
Banking
Browsing on the Web
Texting/text messaging
Checking email
0 10 20 30 40 50 60
Other
I do not own a mobile phone/smartphone
I just use my mobile phone/smartphone to make phone calls
Services based on my location (e.g., GPS or maps/directions, restaurant suggestions)
Using custom or self-purchased applications (e.g., applications that did not come as standard on your device, but rather were downloaded or purchased separately)
Taking photos
Playing games
Reading books, newspapers, magazines
Listening to music
Shooting videos
Updating and checking your social network sites
Tweeting
Watching videos
Banking
Browsing on the Web
Texting/text messaging
Checking email
U.S. Market
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Figure 30. Willingness to pay a premium for smartphone enhancements
Figure 29
Figure 24
55 or older
45-54
35-44
25-34
18-24
Emerging markets
Mature markets
Total
0% 10% 20% 30% 40% 50% 60%
None of the above
Faster downloading and data access
Enhanced location awareness (e.g., your smartphone would know where you are and can provide local information on your current surroundings)
Higher-resolution touch screen
A more enhanced Web browsing experience
Thousands more applications
Copyright © 2011 Accenture All rights reserved.
Accenture, its logo, and High Performance Delivered are trademarks of Accenture
This document is produced by consultants at Accenture as general guidance. It is not intended to provide specific advice on your circumstances. If you require advice or further details on any matters referred to, please contact your Accenture representative.
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