Heightened data security concerns, falling demand for smartphones and tablets, and stagnant growth in the Internet of Things (IoT) market are stymieing the consumer electronics industry and will continue to do so over the next year, a new Accenture survey reveals.
The report, 2016 Accenture Digital Consumer Survey: Igniting Growth In Consumer Technology, is based on a polling of 28,000 consumers across 28 countries.
Concerns over security in Internet of Things
Nearly half (47%) of respondents ranked security concerns and privacy risks among the top three barriers to buying an IoT device and service. IoT devices include smartwatches, wearable fitness monitors, and smart home thermostats, among others.
Of the survey respondents who indicated they either own or plan to buy an IoT device this year, nearly three-quarters (69%) said they know that these products are capable of being hacked and therefore can result in stolen data or device malfunctions.
Within the groups of IoT device owners or those planning to buy one in the next year, more than one-third (37%) decided to be more cautious when using these devices and services; 24% chose to postpone buying an IoT device or subscribing to an IoT service; and 18% quit using their IoT devices or terminated their IoT services until they can get safer guarantees.
The survey also highlights sluggish demand for traditional consumer technology devices. For example, less than half (48%) of respondents said they intend to buy a smartphone this year, down six points from the 54% who said they planned to buy one last year.
Consistent with this, the number of people who said they plan to buy a new TV or a tablet this year—30% and 29%, respectively—also dropped from 38% last year for both device types.
“The slowdown in the consumer technology market is irrefutable, serious, and global,” says Sami Luukkonen, global managing director for Accenture’s Electronics and High Tech group. “The market is not about the glitzy gadgets anymore—rather, it’s about providing secure, innovative, and practical digital services and more open collaboration.”
Luukkonen says that as device demand tapers off, the industry needs to make a sharp turn toward providing innovative, value-added services that consumers “are able to use with confidence.”
IoT isn’t driving growth
The survey also reveals lackluster demand for IoT device markets, which the industry has been counting on to drive growth as other device markets such as smartphones mature.
Only 13% of respondents, for example, said they plan to purchase a smartwatch in the next year, up only one percentage point from last year. The survey found similar stagnation in demand for a range of devices, including fitness monitors, wearable health devices, smart thermostats, and connected home-surveillance cameras—with each only cited as a planned purchase by 9% of respondents, about the same percentage as last year.
Smartwatch sales have been particularly challenging for manufacturers and retailers because the products are failing to meet consumers’ battery-life, ease-of-use, and design expectations.
Security and ease-of-use concerns thus hinder IoT’s near- and long-term potential. To ignite this market, Accenture says, consumer technology companies should consider getting serious about ecosystems, sharing data, and creating integrated services across multiple companies. An example of the latter is building a connected home through an integrated home security camera, thermostat, and door lock.
“Until the promise of IoT meets consumers’ expectations, the IoT market will remain more promise than profit, and do little to reinvigorate the overall digital consumer market,” Luukkonen adds.
Luukkonen believes that device providers need to consider investing more in innovative services and “make consumers’ online lives more secure, convenient, and enriching.”
Between October and November 2015, Accenture conducted an online survey with 28,000 consumers in Australia, Brazil, Canada, China, Czech Republic, France, Germany, Hungary, India, Indonesia, Italy, Japan, Mexico, Netherlands, Philippines, Poland, Romania, Russia, Saudi Arabia, Slovakia, South Africa, South Korea, Spain, Sweden, Turkey, United Arab Emirates, United Kingdom, and the United States. The sample in each country was representative of the online population, with respondents ranging in age from 14-to-55 and over.
- Wave of M&A Predicted to Hit US Community Banks
- Why Wells Fargo Is Looking to Exit the Asset Management Business
- Bank Customer Satisfaction Rising, ABA Reports
- Bank On It: How to Serve Underbanked Communities
- PPP: SBA Issues Guidance on Changes in Ownership and Full Forgiveness Eased for Smaller Loans