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Consumer Electronics Market Research & Business Solutions

In home, the car, and the office – consumer electronics are used everywhere, all the time. The devices consumers use are changing rapidly, as are consumers’ preferences. The features they want are converging. And it’s all happening in the midst of some of the highest device-ownership levels we’ve ever seen. To top it off, this is occurring in a mature market.

How do you make sense of it all and drive growth for your business? NPD has been tracking and analyzing trends in the consumer electronics market for more than 25 years, offering both retail and consumer information for all channels, including the Web. You can use this information to understand the rapidly-evolving product landscape and consumer electronics trends at the national and local market levels.

Beyond market measurement, we combine our robust data assets and industry expertise -- including your own data or third-party data, as needed -- to address specific issues at each phase of your business cycle from opportunity identification to marketing evaluation and pricing optimization.



Related Case Studies


In-Store Display Compliance Analysis: How The NPD Group and Mobee Identified a $40+ MM Revenue Opportunity for GoPro

GoPro, a leading consumer electronics brand and maker of world-class cameras, invests heavily in merchandising its products through specialized in-store displays across thousands of retailer locations. Unfortunately, broken and incomplete displays are a fact of life in retail. In order to generate buy-in from retail partners, GoPro needed a credible, trustworthy estimate of sales dollars lost as a result of incomplete compliance.



Checkout: How a Computer Manufacturer Found a Way To Win Broader Distribution

Manufacturers must convince retailers that their version of the hot, new thing should be on store shelves. See how our client proved tablet/laptop buyers spend twice as much on electronics overall compared to other buyers.



Store-Level Enabled Retail Tracking: How a Headphone Manufacturer Grew Sales by Expanding Distribution

Recently, a consumer electronics manufacturer approached us in its effort to grow its headphone business. It needed a retailer to carry its latest headphone model, but there was just one problem: the item’s overall sales and market share were lower than that of competing brands. Even so, our client knew it had a winner. This client asked us, “How can we convince the retailer to carry our headphones in its stores?”



In-Market Testing: How HP Inc Determined the Effect of Its Ad Investment on Printer Sales

While HP, Inc. has a strong track record of measuring marketing campaigns using existing modeling and analytics, they wanted to run a market test to quantify ROI on these campaigns and project returns on future campaigns at a national level.



Store-Level Enabled Retail Tracking: How BodyGuardz Proved its Growth Potential and Won More Distribution

With shelf space in a large wireless retailer and strong direct-to-consumer sales results, BodyGuardz set its sights on increasing in-store distribution to reach additional consumers and continue to grow brand awareness. To prepare for discussions with retailers, the company wanted a more in-depth view of the competitive cell phone accessories category and partnered with us to make its case.



 

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Consumer Electronics
Solutions


Retail Tracking

The Retail Tracking Service monitors retail sales of consumer technology products. Data provided by our participating channel partners delivers a detailed picture of product movement down to the item level. National information is available weekly and monthly; local market information is available monthly.


Store-Level Enabled Retail Tracking

Store-Level Enabled Retail Tracking complements our national Retail Tracking Service– it can help you determine whether sales are distribution-driven or whether certain parts of the country are contributing more to national share or driving growth. The velocity measure set that is part of Store-Level Enabled Retail Tracking takes into consideration sales volume (Annualized Industry Volume or AIV) rather than considering store count alone, for a more meaningful read on where products are selling and how they are performing.


Account Level Reports

These reports enable retailers who choose this option to share their information with approved vendors, allowing vendors to analyze business performance at specific retailers down to the item level in many instances. By making this report available to their vendors, retailers can work together with them to optimize performance. These reports may only be made available with the express permission of the retailer.


Consumer Tracking

Explore comprehensive market research on consumer behavior and attitudes across a wide array of industry sectors. This service provides a total market view, encompassing activity at all retailers including Walmart. It delivers critical insights into market trends, demographics, and customer satisfaction to help companies address the challenges of market sizing, competitive analysis and response, new product development, product positioning, and more.


Analytic Solutions

NPD’s Analytic Solutions group includes senior leaders with extensive experience developing and delivering analytic solutions that help clients predict areas of risk and growth to improve marketing and product development. By combining NPD’s unique data assets and industry expertise with state-of-the-discipline research techniques and proprietary solutions, our Analytic Solutions team is able to answer clients’ most pressing business questions.


Checkout

Checkout delivers the most comprehensive view of consumer purchase behavior for general merchandise categories, across all retailers over time, to help you understand how to adjust your marketing to fuel growth. Checkout E-commerce offers the most complete and accurate view of the online channel – including  first and third-party sales for Amazon and other marketplaces, 400+ e-commerce retailers including direct-to-consumer, and  an early read on emerging players.


Connected Intelligence

Gain the insight, analysis, and data you need to master today’s revolutionary new connected marketplace. Our industry analysts cover the complete connectivity landscape including market conditions, consumer behaviors, emerging technology, and more. Discover the emergent marketplace with Connected Intelligence’s focused analysis on innovation, adoption, availability, and application.



Consumer Electronics
Reports


2017 Women’s Facial Skincare Consumer Report

Identify opportunities and threats, optimize distribution and enhance consumer communications, with a deeper understanding of women’s attitudes about skincare. Get in-depth information about brand awareness and perceptions, find out how women shop for skincare products and what influences purchases at the category and subcategory levels.


VAR Tracking Service

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.



Consumer Electronics
Press Releases


June 18, 2018

Screen Size and Picture Quality Drive Replacement TV Purchases

For consumers, bigger screens and better quality are what’s most important when purchasing a replacement television. Based on the new NPD Connected Intelligence TV Ownership report, we took a look at replacement TV purchase trends.


April 6, 2018

Wireless Charging Mat Sales Receive a Boost in the U.S., As Consumers Look to Cut the Charging Cord

New smartphones often deliver growth opportunities in the mobile accessories space. Growth in wireless charging in Q4 2017 is a prime example.


March 14, 2018

U.S. Dollar Sales of Drones Increased 33 Percent in 2017, with Drones Priced $500 and Above Accounting for More Than Half of Dollar Sales

According to global information provider, The NPD Group, U.S. dollar sales of drones increased 33 percent in 2017, with dollar sales of drones priced $500 and above making up 69 percent of sales revenue. Over the past year, drones priced between $500- $999 saw the most significant sales growth compared to 2016, with dollar sales more than doubling (155 percent). This growth resulted in drones in this price range gaining 17 dollar share points during this timeframe.


March 8, 2018

The NPD Group Announces Executive Leadership Appointments In Technology Sector

The NPD Group, a leading global information company, announced today a series of executive leadership appointments being implemented to build upon the company’s strong growth in the U.S. Technology sector, enabling it to enhance its service to clients and retail partners.


January 8, 2018

The NPD Group Announces Winners of This Year’s Consumer Electronics Industry Performance Awards

– The NPD Group, a leading global information company, announced today the winners of this year’s Consumer Electronics Industry Performance Awards at their annual reception during the Consumer Electronics Show in Las Vegas.


January 8, 2018

Online Consumer Technology Sales Increased 19 Percent in the First Three Quarters of 2017, Reports Checkout

According to NPD’s Checkout, a receipt mining service, online consumer technology sales were up 19 percent in the first nine months of 2017 versus the same time period a year prior. Direct-to-consumer (DTC) sales saw the largest growth, increasing 34 percent, and representing 13 percent of all e-commerce sales, a one point volume increase.


January 8, 2018

NPD and gap intelligence Collaborate to Inform Price and Promotion Management in the Technology Industry

The NPD Group, a leading global information company, and gap intelligence, a values-led market intelligence firm, are combining NPD’s unique data assets with gap intelligence’s product-level price and promotion information to enable marketing and sales professionals to create winning product and channel strategies in the technology industry.


December 27, 2017

Unlimited Data Plan Users Consume 67 Percent More Cellular Data Than Users on Limited Plans Consume

Users on limited data plans rely on Wi-Fi more than unlimited users, according to NPD Connected Intelligence


December 21, 2017

It’s The Most Wonderful Time of The Year – For Headphone Sales

Whether treating yourself or gifting to someone else, increased spending has resulted in stereo headphones historically ranking among top tech sales performers during the holiday season (Oct. – Dec.). Dollar sales last holiday were 15 percent higher than the 2015 holiday season, and 2017 sales are off to a strong start with Cyber Monday week sales up 55 percent vs. the same week last year1, according to The NPD Group, a leading global information company.


November 22, 2017

With SVOD Subscriptions Rising, Consumers Spend More Time Watching Movies and TV

Viewing is shifting from live TV to subscription services, as more streaming content is made available


Consumer Electronics
Insights


June 7, 2018

Understand the Market and Find Opportunity

Food manufacturers and distributors share how the power of SupplyTrack helps grow their business


June 5, 2018

B2B Software on the Rise

There has been tremendous growth in many segments — within B2B software, and especially within cloud infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS).


May 30, 2018

MI Minute – Latest E-commerce Home Automation Insights

The NPD Group’s Market Intelligence MI Minute explores the latest e-commerce insights, featuring NPD’s Checkout E-commerce data asset. This animated infographic focuses on the growth of home automation through the online channel.


May 25, 2018

Home Automation and Streaming Audio Speakers

Recent growth in the home automation and voice-enabled speakers categories is worth watching. By understanding the annual value of the consumer to your brand and purchase patterns, you can harness interest in these categories and create winning bundling and cross-category promotional strategies.


April 23, 2018

Software Reigns Supreme in the Distribution Channel

IT hardware sales revenue rose 6% in the distribution channel in 2017, with unit sales growing solidly at 5% — but software gains were even bigger. See what we see . . .


April 18, 2018

MI Minute – Latest 4K TV Insights

The NPD Group’s Market Intelligence MI Minute explores the latest e-commerce insights, featuring NPD’s Checkout E-commerce data asset. This animated infographic focuses on the growth of the 18-34 year old consumer buying group.


April 10, 2018

Drone Sales – Looking Up!

Drone Sales


April 5, 2018

MI Minute – Latest Headphone Insights

The NPD Group’s Market Intelligence MI Minute explores the latest e-commerce headphone insights, featuring NPD’s Checkout E-commerce data asset.


March 5, 2018

U.S. B2B Indirect Hardware Market Growth

In 2017, the U.S. B2B indirect hardware market grew 4% compared to 2016, from $55 billion to $57 billion. The increase outpaced annual U.S. GDP growth and shows the hardware market's strength in the B2B channel, driven by segments such as PCs and networking devices.


January 17, 2018

Highlights from CES 2018

See highlights from NPD’s annual cocktail reception at CES 2018 with insights from Technology President Ian Hamilton, Industry Advisor Stephen Baker, and Industry Analyst Benjamin Arnold.



Consumer Electronics
Insights and Opinions from our Analysts and Experts


June 20, 2018

The Way of Android

While wandering the streets of Tokyo this past weekend, I came up with a theory that a city - and the people within it - is made up of alternating layers of the strange and the expected. At the most obvious level, any foreign city is filled with strange sights, smells, language and, of course, people; all of which feels increasingly alien as you move farther from wherever you consider home to be. But peel away one layer, and there’s much to relate to: the Japanese language may be beyond my comprehension, but human emotions are relatively universal (happiness, anger, calmness, agitation, and so on). And beneath the unfamiliar smells and noises are the same features, food, and functions that every city has. Peel back yet another layer and you may drop into the underlying structure of the city which, once again, is often quite different. And so it goes on.

Sometimes, the Android OS feels exactly the same to me. What should be a universal system often has a layer of customization on top of it, making every OEM’s version a little different. You know that, with patience, you can work out the basics because one layer down, Android will have the same features and functions… you just need to work out how to navigate to them. And then, just when you work that out, you may drop into the underbelly of the OEM’s manipulation of Android and find out, once again, that nothing is quite what you would expect.

This is a problem for the industry and for Google. Sure, I understand the benefits of the customization for the OEM, attempting to improve on Google’s OS and to provide the customer additional value and, just possibly, a little more pain if they choose to switch OEM. And, to an extent, that is acceptable, at least for the top layer of the environment. But when the customization moves to Android’s underbelly, the results can be quite confusing, with forked or other modifications causing hiccups to what should be a universal system. The result is a pervading sense of suspicion that it’s all not quite working in harmony.

As a case in point, I found myself a little lost in Japan’s capital city because something went awry between Google Maps and the connection from my Pixel Buds to my non-Pixel smartphone. And by awry, I mean complete silence when I should have been hearing walking directions. While exploring new cities, I typically walk quickly and think slowly, so it took the better part of a mile in the wrong direction before I realized I was lacking the helpful messages from Google’s little assistant.

Having retraced my steps, while staring constantly at the map on the screen, I pondered which part of the tech solution to blame - the Buds, Maps or the phone? I chose to blame the phone, which despite being new, had already experienced too many strange anomalies and quirks in how it worked  - so, the phone must go. I’ve decided to replace it with a Pixel phone in the hope that a full Google hardware/software solution will bring a greater sense of technology harmony into my life. Of course, if I had embraced the Way of the iPhone, I would already know that inner peace (as well as sense of direction) and would have been happy to place the blame on whichever mapping app I had chosen. But, apparently, the Android Way is a less direct path; and so was my walk through Tokyo.


June 19, 2018

Mobile Payments, Not Rocket Science

Eight years ago, I lost my shorts… and I mean that quite literally, although, to be clear, I was not wearing them at the time. I wrote about the experience (see: I Lost My Shorts, Not My Data), not because I thought anyone would be interested in how I eventually found them, but because losing my shorts (and the wallet in them) helped me to realize how much I relied on the Starbucks app. With no wallet or cash for 24 hours, the Starbucks app was a lifesaver: a source of limitless coffee and snacks. And that (the app, although the coffee helped) gave me hope, and some heady expectations, for the future of mobile payments.

Eight years later, I still rely on the Starbucks app and, like many other people, have failed to make the leap to a broader mobile payment experience. Part of this is simply lethargy on my part. I have cash and a credit card in my pocket, so why add more options? But far more of the blame lies with the dysfunctional union of mobile and banking in the U.S. (what other countries still expect customers to sign for credit card transactions?), combined with the wrong set of players trying to drive the market forward. As a result, I still carry cash for smaller transactions.

By contrast, my colleague in China pointed out that while he does have some cash in his wallet, they are the same bank notes that have been there for the past six months. Every transaction he makes is paid for via WeChat Pay or Alipay, the prevalent mobile cash solutions available in China. And he’s not alone; market estimates put mobile transactions at $12.8 trillion (yes, trillion) U.S. dollars in China in the first 10 months of 2017. The U.S. had a paltry estimate of $49 billion for all of 2017, according to eMarketer, and we suspect that is a generous number.

There are, in my mind, two key reasons why these Chinese payment solutions have become so prevalent, while the U.S. payment services have floundered. First, the services are completely independent of the smartphone’s operating system and hardware, so retailers and other vendors don’t need to support different apps for different hardware. But more importantly, the system is simple, based on QR codes that the vendor or customer can scan.

If that sounds familiar, it should: it’s the basis of the Starbucks payment solution that most people use. And because the mobile payment solution is based on QR codes, pretty much any vendor from the smallest to the largest can adopt it quickly and easily. Small vendors can accept payments using their own smartphones and the relevant app, scanning the QR code with the device’s camera. Large retailers can adopt the same type of solution that Starbucks uses, leveraging the barcode scanner to read the payment code on the customer’s phone – just as many of them do today for loyalty cards.

Perhaps what has really slowed down U.S. adoption is that the companies driving most of the payment schemes are smartphone vendors, all intent on building walls around their various ecosystems in an attempt to keep the customers from straying. But the problem is that most customers recognize the walls for what they are, and are reluctant to engage further into any one system. Google Pay should – to an extent – solve this problem, but even within the realms of its larger Android garden there can be obstacles. A case in point, when I tried to set up Pay, it turned out that my (very new) Android-based smartphone could not pass the Google security sniff test due to the way the OEM had modified the underlying Android. Rejected from mobile payments, I wandered down to my local Starbucks, launched my favorite app and bought myself another coffee.


May 1, 2018

The Wedding of the Century

It’s been a long dance between Sprint and T-Mobile, but it looks like fate has finally had her way. The two companies announced on Sunday that they will, after all, merge into one venture, with T-Mobile looking like it is firmly in control. That’s significant for a number of reasons, with the most important being that T-Mobile has re-imagined the mobile market, driving service innovation and growth, while Sprint has a terrible reputation for managing mergers (Nextel anyone?). Of course, this deal still needs to get the blessing of both the FCC and the DoJ; and consumer advocacy groups will likely be screaming from the rooftops about how this merger could drive consumer prices upwards due to less competition, leading to potential challenges.

But we disagree.  The pricing battle was never between Sprint and T-Mobile, but between T-Mobile and the Big Two. Indeed, Sprint has been steadily losing market share for years now and even though the carrier pulled out all the stops with highly aggressive promotions, nothing really seemed to work. Or rather, the promotions managed to attract new subscribers, but Sprint was still losing as many, if not more, subscribers than they pulled in each quarter. This goes to show that consumers want aggressive pricing and a strong network, and Sprint failed the consumer perception test on the latter point at least.

But if Sprint was not an influencer in terms of keeping pricing down, the carrier certainly does employ a lot of people. And with any merger comes the inevitable consolidation. Yes, both carriers are talking about how the new merged entity will drive job growth, but it’s a somewhat questionable claim. Job growth will presumably be driven by the 5G network build out in rural areas, which would happen with or without this merger. Indeed, one could argue that if Sprint and T-Mobile were to remain two distinct entities, there would be even more job growth. Furthermore, we must expect a significant consolidation of stores over time, driving more job cuts.

However, it’s not clear if Sprint would survive as a standalone entity long-term - and nothing says job cuts like a struggling carrier. So, overall, the merged solution will protect more jobs, we suspect. And let’s also focus on the positive, with the economies of scale that come from the new entity only needing to build out a single 5G network. This is likely to be a faster deployment, with deeper pockets of spectrum, than either carrier could do alone, meaning a much better consumer experience overall.

But while this deal has many positives to it and is, perhaps, inevitable, it also feels rather like a quaint, old school deal. Yes, it’s necessary, but let’s consider how Verizon and AT&T have been pushing for a broader digital content strategy through acquisitions such as Yahoo!, DirecTV, and (coming up) Time Warner. The combined T-Mobile/Sprint venture will need to pretty quickly look for a comprehensive content strategy to compete effectively against the Big Two.

Which brings us to the other news of the week, this week should see the closing arguments in the Time Warner/AT&T merger debate. Both sides have some valid points, but the deal should be allowed to go through, especially as the T-Mobile/Sprint news changes at least part of the debate. Sure, the two deals are fundamentally different (one vertical, one horizontal), but they both demonstrate the need for mergers and acquisitions as the very foundation of the competitive landscape continues to shift in this digital economy. Having said that, rational digital arguments don’t necessarily sway the day, so many of us will be watching the events unfold with great interest.



April 6, 2018

Where Angels Fear To Tread

Last week, SpaceX received permission from the FCC to use spectrum to create a satellite-based broadband service known as Starlink. I can’t help but think that the timing of the deal was quite perfect – as SpaceX talked about superfast broadband from space, China’s old space station, the Tiangong-1, was hurtling out of control towards Earth, reminding us that this space stuff is not that easy, and doesn’t stay up there forever.

It’s hard to bet against Elon Musk. The man is making quite a career out of dreaming big, and succeeding. He does, after all, throw enormous rockets up into space that (usually at least) come back to be reused, dig tunnels to circumvent traffic issues (useful for all those Tesla drivers no doubt), and even manage to sell flamethrowers to the public (and gets away with calling it “not a flamethrower” to avoid any issues). And, let’s not forget, his ultimate dream of getting mankind to Mars, which sounds almost feasible when he says it. So, why, when he takes on the seemingly impossible on a regular basis, am I less than convinced about an Earth-orbiting high-speed broadband solution?

My reluctance to believe starts with the fact that we’ve been down this road before. Twenty-some years ago two earlier pioneers, Bill Gates and Craig McCaw, launched Teledesic with a very similar goal of launching low earth orbit satellites to provide global broadband service. Craig McCaw was, in many ways, the godfather of the U.S. mobile services that we all take for granted today, creating the first national provider (McCaw cellular) that he later sold to AT&T. In other words, the man knew his mobile stuff, while Bill Gates, of course, understood the need for speed for computing. And yet, the venture failed to get off the ground due to the economics. At roughly the same time, Iridium, a Motorola-backed venture, had a similar goal that also ended poorly. Indeed, while Iridium does still exist today, the original version failed and was sold for less than the cost of decommissioning the satellites. Yes, it was cheaper to keep the aging satellites in the air than it was to close the business and bring them down in a controlled fashion.

Of course, 20 plus years is many lifetimes in terms of technology, and SpaceX has a couple of advantages over the previous failed ventures. Since they own the rockets needed to get these satellites into space, the set-up costs are less. Additionally, the satellites are now smaller and cheaper to build than they were in Teledesic’s days. That’s the good news. The bad news is that the LEO solution requires around 800 satellites, and they seem to have an average lifespan of five years, which is a pretty hefty hardware replacement cycle regardless of how cheap the actual satellites are. And while technology has helped make the venture more feasible in terms of satellite technology, it has also hindered it, as more of the globe is now covered by high-speed broadband services, meaning that the addressable market for the SpaceX venture is far harder to comprehend.

Between the wired broadband infrastructure that is available today and the promise of 5G – both mobile and fixed – there is far less opportunity for a broadband internet solution in wealthier markets. Where there is a huge opportunity is in less developed worlds that have limited, or no, Internet access today. But here’s the catch: Elon Musk is not building this solution as a philanthropic proposition. Rather this, as with his other “big bets” is supposed to ultimately fund the Mars venture and that seems to be in direct conflict with the size of the opportunity.

Even more challenging is the fact that SpaceX is not alone in its race to build a LEO-based broadband solution. OneWeb, which is backed by Softbank, has priority from the UN to use the radio spectrum needed for a broadband solution too. So with a questionable market need, unless the goal is to provide broadband to underdeveloped markets that will pay far less, and two companies chasing the same gold, the chance of success becomes even harder to imagine. And indeed, there are several other contenders, such as Inmarsat, Globalstar, and the re-born Iridium that are already in the sky (although all three use far fewer satellites, but result in greater latency).

It’s hard to bet against Elon Musk’s winning streak to date, but the entire history of satellite broadband services tells us that wishing on space hardware is not a good move. At best, we may see OneWeb and SpaceX’s LEOs combine into a single solution over time to improve the economics. At worst, we’ll come back to the topic 20 years from now when someone else decides to take on the challenge.


March 20, 2018

Fragmented Future of TV

Networks, providers, and consumers are touting their vision of TV's future and it’s not as straight forwards as the migration from broadcast to cable in the 80s. Traditional cable providers are investing in advanced set-top boxes that integrate apps such as Netflix, virtual MVPD user interfaces are seamlessly bridging the in-home and mobile experience, TV networks are going direct-to-consumer, and viewers are subscribing to unique combinations of services to fit their needs. I’m often asked “which distribution model will win,” a question beached in sound, but traditional, thinking. The future of TV will not follow a linear path where the masses migrate from one format to the next, akin to the transition from records to tapes and then CDs. Increased consumer choice has become a basic tenant of the internet age and TV is no exception.  

To simplify the complex web of live TV options, we’ve distilled the future into four personas, Steve, John, Molly, and Shad. As a casual reader, identify who you most resemble and perhaps learn a new way to access your favorite shows. For those in the industry aiming to develop the optimal strategy for reaching your total audience, start with the premise that viewers will no longer be found in the same location.

Meet The Four Faces of Live TVs Future

 

Steve

Meet Steve, traditional cable guy. You’ll recognize him as there is no more common way to get TV than through a cable or satellite provider. The heyday of set-top boxes and punching holes in the wall to run coax cable is behind us, but for those who want a large channel bundle and have low tolerance for quality of service issues (QoS) there is no better option. Indeed, cable still meets the needs of families where traditional user interfaces, remotes and familiar channel numbers, supersedes other considerations. But these consumers are no stranger to streaming video as 45 percent of them use Netflix, Amazon Prime Video, or Hulu, which is driving the integration of apps into set-top boxes like the Comcast X1. The key to this segment is serving their content and QoS needs. As streaming TV buffering and latency issues diminish, this consumer becomes a core target for virtual MVPD subscriber acquisition.


John

The myth that migrating to live streaming services requires content compromises is so 2017.  John, the somewhat tech-savvy consumer is so done with coax cable and just wants to attach a Roku and have live streaming through services like Sling TV. This consumer has no time for creating a custom bundle, adding a couple of apps gets the remaining desired channels. Don’t mistake this cohort for being just Millennials, as 44 percent of virtual MVPD subscribers are age 35-54, hence the high propensity to have children and tune into family networks. The subscriber churn risk and acquisition opportunity is largely related to QoS during surge programming, as few consumers are okay with the Super Bowl cutting out or buffering when watching the Macy’s parade on Thanksgiving morning. To add to this technical challenge, virtual MVPD subscribers are rather likely to own a 4k TV; if Netflix can deliver 4k streams, the same is expected from live streaming TV providers.


Molly

Those banking on Steve and John’s bundled vision of TVs future are remiss and likely have not met Millennial Molly. Direct-to-consumer (DTC) is a trend more far reaching that just the TV industry. The flood gates have opened and many are following premium movie channels, such as HBO, that launched DTC apps a few years back. NBC, CBS, and Disney, among others, have a mix of streaming services coming to market allowing consumers to pay for only the channel they watch. This business is being further uplifted by the Amazon Channels model, which offers consumers one bill and platform for accessing their otherwise disparate array of DTC TV channel apps. Capturing your audience here could quickly become as important as being part of traditional and virtual MVPD services.


Shad

Onto Shad who is among the most intriguing and smallest segments of TVs future. Don’t bank on this audience for scale, rather ideas. These tech-savvy consumers demonstrated the value of mobile video years ago. They’ll check out Snapchat shorts, Facebook originals, and will identify if a strategy such as Viacom’s mobile partnerships has legs. Consumers such as this try a multitude of new services, shift their behaviors often, and provide a much needed lens into the success or failure of new initiatives.


The magnitude of original content production and multitude viewing options has kept the TV industry strong and distribution destined for a more deeply fragmented and innovative future.






March 7, 2018

MWC 2018: The Perpetual Déjà Vu of Flagship Smartphones

Apart from 2017 when the Note 7’s battery issues forced the company to run excessive quality checks and delay the debut of the Galaxy S8, Samsung always commands attention at Mobile World Congress, and this year was no exception.


The new Samsung Galaxy S9 and S9+ models boast impressive upgrades to their predecessors, though almost all of these advances are under the hood, as Samsung did not make any radical changes to the form factor. Some of the noteworthy interior upgrades include a much faster processor (Qualcomm’s Snapdragon 845), impressive camera hardware, and software updates, such as dual aperture lenses and super slow-motion video capturing mode at 960 frames per second.

But none of these advancements created as much buzz on the show floor as the animated self-emoji feature, which allows users to create their own emojis via the AR-powered app using the front facing camera. This was probably the most exciting feature of the new S9 models, as attendees were desperately trying to get their hands on a test device to create their self-emojis. I should mention that I was no exception…



Samsung’s animated self-emoji feature is a great example of how OEMs are utilizing their enhanced camera hardware with AR/AI algorithms on top to enhance user experiences. Most flagship models debuted at MWC 2018 offered foretastes of these capabilities in various formats, such as the LG V30s’ Vision AI feature that scans and recognizes objects in the surrounding area and adjusts shooting parameters accordingly, or ZTE Zenfone 5’s AI-powered scene detection technology that configures the camera settings for optimum picture quality. These AR/AI enhancements undoubtedly provide a richer user experience, but they hardly offer any differentiation for consumers to select one OEM over the other.

Browsing through OEM booths at MWC eventually begins to feel like a perpetual déjà vu. You hold many 5.8-6.0 inch no-bezel flagship smartphones running on Android Oreo and Snapdragon 845, boasting a dual-lens camera powered by AR/AI, resulting in high competition for smartphone consumers in this space. While Apple experiences an upgrade conversion rate of over 90 percent, meaning nine out of 10 iPhone users buy another iPhone when it’s time upgrade, that’s not the case for Android-based OEMs, according to the NPD Connected Intelligence Mobile Connectivity report (1H 2017). In the same timeframe Samsung enjoyed a 56 percent upgrade conversion rate, which is quite high compared to other Android OEMs. With soft touches such as animated emojis in combination with aggressive trade-up campaigns, this figure is poised to go up in the upcoming months.

As expected, the new Galaxy S9 models were heavily discounted by U.S. carriers right off the bat. All major carriers alongside their prepaid arms (such as AT&T’s Cricket and T-Mobile’s MetroPCS) launched various buy-one-get-one and trade-in campaigns to entice upgraders. It’s refreshing to see carriers charging full throttle with the S9 campaigns at launch, as while the predecessor Galaxy S8 variants were also heavily promoted at launch, the rigid eligibility requirements adversely impacted volumes during the first couple months of availability. It wasn’t until late Q2/early Q3 2017 that carriers loosened the requirements and enjoyed high volumes.

Of the top four nationwide carriers, T-Mobile offers the most competitive pricing on the S9 models. This is a brilliant move on T-Mobile’s part, as the Galaxy S9 franchise is the perfect remedy to the carrier’s network-related deficiencies. The Galaxy S9 supports T-Mobile’s 600 MHz low-band frequency network that provides extended coverage in rural areas as well as superior indoor coverage. NPD’s Connected Intelligence findings reveal that T-Mobile over-indexes in satisfaction levels for almost all tracked attributes (service value, pricing, hidden fees), except network related areas (network coverage, dropped calls, network speed). A wide adoption of the S9 models among existing and new T-Mobile customers should help the carrier immensely in boosting its network image and perception. T-Mobile’s desire in pushing the S9 is also tremendously important for Samsung, which trails behind Apple in volume share at every carrier except T-Mobile. Apple enjoys 50 percent or more market share at the other three carriers, and its market share at T-Mobile has also been on the rise (up from 26 percent at yearend 2016 to 40 percent at yearend 2017). The heavy promotional push on the S9 variants by all carriers, coupled with Apple’s steep price tag on the iPhone X, will create the ideal landscape for Samsung to strengthen its foothold in the U.S. market.

Source: NPD Connected Intelligence Mobile Connectivity Report



March 1, 2018

Mobile World Congress in Review

This year’s Mobile World Congress is wrapping up and soon everyone will be heading to the airport. While the show was, as expected, heavily focused on smartphones (coming in the next blog), there was plenty of other things to see too…

 

Google’s Show

Amazon’s Alexa may be a strong presence at shows such as CES, but when it comes to Mobile World Congress, Google Assistant rules the roost. Large OEMs such as LG and Huawei made plenty of room for the assistant, featuring it both as part of the phone ecosystem, as well as within the home. LG, for example, demonstrated Google Assistant in the kitchen environment, making sure the oven was on, the clothes were washing, and plenty more. But one suggestion for Google’s next show: stay inside. The company’s tent at CES was flooded out, and the company’s MWC “village” outside enjoyed snow. So, torrential rain in Vegas and snow in Barcelona, remind me to avoid their next outside exhibit.

 

Of Clouds ...
While firmly a device and infrastructure show, there was still plenty of room for discussions about “the cloud,” particularly as the faster speeds and lower latency of 5G will allow for more processing to take place in the cloud, rather than at the edge device. What that means is we could see much smaller VR devices (yes, they were there) with the headset acting more as the simple “glass” for the computations in the cloud. Not only does that help justify 5G investments (cue a sigh of relief from carriers around the world), it could also lead to a very big leap in innovation in consumer electronics over time. Speaking of clouds and VR, kudos to HTC for the best VR demo, which allowed participants to float above the desert in a hot air balloon they control.

 

…and Cars

The car of the future is fast becoming a “must have” feature of any self-respecting show and MWC is no exception. Daimler Benz, in particular, came to show the latest in car connectivity, not to mention the smart car of the future. All of which, of course, need a low-latency, high-speed network (cue a second sigh of relief from carriers). It takes quite something to overshadow the combination of Mercedes and Smart… but having Formula One (F1) exhibiting at the show took things to the next level. Why was F1 racing there, you may ask? They announced the launch of F1 TV, an over-the-top streaming channel. While details were limited, one would hope that this will include 360-degree cameras in the cars, streamed live to VR headsets at home. Although, of course, we may need to wait for 5G networks to actually launch before we see that (cue groans from F1 enthusiasts across the world).

 

Big Presence

Huawei may be struggling to crack the U.S. market, but the company was out to show its market strength with an impressive booth. With top of the line phones, tablets, and laptops, the presence felt second only to Samsung… just like its place in the Android worldwide device market. The laptop was particularly nifty, with the camera popping out of keyboard (the middle of the function key row), meaning you can “disable” the camera at the press of a button. The move may leave some people in the U.S. government scratching their collective heads… it does rather go against the argument that Huawei is always trying to spy on us...

 

A Small Throwback

Two niche products came together at the show in the form of Sailfish (a version of Linux from ex-Nokia folk) and the Gemini Computer, a refresh of the old Psion from the early 1990s. In fairness, the Gemini will be a dual-boot device, allowing you to have both Android and Sailfish (or some other Linux version) running happily together. We’ve talked about the Gemini before, having first spotted it last year at CTIA, but Planet Computing, the company responsible for the Gemini, is now shipping the first of them to the early Indiegogo fans. With 4G and the ability to connect to external screens, the Gemini could become a useful “real keyboard” device to throw in a pocket for future trade shows rather than a laptop.

 

Same As It Always Was

Remember the years when mobile shows were full of talk about mobile payments, such as those vending machines where you could by a soda using your phone? Yup… that hasn’t happened, at least not at the very show where you would expect it. Instead, the machines we came across looked the same as they always have, with slots for coins and bank notes. And yet, we came across no vendors showing off the vending machine of the future. Did the dream die? While they may not need the low-latency OR the high-speeds of 5G, the vending machine is still a great IoT implementation, which is another promised use for 5G. And, not to pile on (too much), perhaps every self-respecting smart city (that’s you Barcelona) should be expected to adopt smart payments too. Perhaps next year Barcelona...



February 26, 2018

With HomePod, Apple’s Audio Ambitions Come In Crystal Clear

Earlier this month, HomePod pre-orders began shipping, and as of February 9, excited new owners began receiving their speakers. HomePod has been one of 2018’s most anticipated products in what has proven to be one of the industry’s most intriguing product categories, and early demand for the speaker did not disappoint. In fact, in the U.S., day one pre-orders of HomePod were higher than all other smart speaker first day pre-orders, except Amazon’s Echo Dot, according to NPD’s Checkout service1. With Siri, Apple Music, and HomeKit, Apple has all the necessary integrations to be a success in the smart speaker market. 

HomePod also represents Apple’s entry into the premium audio hardware market. Apple has made it a point to emphasize the audio fidelity of HomePod, in addition to its smart capabilities; and while the device will surely compete with other premium voice-activated speakers, like Sonos’ One, and Google Home Max, it will also jostle for share with audio heritage brands like Bose, Harman Kardon, and Sony.  Apple’s success in audio was on display throughout much of 2017 as AirPods became the top-selling headphone product by year’s end (based on dollars and units2).  Further, if taken together, Beats and Apple were the top-selling headphone brand of 2017, accounting for 44 percent of all dollar sales (not just wireless).

The audio market continues to deliver industry growth as well – another reason for Apple’s interest.  According to NPD’s forthcoming Future of Tech report, sales of Bluetooth headphones and wireless speakers are each expected to see double-digit growth by the end of 2018. And as more brands add music services and voice app marketplaces, audio hardware will become a way to strengthen those ecosystem ties. Smart speaker users are encouraged to use the music service that ties in most closely with their device. Proprietary components in hardware (like Apple’s W1 chip or the real-time translation feature in Google’s Pixel Buds available only through the Pixel 2 and Pixel 2XL smartphones) offer unique benefits and can further incentivize users to invest in branded devices. Apple’s success selling iOS, Apple Watch, and Mac devices, as well as all their content offerings, seem tailor made for integration into HomePod.

While Apple’s interest in additional audio categories remains unclear, their rapid ascent in headphones demonstrates the brand’s appeal in markets like audio, where it has largely been untested. Much of AirPods’ success has hinged on the device’s ability to unite different parts of Apple’s ecosystem (in particular Siri and iOS). While HomePod will fill a similar role in Apple households, the new focus on sound quality means Apple is not merely looking to impact smart speakers, but has its sights set on a larger disruption in connected audio.


1Source: The NPD Group, Inc. / Checkout E-Commerce Tracking
2Source: The NPD Group, Inc. / Retail Tracking Service


February 22, 2018

Getting them hooked

I gave my daughter, Charlotte, her first phone when she was just five years old. It was hardly an appropriate age, but what’s the point of having kids if you cannot use them in the occasional social experiment. And besides, it was a cool little phone - a Firefly - that had mom and dad call buttons.  The phone gave us peace of mind when Charlotte was on play dates, but she very rarely hit the call button.

Several phones later (she requested a “real phone” quickly), Charlotte’s mobile life finally took off in fifth grade when all of her friends started getting phones, too. Suddenly, her world became a lot more private, leaving us - and our fellow parents - muttering about the similarities between Pandora’s box and mobile phones. And there was an obvious lesson for me: my kids don’t need a phone to call home, or perhaps don’t want to call home; ouch!

The choice of a Firefly phone ages me (and my daughter, who is now in college), and I’ve lost count of how many phones she has gone through by this point. But it appears that apart from some serious advances in phone technology in the past 12 years, the age-appropriateness remains quite similar. Indeed, in many respects, advances in technology may be a limiting factor: I recall the Firefly phone costing less than $100; but today, everyone needs a smartphone, which means shelling out $500 or more to connect your children.

 

At what age did you give your child their first phone?

Chart

Source: Civic Science, February 2018. Base: 633 parents who have children


So while roughly 11 percent of parents hand out a phone to the under tens, the biggest adoption bump remains between the ages of 9 and 11, exactly when Charlotte’s friend all started to get their first phones 12 years ago. And this makes sense as it is when our little babies have to grow up a bit, moving from relatively small elementary schools up to the “big league” of middle school. It’s a daunting time for the kids, and downright terrifying for many parents if it is the first child to make the leap.

It is also the point when kids need a phone as so much more of their day-to-day school life revolves around technology, from Google Classroom to Chromebooks. And when it turns out that there are too few Chromebooks for the number of kids in the class, being able to whip out your phone is essential.

So there are a few lessons here for phone OEMs and carriers. From a carrier perspective, marketing to parents of fifth graders is a strong move. The timing is a little tricky as it is too late to wait for the “back to school” period as these kids migrate to middle school, and targeting too soon, as part of the fourth to fifth year move seems premature. Which makes me think that we are in the appropriate time now, somewhere around the middle of the school year.

For the handset manufacturers, there is perhaps an opportunity to build products that are more relevant for the younger kids. There have been several attempts at this market over the years, ranging from the Firefly to wearables, but none of them have really hit the mark as being “sophisticated” yet durable and small. In many ways, I think I’m describing a good old flip phone, but one that has been dragged into the twenty-first century so that the kids still consider it a “real” phone. We’ll be scouring Mobile World Congress next week to see if we can find any good examples.



February 22, 2018

Telecom and Tapas

It’s nearly time for Mobile World Congress, a show that provides a chance to catch up on the latest mobile solutions, as well as feast on the best tapas and sangria Barcelona has to offer (along with 100,000 of our closest colleagues). But while it’s a show that highlights the latest and greatest in mobile technology, it sometimes starts with a whimper. The show was slow to migrate from a paper-based registration to a mobile pass, and while it made the transition a few years ago, the official app seems to get poor reviews, as the login process is still challenging and seemingly unrelated to the Web-based registration process. Anyway, moving on from this issue, and assuming the app will let us into the actual show, the below are a few highlights of what we expect to see.

It’s still a phone show at its heart
Mobile World Congress has expanded its scope over the past few years, but the headlines are usually still about new phone launches. Samsung will be launching the Galaxy S9, which is expected to be the big news in the handset market… but it will hardly be the only news. While LG may have delayed its next big launch, there are still expectations that it will announce a V30 enhancement. And a slew of other vendors, including Sony, Huawei (remember, the third largest handset OEM worldwide), and Alcatel will also be making noise. And let’s not forget Nokia, which had a surprise hit last year with the retro 3310 bar phone. This year, the OEM needs to up its game with some pretty slick smartphones if it hopes to make a comeback. But the show can also be somewhat unforgiving for some vendors, reminding us of how far some of them have fallen and scratching our heads as to why they are still trying to succeed in this space. This can sometimes mean a tiny little booth, compared to previous years, or worse, a large floor space with not much to show.

IoT takes over
While handsets provide the shiny new toys that attendees come to gawk at, the Internet of Things provides the chance to show off just how wide-reaching wireless can become. And when we say “wireless” we do, of course, mean the next generation of cellular, 5G. With some concerns about how to make the business model work in a smartphone-centric world (see blog: In Search of a 5G Business Need), vendors showing off the latest concepts for the Internet of (cellular) Things will have the carriers’ attention. We can expect to see a wide range of new concepts, promising far more than simply throwing a cellular modem into a video camera, or “redundancy/backup” justifications for that one time of the year when your broadband connection fails.

Adding more Smarts to the City
Somewhere down the road to the Internet of Things, you suddenly discover that you’ve entered a Smart City, and Mobile World Congress is no exception. For the past few years there has been a GSMA-managed Smart City demonstration highlighting everything from connected trashcans to the operational control infrastructure necessary to make all of this work. While Smart City is already become a rather worn and overhyped category, Barcelona is a city that can get away with the demonstration as it has long been a leading example of Smart City implementations.

Electric everything
The mobility part of “mobile” can be expected to make its presence known, and we can expect to see the occasional car, used to highlight, yes, you’ve guessed it, 5G implementations. To date, the big news in cars has been the move towards electric vehicles (EVs) and Connected Cars (the addition of connectivity into traditional vehicles), which have left us feeling a little underwhelmed. Hopefully this year, there will be better examples of how 5G can make the car a connected mobility space, rather than just trying to find a compromise between Internet connectivity, while still maintaining the car company’s core money makers such as antiquated mapping solutions (hint, car companies...give us access to Google Maps and Waze please!).

And a little bit of everything else
Virtual reality will be a highlight, powered (of course!) by 5G rather than a more mundane connectivity solution, but it will be the pockets of unusual products that we are mostly hoping to scope out. And of course, we should expect to see some voice assistants. These were the big news at CES (for the second year running) and while they are, in some ways, a direct competitor to the smartphone’s dominant position with the consumer, there will be many examples of how the two technologies can come back together in a cohesive singular solution.

We’ll be providing an update on what we see during the show – so stay tuned!



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