Consumer Electronics Market Research & Business Solutions

The tablet market is beginning to mature after explosive growth following the device’s introduction. The tablet is now an integral part of the typical American household’s electronics inventory. Our new Tablet Accessory Inventory Report evaluates tablet accessory purchasing and ownership, providing fresh insights straight from consumers and our industry analysts.

Kids and Consumer Electronics, 2014 Edition delivers new insight on the significant role consumer electronics products play in children’s lives — and how it’s changing, with trended insights back to 2011. Looking at ownership and usage among kids ages 4 to 14, the report covers of a host of consumer electronics products — from smartphones and tablets to gaming consoles and TVs. Discover the frequency with which kids use these devices, the average age they begin using them, and more.

What's Driving Consumer Behavior? Our new consumer technology reports explore the products and market trends that matter to your business right now. These timely reports can help you navigate the fast-moving CE and IT landscape.

The VAR channel represents significant business potential. Now you can get a picture of this elusive technology market! Our VAR Tracking Service delivers detailed monthly sales information with views at the category, brand, item, and feature levels.

The NPD Group today announced that it has launched its Checkout Tracking℠ E-commerce service for the technology industry. The service will provide clients an in-depth understanding of online consumer electronics sales, which is becoming increasingly important for manufacturers and retailers alike. Among consumer electronics categories seeing strong annual online dollar sales growth in the U.S. are: streaming audio speakers (80 percent), smart lighting (74 percent), and security & monitoring devices (56 percent)*.

By the end of 2020 there are forecast to be 260 million installed devices attached to the internet and able to deliver apps to TVs, according to the latest NPD Connected Intelligence forecast. This represents 31 percent growth in TV-connected devices over the forecast period, led by smart TVs and streaming media players. In fact, smart TVs will drive nearly half (48 percent) of installed internet-connected TV device growth through 2020, while streaming media players will contribute 31 percent of ownership growth.

Video games, electronics, and apps make up a combined 22 percent of kids’ licensed product dollar sales in the U.S.* – on par with the volume represented by toys, which is the number one licensed industry at most retailers, according to the U.S. Kids License Report from global information company The NPD Group.

We may be unsure which team will win the Vince Lombardi Trophy in Super Bowl 50, but if history is any indicator, The NPD Group already knows the TV market will triumph regardless of the team that ultimately emerges as the champion. According to The NPD Group’s December 2015 Omnibus study, 6 percent of households surveyed this winter said they expected to buy a TV ahead of the Super Bowl. In particular, Millennials are driving much of this anticipated growth, with 10 percent saying they intended to buy a new TV ahead of the Super Bowl.

The unlocked mobile phone market has reached approximately 30 million consumers in the U.S, which currently accounts for 12.5 percent of the market, according to global information company, The NPD Group. As the unlocked phone market continues to grow, the latest Unlocked Phone Demand Report 2.0 from NPD Connected Intelligence compares consumers who purchase unlocked phones, to the larger base of consumers who purchased standard, locked phones from their carriers. Among the findings, the report revealed that consumers with unlocked phones are less loyal to both carriers and device brands than those with locked phones.

According to The Future of Tech report from global information company, The NPD Group, home automation products will add $1.8B of new consumer electronics sales through 20181. The Future of Tech report forecasts 74 percent growth in the home automation category from 2016 to 2018, driven by sales of security & monitoring products, as well as growth in power & sensors.

U.S. dollar and unit sales of all-flash arrays (AFAs) are rising, as companies leverage them to process growing quantities of data at a faster pace.

Turntables are seeing renewed consumer interest as evidenced by double-digit growth in both U.S. dollar (16 percent) and unit sales (23 percent), for the 12 months ending February 2017 versus year ago, according to global information company, The NPD Group. Premium products were a key contributor to sales growth, as dollar sales of turntables priced above $250 grew 135 percent in the 12 months ending February 2017, accounting for 11 percent of total sales. An expanding number of entry-level products also aided the market increase, as evidenced by a six percent decline in average selling price.

Year over year, the number of homes with an installed connected TV device increased by six million, now totaling 60 percent of U.S. internet homes, according to the NPD Connected Intelligence Connected Home Entertainment report. As the number of connected TV homes continues to grow, the devices used to make those connections have shifted. In January 2017, streaming media players were the most commonly installed internet-connected TV device. Thirty-five percent of U.S. internet homes now have a streaming media player, up from 29 percent last year.

According to global information provider, The NPD Group, U.S. dollar sales of drones more than doubled in the 12 months ending February 2017, with a 117 percent increase year-over-year. While premium drones (priced $300+) fueled revenue growth, increased distribution and assortment during the holiday season helped drive unit demand for drones priced between $50- $100.

With Amazon’s now annual summer buying event upon us, we’re looking back at the past two years to evaluate the impact of Prime Day to tech vendors, to Amazon’s tech business, to Amazon’s Kindle/Echo businesses and to online consumer tech as a whole. 

After two years it is quite obvious that, like the Black Friday event Prime Day seeks to emulate, Prime Day is already morphing and changing. Much like we have seen Black Friday evolve into a whole week of deals (and in some cases a whole month), Prime Day has already begun its calendar expansion this year. We would suggest that this expansion is not necessarily a good thing, as it dilutes the idea of a day (just like it isn’t great for Black Friday), and has more to do with maintaining consumer interest and a need to stretch the period out in order to maximize the return.

Of course, unlike Black Friday, Prime Day remains very much an Amazon-focused event with the rest of the online (and offline) world still trying to develop a competing product or strategy. In fact, according to NPD Checkout Tracking^SM, Amazon accounted for 88 percent of online tech sales on Prime Day 2016, up six points from the prior year, and far above the 55 percent of volume they generated over the last 12 months (ending April 2017). Amazon’s secret weapon (at least for tech) is that it uses Prime Day not just as a way to promote aggressively priced consumer technology products to grow its overall share, but to also co-promote its ever-expanding portfolio of brands, such as the Kindle and Echo families of products. While this strategy is great for Amazon, the numbers show that, Prime Day’s usefulness as a promotion vehicle for consumer tech as a whole is considerably more limited (like we see on Black Friday).

Amazon’s tech business clearly gets a bump from the Prime Day promotion. Just like Black Friday drives crowds into stores (or at least it used to), Prime Day delivers traffic and volume to Amazon. For Amazon, overall, its buyer share (percent of shoppers who shopped at a particular retailer) of e-commerce jumps to over 50 percent on Prime Day from the low 30 percent range both before and after the sale, as reported by NPD Checkout Tracking. Does this help Amazon’s tech business? As we said earlier, Amazon’s share of online sales jumps 30 points on Prime Day. In 2016, that equated to 70 percent in revenue. But, there is that catch mentioned previously. Of the increase, fully 60 percent of the incremental dollars spent on tech on Prime Day are spent on Amazon products, driving that 70 percent growth rate down to 29 percent, which is good but not all that special considering the hype of the day and the long-term momentum of Amazon’s retail tech business. Even the breadth of the business is impacted. On Prime Day, three of the four biggest categories were wireless speakers, tablets & e-readers, and streaming video players, all of which are driven by Amazon’s sale prices on Amazon-branded products, not on third-party products, or their vendor’s products. A big win for Amazon’s branded products and Amazon Prime, but not such a big win for Amazon’s vendor partners. 

Vendor partners (both direct and marketplace) and Amazon’s retail tech business certainly benefit from Prime Day’s incremental volume; but once the excitement of Prime Day is over, much like we see on Black Friday and oftentimes for big sales events at other times of the year, that increase does not seem to translate into long-term gains. Using NPD Checkout Tracking to compare the sales from 10 weeks prior to Prime Day, Prime Day sales, and sales from the 10 weeks after Prime Day, we find that the trajectory of Amazon’s retail tech business is basically unchanged. Sales in the 10-week period before Prime Day increased 29 percent and in the post-Prime Day period they grew 26 percent, a negligible difference. 

The end result of the last two years of Prime Day is that, like any retailer’s sale goals, success is measured in the incremental benefit to the retailer and oftentimes very little of that benefit accrues to its vendor partners. That is clearly the case here, with Amazon seeing benefits with its Prime membership and in growing the installed base of Amazon hardware, but with little incremental opportunity for its vendor partners (or for Amazon’s own retail tech business) over and above Amazon’s ongoing impressive growth rates.  When the deals and the final results for Prime Day 2017 are tallied, it’s likely that its similarity to Black Friday will have increased.  As Prime Day increasingly mirrors the form, function and focus of Black Friday its utility to the vendor community will diminish as Amazon’s goals continue to outweigh the needs of its partners.

It’s that time of year again; school instruction is coming to a close and Jeff Spicoli is about to get a visit from Mr. Hand to go over the history lessons he ignored (reference: Fast Times at Ridgemont High).  While Jeff is explaining to Mr. Hand about the class, IT equipment is being ordered, shipped and implemented by channel partners in preparations for the August-September timeframe, which marks the beginning of a new school year.

According to NPD’s most recent SMB IT Quarterly Survey (April 2017), in the next three months, 50 percent of firms in the education market plan to spend on technology, which is a 62 percent increase from the prior year. The instructional side (classroom technologies) will be a key area of growth, as technology can solve for many of the shifts we are seeing in the classroom, including… 

• Classroom sizes have grown and teachers are in need of solutions to help reach every student more effectively.
• More schools are adopting STEM (science, technology, engineering and math) and STEAM (science, technology, engineering, arts and math) programs to help the U.S. become more competitive on the global stage.
• Schools are encouraging students to become more innovative and expressive, while collaborating with their peers to solve real world problems (e.g., project-based learning).
• Schools are preparing for digitally-based Common Core Standards assessment testing.

Where Technology Comes In

To address the needs of larger classroom sizes, many schools have increased their use of learning management systems, such as Blackboard, Moodle, and Google Classroom, to better manage students and encourage greater parent involvement in the education process. In addition, polling devices via smartphones and classroom responders are also helping teachers better understand when the students are absorbing the content most effectively.

Schools that have woven STEM and STEAM programs into their curriculum are adopting technologies such as 3D printers, microcontrollers, drones, and more. Many schools are teaching students how to use computer aided drafting programs to create their own designs and print them via a 3D printer. To help students learn programming skills, schools have adopted microcontrollers (e.g., Arduino boards), which allow students to download open source code and even create their own code to develop projects such as obstacle avoiding robots, plants that send a tweet when they need to be watered and more.

As more of an emphasis is put on project-based learning, schools are using methods such as flipping classrooms, where students watch videos of the next day’s subject ahead of time, so class time can be used for digging deeper into the material via peer learning groups. In this case, instead of receiving an hour-long lecture, students form peer groups where they discuss content and then present findings to the classroom using a projector or an interactive whiteboard, encouraging students to develop communication skills. From a demand perspective, according to NPD’s Distributor Track and Commercial Reseller Tracking Services, year-to-date (January- April 2017) versus the prior year, we have witnessed 136 percent unit growth in the interactive whiteboard market. 

For schools that have adopted digitally-based Common Core Standards testing, Chromebooks have been the device of choice due to lower average selling prices. Year-to-date (January- April 2017), Chromebook shipments have increased 26 percent in the B2B channel, with the largest volume month approaching in July. In addition, according to our SMB IT Quarterly Survey, in the next three months, 45 percent of firms in the education market plan on purchasing personal computers, which is a 22 percent increase from last year. Along with the growth in Chromebook sales, upgrades in wireless networks will occur, as students and staff place increased demands on the network. According to the SMB IT Quarterly Survey, 50 percent of education institutions plan on purchasing networking gear, a 183 percent increase from last year. 

As technology is further ingrained into school curriculums, whether driven by necessity or choosing, we expect to see strong 2017 back-to-school sales in the B2B channel. And, for Jeff Spicoli, maybe we’ll see a drone delivering pizza or a bagel in a future remake of Fast Times at Ridgemont High.

This time last year, when interest in the Amazon Echo and Google Home were at a fever pitch, many observers wondered why Apple hadn’t yet made a voice-activated speaker. After all, Apple has the pieces necessary to make a great Echo-like device: a robust content and app marketplace, smart home platform, and a market-leading audio brand in Beats. Additionally, Siri is installed on 375 million Apple devices. Smart speakers can tie disparate pieces of an ecosystem together and last year Apple seemed perfectly suited to make such a product... 

At last week’s WWDC, Apple finally announced HomePod, its voice-controlled speaker powered by Siri with all the requisite features we’ve come to expect from the growing crop of ‘smart’ speakers:  Apple Music integration, the ability to set timers, news and weather reports, and control over other connected devices in the home. HomePod is similar to Echo and Google Home in many ways, even down to its vaguely similar form factor. Given these similarities, and Apple’s late entrance to the market, it’s vital that HomePod provide a differentiated experience from what is sure to be a wider field of competing devices.

A more robust Siri is one differentiator Apple is counting on. An announced upgrade to ‘Siri Intelligence’ will allow the application to analyze multiple streams of user data – taking into account past app and device usage, as well as context, in order to help Siri make better informed recommendations. Apple has also expanded the list of third party apps and capabilities Siri has via SiriKit. Tasks like dictating notes in Evernote or initiating VOIP calls can be done using the digital assistant, a sign Apple is looking for ways to make more applications navigable through Siri. Further, an improved Siri more tightly integrated into iOS and HomePod is likely to get iPhone and iPad devotees interested.

Challenges await Apple too. At $349, HomePod is twice the price of Google Home and Echo, making it unlikely consumers will buy multiples to position throughout the house… at least at that price. Simulating a Sonos-like multi-room audio experience throughout the home would be equally cost prohibitive. And while early reports suggest HomePod delivers on sound quality, Apple isn’t a pedigreed audio brand. Wireless speakers priced above $300 make up a small market, accounting for just 12 percent of total revenue, which has actually declined three percent year-to-date. Lastly, with new products like Amazon’s Echo Show and Echo Look on the horizon, the market is already looking beyond the tabletop speaker.

But if any company has a track record of creating markets where they don’t exist, it’s Apple. Apple’s other voice activated audio product, AirPods, launched in December to intense demand, making Apple the third leading Bluetooth headphone brand on the market thus far in 2017. The pricing strategy was different (AirPods actually hit the market slightly below the price of its competitors), but limited supply of the product and rave reviews from users represent a first successful step into this market. HomePod won’t release until December, but the buzz around the product will surely challenge demand for competing voice-enabled speakers, and premium non-voice speakers as well, for the rest of the year.  You can expect Apple fans will once again line up outside stores to buy HomePod on launch day – but interest among more casual users will determine how well Apple can compete in this rapidly changing market.

Source: The NPD Group, Inc. / Retail Tracking Service, U.S.

The lady sitting in front of me on the tram was clearly into her music. She was using headphones, but we could all clearly hear Eric Clapton’s dulcet tones explaining that he would, “wait in this place where the shadows run from themselves.” Deep stuff, Eric; but also, rather loud. I mirrored the attitude of the Dutch passengers around me, stoically ignoring the noise and searching for some sort of inner peace. However, the tram driver felt differently and requested the passenger turn her iPhone volume down, which she did.

In the relative quiet that followed, I realized there were two tech matters addressed in that single moment. Firstly, in a future (or in some places, current) world where there is no tram driver, we would have continued to listen to the tinny echoes of Eric Clapton passing through the headphones; and secondly, tech ‘smarts’ can be, and often are, ignored by consumers.

I say the latter, because Apple takes some lengths to remind us that we shouldn’t be listening to extremely loud music via headphones. Siri will helpfully suggest that it may be too loud for comfort and for the sake of our eardrums (as well as those around us), a lower volume would be a good idea. But we can overrule such a suggestion. And while I feel that we should be able to, I’m not convinced that will always be the case. As we embrace artificial intelligence, rather than simply helpful suggestions, I can see a time when the music volume may perhaps be determined for us.

That may be (and probably is) a very trivial concern, but it is a small sign of the ‘freedoms’ that we could give up, ever so slowly, as we allow more ‘smarts’ to seep into our world. And the smarts are coming. Almost every tech company out there salivates at the idea of a ‘smart city’ and what that means in terms of future revenue and new product opportunities. What is required is a careful balance between the consumer’s desires and technology’s drive towards more intelligence. And please don’t mistake me for someone with nightmares about a dystopian, Blade Runner-esque future: I’m a self-professed nerd who is pretty excited about how technology can help create a smarter city.

But this is where I hope the term ‘smart city’ can be used a little more widely than simply in a tech context. A smartphone is not really ‘smart’; rather it’s a small computer (and we don’t call the ‘PC’ a Smart PC very often). The same is true of a Smart TV, adding apps does not make it smart, it just broadens its use case and makes life a little more convenient for us all. The key here is the term convenience: a smart city should provide us more information with which we can make decisions. More so, a smart city should provide us with a more entertaining, playful world around us, which does not necessarily mean more overt technology, as much as it does a cleverer, more creative implementation of everyday products that surround us. For that, we all need to think far beyond the current state of technology and do a better job of blending tech with everyday activities. That said,  the activity needs to remain at the forefront, rather than letting technology drive the direction… even if it does mean occasionally listening to someone else’s music on the tram. But that can have advantages too: I haven’t listened to Cream for a long time and I can thank the lady on the tram for the reminder to give them another listen.

LeEco’s vision for the U.S. was bright and promising, but a bit more fleeting than some anticipated. The company started that way, with a spectacular launch event that promised an array of hardware (from TVs and VR, to a connected bike and self-driving car) as part of a much broader vision to be the ultimate content ecosystem. But its strategy quickly started to show flaws, with little positive news following the initial hurrah, and a slow trickle of doubts and rumors about if it was possible to turn the LeEco dream into reality.

Plans to create an “eco city” office complex to house the thousands of expected employees in the Bay Area quickly disappeared. More importantly, for a company that planned to be an “ecosystem player”, the few additional content deals the brand secured were either small, or sat outside the LeEco-focused interface. This ultimately left the company with a range of hardware, but little compelling content to differentiate it from every other OEM. And the self-driving car concept didn’t seem to move beyond the original prototype model.

The trickle of bad news eventually turned into a flood, with rumors of layoffs and, ultimately, the collapse of the company’s plan to purchase Vizio, which would have created a strong base of installed hardware from which it could expand. Not only did the “eco city” dream go quiet, the company apparently put the land that it was to be built on up for sale.

Earlier this week, the dream was finally snuffed out with the announcement that 325 U.S. employees will be let go. What’s left is a struggling hardware company that will focus its efforts on Chinese-speaking households in the U.S. While not a terrible fallback position, since the company can leverage the content partnerships it has in China, as the original Chinese-based LeEco was a content company first and foremost; the real message here is that the company’s dream of changing the U.S. tech world is over.

To understand what went wrong, we don’t need to look very far. As we said at the time of the launch, LeEco was undertaking a very bold strategy with long odds against its success. Sadly, that prediction has come true less than a year later. The company over-extended and blew through its capital too quickly. It didn’t help that exchange rates turned against it making everything a bit more expensive. And further, it appears to have misjudged the highly competitive content business and how hard it is to create a differentiated model in a land where almost every content source is a readily-available app.

It’s this last point that should be a warning to other OEMs looking to differentiate their TV hardware through content. The tech world is quickly following in the path of smartphones, where a few core operating systems will become key. Google, Apple and Amazon will dominate the app and content world across not just mobile, but all screens over time. This means that all content will be developed for these operating systems first and smaller platforms later. Larger OEMs can obviously still differentiate a little without embracing one of these behemoth solutions, but smaller OEMs will need to pick a platform, rather than trying to curate their own band of merry apps.

Spring is making a late arrival in New York this year, and the delay is beginning to take its toll. Last week, as I prepared to drive back from the warm, balmy air of Virginia towards New York, I decided to take the top off of my Jeep for a taste of spring. Despite knowing it was a rainy day back home, I took my chances and tried to judge how far I could push it before pulling over to put the roof back on.

Naturally, I sought the advice of my smartphone’s digital assistant. After all, this seemed like the perfect task for a product that everyone tells me is clever and packed with intelligence, albeit of the artificial variety. Silly me. What I thought was a simple question: “When will I encounter rain on my journey,” or even better, “Warn me 15 minutes before I will encounter rain,” left my digital assistant confused and, sadly, referring me to a variety of websites that could not answer my question. Besides, I was driving and hands-free is the only option. I did not seek a website; I wanted an answer. In the end, my digital assistant let me down…and I may have gotten a little damp on the ride home.

A couple of years ago, I probably wouldn’t have expected a useful result from a digital assistant, but I’ve been slowly persuaded to think bigger. We’ve gone from positioning these ‘assistants’ as simply being a voice interface to something rather more intelligent that, when asked a question, will provide an answer.

I would posit that there are a couple of different issues that lead to consumer disappointment. First is the over-hyped nature of artificial intelligence that’s now promised in almost every tech device. Second, I suspect, is that there needs to be a greater break with the ‘old’ technology that is within the smartphone. The smartphone gained its place in our hearts because it provided access to the internet via websites and apps. As such, there’s a tendency for the new assistants to leverage those sources as legitimate answers, rather than assuming that you want the actual answer immediately.

I expect big changes in the next year or so, as digital assistants migrate from smartphone-based solutions to a plethora of devices, such as wearables, that don’t have large screens. Without these screens, the creator mindset will have to change significantly. Indeed, one could argue that we’re already seeing that; Alexa and Google Home were originally designed around a speaker, not a screen, but both have the safety net of a smartphone app for more complex questions. To continue to evolve, manufacturers and developers will need to eliminate the reliance on a screen – even as a fall back – and enable digital assistants to operate without them.

The winner(s) in this space are by no means a done deal (even though Alexa has a head-start in terms of third-party integration), and failure to fix the issues will lead to mediocre use of any digital assistant beyond the simplest of tasks. But, maybe that’s okay in the near-term, as long as we all stop over-selling the products, promising the impossible. After all, we are very much programmed to work around our phone’s limitations, rather than the other way around. Take for example, the man I encountered at a Starbucks on the drive back to New York. He was busily restarting his phone and re-entering his password so that he could purchase a coffee using an app. Cash or credit would’ve been far quicker and easier... but where’s the fun in that?

Have you streamed video? Of course you have, as the majority of U.S. homes subscribe to a streaming service such as Netflix, Amazon Video or Hulu.

Have you watched programming on a 4K TV? Maybe, as 15 million U.S. homes already have one.

Have you streamed a 4K video on that TV? The odds are probably higher than you think. Here’s a quick overview of the landscape… bottom line is, the ability to stream 4K video content is ramping up fast.

4K UHD TV sales are accelerating rapidly and the resulting installed base tripled over the past year. In fact, a majority of consumers that purchased a 55-inch or larger TV during 2016 opted for a 4K model. But for 4K streaming content to reach viewers, they must also have enough bandwidth. Generally, consumers need a steady Internet speed of at least 25 Megabits per second (Mbps) for 4K content streaming.

Source: The NPD Group, Inc. / Retail Tracking Service;
NPD Connected Intelligence Connected Home Entertainment Report – January 2017

To observe viewer’s in-home Internet speeds a broadband speed test was embedded into our surveys. This does not track the speed consumers pay for, but how much they get throughout the day, as the average home has eight connected devices that may be eating up bandwidth. 

The net result showed that approximately six in ten 4K TV homes have fast enough Internet speeds to stream 4K video – totaling nine million households. The growth in 4K TV sales and fixed broadband speeds enabled this audience to grow from only 2.4 million homes one year ago... And the projections for the next few years, well, that chart looks like a hockey stick.

Here we are at the start of 2017, years removed from the time when many analysts would not hesitate to tell anyone that would listen that the days of consumers printing are coming to an end.  Yet when we look at the past year Canadian consumers spent $1.1B at retail to support their printing needs, a four year high.  In fact this past year Canadians spent $13M more than the previous year based on NPD’s Retail Tracking Service.

Personally I find that I am not printing at the same level at home as I would have in the past but as the designated IT buyer within our household I find that my print shopping excursions remain steady.  Despite our household relying more and more on non-traditional PC devices within the home, there still exists that printing need.  Based on NPD’s most recent sales results my home apparently is no different than many other homes across Canada.

What is most interesting about the latest results is that every printing category tracked this past year has shown an increase in revenue.  Printer Hardware sales in the past 12 months experienced an increase in revenue of $6.5M; Inkjet Cartridges sales are up $4.4M; Toner up $1.1M and Technology Paper up just under $1M.  One factor that needs to be considered with these higher revenue results is the higher prices due to a weaker Canadian dollar.  Across the board we do see each segment showing an increase in pricing however printer hardware unit sales this past year are only 1% less than they were four years ago.  This slight decline along with positive revenue results for Hardware, speaks to the continued need from consumers to replace or add a printer for their home or small business.

Everything indicates a healthy market this past year and although we are probably not set to see double digit printing growth moving forward we are not seeing the significant decline once thought as being inevitable.  The printing market will remain a top revenue generating segment for retailers and manufacturers alike as we move through 2017 and beyond.

Even though we are just casual NFL fans in my house, the Super Bowl is still an exciting event for us. This year, my wife and kids are looking forward to Lady Gaga’s halftime performance – and they’ll probably even check out the Puppy Bowl. I always watch the entire Super Bowl; however, I find the big-budget commercials to be more memorable than the game itself each year. Such is life as a fan of the perennial 7-9 team in Washington D.C.…

Regardless of one’s team affiliation, Super Bowl week is a net positive for the big screen TV market. For consumers, of course, it’s about getting a good deal. Last year, during the week leading up to Super Bowl L, the average selling price for a 55-inch flat panel TV was $738, $40 lower than the preceding 12-month average and the lowest level seen for the 52 weeks ending that week, according to The NPD Group’s Weekly Retail Tracking Service. Prices for 4K TVs were attractive during the week leading up to last year’s Super Bowl as well, averaging $962 for a 55-inch set, 11 percent lower than the 12-month average. This level of price promotion achieved its desired effect, driving a 25 percent increase overall in 55-inch unit sales for the 2016 Super Bowl week over the same week a year prior. 

The markets of the teams who make it to the Super Bowl see a lift in sales before game day, too. Last year, February sales of TVs 55 inches and above grew in both Charlotte and Denver by 47 percent over the same month a year prior (nationally, sales grew by just 30 percent). Similar to last year, this year’s game pits a perennial favorite, New England, against a team that hasn’t been in the big game since 18 years ago, Atlanta. For that reason, I expect to see a sharp increase in unit sales, especially in Atlanta this year. Falling prices and new technologies like HDR and OLED will also continue to help drive increased sales in these markets, as they have nationally throughout the past year.

No matter what your rooting interest this weekend, Super Bowl LI looks to be another promising event for the TV market. For bargain hunters, the big game provides Black Friday level pricing on many size segments, while those looking to upgrade their primary set to the latest and greatest technology can find deals from many of the top-tier TV brands. Add to this one powerhouse, big-market team and another who hasn’t been to the Super Bowl in almost a generation and you have the makings for another successful TV sales event.

2016 ended with a mixed bag of holiday sales and proved to be a very uneven year overall for the CE space. As we near the end of the first month of the new year, we’re  stopping to reflect on some of the positive momentum of 2016, as well as looking ahead towards what key technologies, categories and products might change the direction of the tech hardware markets this year (and beyond).

It is fair, I believe, to view 2016 as mostly a transition year; one in which the industry and consumers were introduced to the potential of new categories, new technologies, and new business models.  Viewed from that lens, 2017 is shaping up to be a tipping point year - a year where new technologies will prove their worth or begin to fade away. A year where products will move into the mainstream, or miss their mark and where some level of consistency in demand around new business models will need to be confirmed. From a technology standpoint, the optimistic view is that 2017 appears to be the start of what we experienced in 2009-2011, where new products, new technologies and new use cases provide a burst of opportunity and excitement for the market.  Looking back, those years saw the explosion of the iPhone and flat panel TVs, the beginnings of the deployment of LTE, the introduction of the iPad and the netbook, and the first indications of the re-invention of audio.  It also represented peak camera, GPS, MP3, and printer sales, and should serve as a cautionary tale that technological change goes both ways.

NPD’s recently-distributed tech industry forecast reflects this exciting (and scary) outlook.  Looking ahead over the near-term, we see a slim 2 percent increase for 2017.  That represents a reversal of the worst of the industry’s maturity-based stagnation with the promise that today’s most interesting new technologies will begin to provide the momentum that has been sorely lacking in an older, heavily-saturated hardware environment.  But that forecast comes with its own risks and rewards.  The past year saw an explosion of business models focused on reversing the saturated view of mature markets by refocusing those businesses on premium products and solutions, and away from a volume-based, entry-level focus.  PCs were the harbinger of that, driven by the incredible growth in gaming, the rise in average sales prices overall, and the renewed focus on premium products (not just in price, but in fit, finish and design as well).  4K provided some of that same momentum to TVs, helped along by the growing interest in large screens. But the fall in pricing, and the shift by some consumers back to legacy sizes and products (often fueled by pricing), put a damper on revenue growth.  Even the much-maligned tablet market was restructured to emphasize higher-priced products like Surface Pro and iPad Pro.  All of this reflects a positive reinvention of the view of technology for both brands and retailers and their consumers,  away from a volume perspective towards a growing revenue total addressable market (TAM) for the industry.

But technology shifts are always more exciting and provide the most long-term opportunity for the business.  Among the technology shifts, Smart Home appears to be the one most poised to explode in 2017.  As we exited 2016, it became apparent  that the Smart Home category, and the products that fall within, is the next great hardware opportunity.  The Smart Home category, which grew by over $400 million in U.S. sales in 2016, is being propelled by products like Amazon Echo and Google Home, Nest, Ring and a vast array of security camera makers. This grouping offers the best long-term potential for the tech industry, precisely because its focus on hardware; this means that sales opportunities in the future will remain in retail and will remain focused on hardware, without the cannibalization that gobbled up cameras, GPSs and others.  And while there are many product segments that will show solid growth in the next few years based on the shifting progress of technology (AR/VR and wireless headphones, to name two), only Smart Home seems to have a virtually unlimited TAM, a path to success and a roadmap to get there.