On track to reach $2.9 trillion by 2020, the global consumer electronics market is flourishing right along with the technological advancements that support it. In fact, according to Persistence Market Research, the growth prospects for the market are downright “staggering,” thanks mainly to brisk sales of smartphones, wearables, and smart home devices.
“Growing preference for usage of electronic devices in daily chores is primarily driving the market for consumer electronics,” the research firm reports. “Soaring internet penetration and increasing disposable income are allowing consumers to use multiple electronic devices. This will continue to fuel the market growth over the next few years. Rapid adoption within a short span from their inception is a prominent factor indicating the potential of wearable electronics adoption.”
Holiday Shoppers Love Electronics
Jack Cutts, director of industry and business intelligence at the Consumer Technology Association (CTA), says a clearer picture of the key consumer electronics growth areas began to emerge during fourth-quarter 2017, right around the same time online and offline retailers started gearing up for the holiday selling season.
For the first time ever, more consumers planned to use smartphones (61 percent) to do their online holiday shopping compared to any other device, including laptops (54 percent) and desktop computers (46 percent), during the month of November, according to the group’s 2017 Pre-Black Friday Survey. The CTA also found that one in five online U.S. adult shoppers planned to use voice-activated smart speakers, such as an Amazon Echo or Google Home, to shop online during the holiday season.
Additionally, 2017 also is the first year that more Americans planned to shop on Cyber Monday (across all channels) than on Black Friday. According to the CTA, tech was the second most frequently purchased type of gift (56 percent), closely following clothing and accessories (63 percent), while surpassing toys (43 percent). The top five tech products shoppers planned to buy are videogame consoles, smartphones, TVs, laptops, and tablets.
Emerging consumer technology is also seeing a boost right now. A record 79 million U.S. adults planned to purchase a consumer tech gift for their loved ones or colleagues during the holiday season, with some of the most popular including drones, smart home devices, digital assistant devices like Alexa, home cameras, and smart thermostats.
VR and AR Come of Age
Cutts says the CTA is also seeing healthy sales of products that incorporate both virtual reality (VR) and augmented reality (AR). Virtual reality is a three-dimensional, computer generated environment that can be explored and interacted by a person, while augmented reality incorporates live direct or indirect views of physical real-world environments that are “augmented” with superimposed computer-generated images over a user’s view of the real-world.
“Virtual reality and augmented reality are becoming more centered around ‘mixed reality,’” Cutts explains. “That happens when a device incorporates both virtual and augmented realities.”
He points to Google Glass as one example of this “blending” in action, noting that when the product is transparent it can superimpose information and notifications over the user’s field of vision (AR) and also completely subsume that user’s field of vision to immerse him or her in a different reality (VR).
“Mixed reality is simply a product that can play in both fields,” says Cutts, “and most analysts, myself included, feel like mixed reality is probably where the future lies.”
He sees potential for this mix of advanced technology in the medical field, where surgeons can use such products to receive useful tips and reminders (e.g., blood pressure and vital sign readings) superimposed over a patient’s body while performing an operation such as open-heart surgery.
The combination of VR and AR also has high potential in the commercial space, where adding virtual elements to work environments can make people more productive. (A chef, for example, who wears glasses that visualize temperatures, tastes, and aromas in a kitchen.) This might allow the chef to look at a dish and know it is too salty or cold, John Spacey writes in 7 Examples of Mixed Reality.
It can also be used to improve marketing and sales with tools that allow customers to visualize products in real environments. For example, the ability to see a couch in your living room before you order it, Spacey adds.
“The applications of augmented reality in the commercial space are virtually unlimited,” Cutts concludes, “and a lot of them really lend themselves to amazing cost savings, safety improvements, and myriad other benefits.”
4K TVs Gain Traction
The way younger generations consume TV content may be changing, but the overall market for such equipment remains strong. According to the CTA, U.S. sales of 4K TVs reached 4.5 million units during the 2016 holiday season, driving total 4K UHD sales for 2016 to 10 million units, a healthy 40-percent increase over 2015.
And sales of 4K UHD TVs continue to increase as more brands and screen sizes are available at lower prices, new technologies such as High Dynamic Range (HDR) and Wide Color Gamut (WCG) are more widely available, and consumer demand grows.
“We’re seeing strong uptake in 4K TV sets right now,” says Cutts, noting that the group estimates 4K Ultra HDTVs will reach 3.2-percent revenue growth in 2017 and account for $321 billion in retail revenue ($251 billion wholesale). “We’re excited about that; the more sets that are sold — especially 4K and those with HDR capabilities — the more we’ll see the [4K] content being published that consumers can enjoy on those sets.”
Over time, Cutts expects an overall shift away from LCD and LED TV sets as more consumers shift to high-dynamic options that offer pictures with a wider range of contrast (from darker blacks to deeper whites), while preserving fine color and grayscale detail in both the darkest and brightest portions of the picture.
“At this point, anyone who is in the market for a TV at the $400-plus price points is probably getting a few 4K sets in his or her search results,” Cutts points out. “As a result, more people are starting to consider these products.”
Not Your Grandfather’s Medical Alert Device
Potential for the consumer electronics segment goes well beyond immersive gaming experiences and great TV picture quality. For example, nearly 90 percent of older adults entering retirement wish to remain in their homes as they age, according to the National Aging in Place Council. At the same time, the country’s housing stock is not designed for aging in place, and it can be expensive to renovate. As a result, technology that can help older adults live without limits while remaining safe is in high demand.
Medical Guardian is one company that’s delving into this lesser-known segment of consumer electronics with its new medical alert device. Matt Guerrieri, vice president of marketing, says the product is a wearable technology designed to help aging adults go about their lives with easy access to emergency care — and without using frightening “I need help!” messaging.
The device, which will be released in 2018, tracks vitals and other data to help caregivers and loved ones spot warning signs. It also buzzes with medication reminders.
“We want to eliminate the stigma that has plagued the industry since the time of those old commercials that depict helpless seniors asking for help,” Guerrieri says, noting that today’s sophisticated medical alert devices can save a life, help lower healthcare costs, and reduce the length of hospital stays. “Our goal was to create a solution that someone can use daily to get reminders, receive calendar invites, or even just check the weather.”
Guerrieri sees good potential for marketers in the medical-oriented consumer electronics space, where his firm is currently negotiating a number of partnerships that will be announced in 2018. With a Costco partnership already in place, Medical Guardian is currently the only medical alert system sold by the large retailer.
“We hope to grow that even further,” says Guerrieri, “while continuing to come out with even more innovative products that are targeted at the U.S.’s aging demographic, which is expected to experience extreme growth over the next few years.”
Putting Video on Steroids
Aurangzeb Khan, founder and CEO of Altia Systems, the creator of the PanaCast 2 Panoramic-4K 180° plug-and-play video camera, is putting video on steroids by making it more immersive and interactive than ever. By incorporating artificial intelligence (or “intelligent vision”) and 3D into the mix, Khan says companies like Altia are fulfilling consumers’ growing appetite for fully-immersive tech-based experiences.
“We’re creating devices that give users a 180-degree experience, where all that post-production is done in real-time, inside the device,” says Khan. “The output comes out fully stitched and ready for use, and in a very high-quality 4K pixel density.”
This allows users to enjoy the experience immediately, he notes, without having to spend hours or days creating the content. He expects the immersive nature of the content to drive more consumer excitement and usage in settings like concerts, sporting events, and live broadcasting events.
Supported by innovative technology, Altia’s pumped-up video approach could alter the way people view, consume, and edit video. Historically, cameras have come with one lens and an imager. Getting a very wide field of view required a highly-distorting lens like fisheye lenses or anamorphic lenses.
“We took a completely different approach and built a system which consists of an array of cameras, where each camera has a normal, non-distorting field of view,” Khan explains. “Then, we use both computer vision and imaging science technologies to stitch them in real time.”
Khan says these techniques support powerful consumer engagement. For example, a car manufacturer can use it to create an experience that draws customers in by putting them in the driver’s seat on a test track. “That experience becomes a way to associate or affiliate with that brand,” says Khan. “That’s pretty powerful in that it helps to tell a story in a more compelling and enriching way.”
The Wrong Advertising Approach
As he looks around at how consumer electronics companies are spreading the word about their new and existing innovations, Doug Garnett, founder and CEO at Portland, Ore.-based Atomic Direct, says some — but maybe not nearly enough — are turning to TV to do it. Both Amazon and Google, for example, have substantial presences on TV, which they’re using to promote their brands and their individual products.
“When Amazon has an interesting, new electronic product that it wants to succeed,” says Garnett, a member of the Response Advisory Board, “they put it on TV and in stores, which is an interesting irony.”
In other words, companies that have emerged from the digital evolution are turning to traditional means of reaching their customers. Most of the TV advertising is not performance-based, Garnett points out, nor is it designed to drive customers to retail stores to make purchases. Instead, most of it is image-based.
“They’re using brand-style ads, and I’m not very happy with them,” Garnett says, laughing. “I think a lot of the Amazon ads in particular are pretty off target when it comes to what consumers really care about.”
Garnett blames some of those advertising missteps on the fact that digital companies tend to use online testing to determine effectiveness, and to figure out whether an innovative product has market potential.
“This is an error because it’s very difficult to get your message out purely online for a product that’s highly innovative,” says Garnett, noting that some of these companies perceive TV as being too big of an investment to risk early on, and wind up putting a lot of effort into trying to do clever things online (e.g., viral videos) that only work every now and then, or sometimes must by accident. “Then they walk away and say, ‘Well, that’s not working,’ and decide that their product is the problem. In fact, it’s simply that they’ve used the wrong testing and/or advertising approach.”