Changing purchasing attitudes for consumer computing are leading to a new ICT paradigm

Moving from 2010  into 2011 there is a fundamental shift towards the new ICT paradigm of cloud computing.  We have device manufacturers’ forecasts showing that for the first time the cloud client devices, indeed the smartphones alone, will be shipped in a number exceeding the number of personal computers (see Part I. of the below article). Consumer research published recently has also shown that for the first time the attitude of the customers turned to mobile devices from the destops in the US (see Part II. below). A comprehensive research study just  published is providing an even more general  picture by covering all possible consumer devices and all the largest geographies (see Part III. below).  Its conclusion is even more radical:

“The research findings raise the question as to whether, in the long run, desktop and laptop PCs in the home will be increasingly replaced by a group of newer technology alternatives such as tablet computers, netbooks, smartphones and e-book readers. ,” said Kumu Puri, senior executive with Accenture’s Electronics & High-Tech Practice. “If strength is measured by unit sales, the computer will remain the strong consumer technology giant for many years. Our research found that 93 percent of survey respondents own a computer—a higher proportion than any of the 19 technologies included in the survey. But if measured by growth rate, the PC market–at least for consumers–has reached a level of saturation and will continue to see diminished growth rates. There’s increasing potential for an end in sight for the relevance of the personal computer in the home as we know it today.”

Worth to read along with this: Gartner: media tablets are the new segment next to mobile PCs and desktops, as well as web- and app-capable mobile phones [April 16, 2011]

Part I.  Cloud client devices are surpassing personal computers in 2011

Information and Communication Technologies (ICT) are fast changing from a computer-centered era of the past 60+ years into a new one based on an ICT cloud where the resources shared by everybody are behind the so called cloud covering smaller or bigger data centers, different hosting centers, or even servers in your closet connected to the Internet. All fueled by 3.5G/3.9G, SoC & reflectivity. See the links on the right sidebar:

Consequently our clients are fast changing as well. You no longer need a fully equipped PC or notebook to serve your personal computing needs. As small device as the contemporary smartphone is sufficient to feel yourself empowered by the ICT cloud. We even had media tablets in 2010, like the pioneering Apple iPad, which are serving your cloud content consumption needs. And then all those classic devices, the PC, the notebook, the netbook etc., that you were accustomed to in the recent pre-cloud era, have just started to be transformed into something else to fit cloud authoring and consumption as well. Dell Inspiron Duo and Toshiba Libretto are good examples of that from 2010.

Now look at the client device numbers to get a feeling of the upcoming fundamental changes:
- It’s Official: 2010 the Biggest Year in Xbox History [Jan 13, 2011] (emphasis is mine)

December Xbox 360 console sales remained strong, with 1.9 million units sold, our biggest month ever in the history of Xbox 360.

Last week at the 2011 Consumer Electronics Show in Las Vegas, Microsoft ended the year with 50 million Xbox 360 consoles sold worldwide since launch [unveiled on May 12, 2005], 30 million active Xbox LIVE members and 8 million Kinect sensors sold in just the first 60 days on the market.

- One on One: Ballmer says Xbox, Kinect are key products [Jan 17, 2011] (emphasis is mine)

Q: You sold 8 million Kinects over the holidays, more than you expected. What differentiates it from other gaming consoles on the market?

A: Xbox isn’t a gaming console. Xbox is a family entertainment center. It’s a place to socialize. It’s a place to watch TV. We have Hulu coming. It’s the only system where you are the controller. Your voice, your gestures, your body.

- E-Ink Holding’s forecast for e-readers: 10 million in 2010 — 20-25 million in 2011
- Amazon Kindle devices shipped: 2.4  million in 2009,  8 million in  2010 (1.6 million in December 2010 alone, nearing rival iPad shipments in that month)
- Global e-book readers by Digitimes Research (in millions):

2010

2011

2012

2013

11.4

18.21

24.31

29.03

- Gartner forecast for media tablets (in thousands):

2010

2011

2012

2013

19,490

54,781

103,425

154,150

- Digitimes Research representing the forecasts of the device manufacturers (in millions):

Year

Smartphones

Tablet PCs

Notebooks

2011

440 total (281 in 2010) 131 Android 123 Symbian 74 iPhone

44 iPad (15 in 2010) 20-30 non-iPad ;
March’11:
35-40 iPad,
20-25 non-iPad
(60 in total)

227 Top 9 ;
March’11:
Q1 sales are lower than the forecasts

2013

800

100

300

And here is a graph of the above smartphone trends to make things even more visible:

Smartphones [to be] manufactured in 2010 and 2011

Update regarding the changing TV market:
- Global LCD TV Market to Grow 31% in 2010, Slowing to 13% in 2011 [DisplaySearch press release, Jan 3, 2011]

According to the latest DisplaySearch Quarterly Advanced Global TV Shipment and Forecast Report, total TV shipments in 2010 will reach more than 247 million units, a staggering 17% increase from 2009 and the best growth seen since the start of the flat panel TV transition.

LCD continues to dominate TV shipments worldwide, accounting for at least half of all TV shipments in all regions except Asia Pacific. … LCD TV shipments will rise from 190 million in 2010 to 215 million in 2011, although an increase in the rate of ASP erosion will lead to the first ever revenue decline in the LCD TV category. Japan has been a spotlight market for LCD TV growth in 2010, with LCD TV shipments forecast at 22.6 million units, an increase of 80% from 2009 due to the Eco-Points stimulus program. That program will end in 2011, so shipments are expected to fall sharply. European shipments have been fairly robust in 2010, but growth will fall from double- to single-digit rates over the next few years. Also a first in 2011, emerging regions will overtake the developed regions (Japan, North America, and Western Europe) in total LCD TV unit volume as the growth focus shifts to countries with lower flat panel TV penetration.

Figure 1: Worldwide TV Market by Technology

Source: DisplaySearch Quarterly Advanced Global TV Shipment and Forecast Report

- Connected TVs Forecast to Account for 21% of Global TV Shipments in 2010 [DisplaySearch press release, Dec 30, 2010]

While the consumer electronics industry prepares its wares for the CES in Las Vegas, the foundations of a quiet revolution in TV viewing continue to be built, with 21% of all TVs shipped in 2010  [52 million] forecast to have internet connectivity. According to the DisplaySearch Q4’10 Quarterly TV Design and Features Report, the category is forecast to grow to over 122 million in 2014.Growth of connected TVs was fueled by the Japanese market in 2010 with strong market growth driven by the Eco Points system, and very high penetration of connected TVs, driven by domestic brands’ strategies and by high levels of broadband access. Emerging markets will play a key role in the future growth of this segment, with Eastern Europe forecast to grow from 2.5 million connected TVs shipped in 2010 to over 10 million in 2014. DisplaySearch findings also suggest that 12% of flat panel TVs sold in China in 2010 will have internet capability.

Figure 1: Connected TV Shipment Forecast

Source: DisplaySearch Quarterly TV Design and Features Report

“The looming risk now is what happens if every connected TV gets used,” said Paul Gray, Director of European TV Research. “With Netflix accounting for 20% of peak internet traffic in the US, it’s reasonable to ask if the infrastructure can cope. Set makers need to understand that broadband access does not scale endlessly like broadcast reception.”

It is expected that the connected TV market will diverge, with basic sets carrying enhanced broadcast services such as Hbb.TV and YouView, while the Smart TV segment will enjoy configurable applications, sophisticated search and navigation engines, and advanced user interfaces.

While there is no accepted definition for Smart TV, most have a few key features:

  • Capable of upgrades and changes to functionality by the consumer, typically by loading applications
  • Able to receive content from the open internet, not just within a “walled garden” defined by a portal
  • Possesses an advanced user interface or content discovery engine, to permit rapid discovery and selection of content to watch (but not via a browser and typed search terms as in PCs)
  • Able to communicate with other networked devices in the home via open standards (e.g. DLNA)

Smart TVs are not limited to a specific operating system, and Linux (MeeGo) and Android (Google TV) platforms will be joined by others. Google is working with Sony and Logitech for the launch of Google TV, but expect many more entrants in 2011.

“Current shipment levels combined with consumer feedback suggests that Google TV is not yet the Smart TV of people’s dreams,” Gray added. “While adding internet capabilities into the TV is powerful, it needs to be as effortless as channel surfing. However, Google TV has given a good lead into what works.”

- 3D TV Forecast to Reach 3.2 Million Global Shipments in 2010 and 91 Million in 2014 [DisplaySearch press release, Jan 4, 2011]

The availability of 3D content will remain the greatest determinant of the value of 3D TVs to consumers – and as a result its achievable premium in TV sets. 3D TVs were launched with much fanfare at IFA 2009, but a year ago at CES, the first real products reached the market. Since then, shipments have made steady, although slightly disappointing, progress. Global shipments in 2010 were expected to total 3.2 million worldwide, according to the DisplaySearch Quarterly TV Design and Features Report.“TV manufacturers really got ahead of themselves in 2010, and they forgot that a TV is a tool to watch content,” said Paul Gray, Director of TV Electronics Research at DisplaySearch. “People will only buy a 3D TV if there is enough content to watch, and in 2010, there simply was not enough 3D content available. As a result, only 4% of TVs 40” and larger had 3D capabilities.”

Despite this, competitive pressures in the industry are rapidly making 3D a compulsory feature. DisplaySearch forecasts that nearly18 million 3D sets will be shipped in 2011, rising to over 91 million in 2014.

“TV set makers are strongly committed to 3D, and they expect their strong lead to encourage content creators to follow,” Gray added. “Weakness in the North American TV market was largely to blame for slow 3D shipments, although our research shows that only 40 3D Blu-ray disc titles were available across all genres at the end of 2010.”

Figure 1:  Forecast 3D TV Unit Shipments (000’s) by Region

Source: DisplaySearch Q4’10 Quarterly TV Design and Features Report

The DisplaySearch Quarterly TV Design and Features Report also examines systems with 3D passive glasses, which launched in China in December 2010 and are expected to be featured at CES. These are being offered as an alternative to the existing shutter glasses types, which have significant drawbacks, including high costs, weight, the need for re-charging, and limited interoperability.

“What is disturbing, though, is the prospect of a format war,” said Gray. “It would be very damaging and consumers would opt to wait if they sense obsolescence, especially when they are already cautious about spending.”

Part II. Mobile PCs to gain over desktops in US

US Consumers More than Twice as Likely to Buy Portable Computers as Desktops in the Next Six Months [Dec 28, 2010]. A survey conducted in August 2010 by ABI Research revealed that (emphasis is mine):

… while desktops are the most common type of computer in consumers` homes, consumers are more than twice as likely (35%) to buy laptops (notebook PCs), netbooks, or media tablets than desktops in the next six months.

… the survey shows changing attitudes across all classes of computing devices.

Price remains the most important criterion for laptops because most new laptops purchased at retail will perform most functions that a typical user wants so price is seen as critical.

But for desktops, which are often priced lower (per spec) than laptops, respondents picked processor speed, memory, and storage capacity above price. Consumers perceive these computers as offering processing power and plenty of storage, perhaps acting as the central hub for a digital library.

Primary research director Janet Wise added, “In netbooks, much media attention has been devoted to the processors because this often has an impact on users’ experience. So the majority of consumers cite processor speed as a netbook`s most important feature. . As well as a definite shift to laptops, there is greater overlap between netbook and laptop segments.”

Cost figures even further down the list of important criteria for media tablets, outranked by processor speed, screen resolution, memory, screen size, storage and operating system.

ABI Research’s “Consumer Technology Barometer: Home Computing (Q3 2010)” is a primary research-based tracking study that provides insight into the US consumers’ attitudes, awareness, usage patterns, purchase intentions and purchasing criteria for desktop computers, laptops, tablets, and netbooks.

Part III. Newer consumer technologies are gaining over personal computers and basic mobile phones

The report
Finding Growth:  The Emergence of a New Consumer Computing Paradigm [Jan 3, 2011]
The 2011 Accenture Consumer Electronics Products and Services Usage Report (emphasis is mine):

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 and use of consumer technologies among key generations and to gain deeper insights into global differences.

For the 2011 research Accenture conducted a quantitative online consumer study comprising 8,002 interviews across eight countries: U.S., 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. New to this year’s research is Accenture’s 2010 Consumer Technology Power Rankings, which ranks the year’s most pervasive consumer technologies and their projected rate of growth.  The rankings bring particular insights into consumer’s intentions relative to the newest and fastest growing technologies.  One of the fascinating rankings reveals that while the growth rate of personal computers is expected to decline, the growth rate of tablet PCs is expected to increase by 160 percent.

Read the Full Report:  Finding Growth:  Emergence of a New Consumer Technology Paradigm [dowwloadable free of charge]

To illustrate the outstanding value of this 44-page free report here is the table of contents and the list of figures in a combined form:

Accenture_GlobalConsumerTech_2011

The press release
Consumers’ Purchases of Computers and Mobile Phones Will Decline While Purchases of Newer Consumer Technologies Will Soar, New Accenture Survey Finds [Jan 4, 2011]. (Emphasis is mine):

A new Accenture (NYSE: ACN) survey predicts that consumer purchase rates for personal computers and mobile phones (excluding smartphones) will decline by 39 percent and 56 percent this year compared with last year, respectively. By contrast, buying rates of 3DTVs (three-dimensional TVs) are expected to rise 500 percent; tablet computers 160 percent; ebook readers 133 percent; and smartphones 26 percent.

The annual survey focused on usage and spending on 19 different consumer electronics technologies among more than 8,000 consumers in eight countries in both emerging markets and developed economies: Brazil, China, India, Russia, France, Germany, Japan and the United States.  Survey respondents in emerging countries represent key urban markets rather than the population as a whole.

The survey found that only 17 percent of survey respondents plan to buy a desktop or laptop computer in 2011– a 39 percent drop from 2010.  Tracking with this trend, the survey revealed that 75 percent of U.S. survey respondents emailed each week from their PCs in 2010, down from 80 percent the year before. The research also showed that respondents are using multiple devices such as tablet PCs for activities that used to be done on traditional PCs.  For example, on at least a weekly basis, 40 percent of the respondents email from a tablet PC. In addition to checking email, respondents are using tablet PCs for browsing the web, watching videos and reading books, newspapers and magazines.

The research findings raise the question as to whether, in the long run, desktop and laptop PCs in the home will be increasingly replaced by a group of newer technology alternatives such as tablet computers, netbooks, smartphones and e-book readers,” said Kumu Puri, senior executive with Accenture’s Electronics & High-Tech Practice. “If strength is measured by unit sales, the computer will remain the strong consumer technology giant for many years. Our research found that 93 percent of survey respondents own a computer—a higher proportion than any of the 19 technologies included in the survey. But if measured by growth rate, the PC market–at least for consumers–has reached a level of saturation and will continue to see diminished growth rates. There’s increasing potential for an end in sight for the relevance of the personal computer in the home as we know it today.”

The research also found that ownership of basic mobile phones dropped from 79 percent in 2009 to 65 percent in 2010. In the same period, ownership of smartphones quadrupled from eight percent to 32 percent. In the survey, mobile phones were described as having basic voice capability but not the enhanced features available on smartphones, such as surfing the Internet.

3D TVs

Unlike purchases of PCs and mobile phones, purchase rates of 3D TVs are expected to grow this year at the fastest rate–500 percent—of all 19 technologies included in the survey.  As con­sumer electronics companies consider ways to increase demand for 3D TVs, price emerged as the biggest lever for driving greater interest in this new technology product.  According to the survey, 57 percent of respondents said they would be more inclined to buy a 3D TV if the price were within their budget.  Finding this price point was more significant among respondents under 24 years old (64 percent) than respondents who were older (50 percent).  Other factors respondents said would make them more inclined to buy a 3D TV included having greater availability of 3D content and not having to wear 3D glasses.

China

Among respondents in all eight countries surveyed, Chinese consumers were among the most enthusiastic purchasers and users of the latest consumer technologies. While two percent to three percent of respond­ents in most countries own a 3D TV, twice that many Chinese respondents say they own one. Sixty-nine percent of the nation’s respondents want or plan to own a 3D TV, compared with only one-fourth of U.S. consumers and one-fifth of Japanese consumers.

Chinese respondents are big users of smartphones, the survey revealed.  More than half (53 percent) of Chinese respondents currently own a smartphone versus one-third of U.S. respondents.  Furthermore, smartphones are predicted to be the most purchased device in China next year, with 38 percent of those surveyed planning to buy one.

For a copy of the complete set of survey findings, please visit www.accenture.com/ConsumerTech2011.

Methodology

The survey, conducted in October and November of 2010, sought to cover a demographically representative sample across all geographies. The annual research began as a U.S. study in 2008 and grew to a global study in 2010. For the 2011 report Accenture conducted a quantitative online consumer study consisting of surveys of 8,002 consumers in eight countries: Brazil, China, France, Germany, India, Japan, Russia and the United States. In Brazil, China, India and Russia the sample is representative of urban and semi-urban populations. Survey respondents were asked about the following 19 technologies: computers, mobile phones, digital photo cameras, DVD players, regular TV, high definition TV, portable music players, game consoles, VCRs, smartphones, GPS, digital video cameras, portable gaming devices, digital video recorders, netbooks, BluRay players, tablet computers, ebook readers, and 3D TVs. To calculate the change in annual purchasing rates, Accenture first subtracted the percentage who purchased in 2010 from the percent who intend to buy in 2011. That total was divided by the percentage who purchased in 2010.

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About Nacsa Sándor

Lazure Kft. • infokommunikációs felhő szakértés • high-tech marketing • elérhetőség: snacsa@live.com Okleveles villamos és automatizálási mérnök (1971) Munkahelyek: Microsoft, EMC, Compaq és Digital veterán. Korábban magyar cégek (GDS Szoftver, Computrend, SzáMOK, OLAJTERV). Jelenleg Lazure Kft. Amire szakmailag büszke vagyok (időrendben visszafelé): – Microsoft .NET 1.0 … .NET 3.5 és Visual Studio Team System bevezetések Magyarországon (2000 — 2008) – Digital Alpha technológia vezető adatközponti és vállalati szerver platformmá tétele (másokkal együttes csapat tagjaként) Magyarországon (1993 — 1998) – Koncepcionális modellezés (ma használatos elnevezéssel: domain-driven design) az objektum-orientált programozással kombinált módon (1985 — 1993) – Poszt-graduális képzés a miniszámítógépes szoftverfejlesztés, konkurrens (párhuzamos) programozás és más témákban (1973 — 1984) Az utóbbi időben általam művelt területek: ld. lazure2.wordpress.com (Experiencing the Cloud) – Predictive strategies based on the cyclical nature of the ICT development (also based on my previous findings during the period of 1978 — 1990) – User Experience Design for the Cloud – Marketing Communications based on the Cloud
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