The business of selling technology products into the commercial market is changing. Cloud services are displacing on-premises hardware and software. Employees are using their personal devices at work (BYOD). And there is more focus on services and less on ownership.
You can make sense of the shifts in this market using our commercial technology market research. It’s the industry’s authoritative resource for tracking and sales-out data in the total commercial channel. Tracking data from over 100 manufacturers, commercial resellers, and distributors makes us the only source for this information. Additionally, our monthly and weekly reports, available for key CE, BTO PC, storage, networking, and software categories, provide timely technology market research information and insights – including unmatched detail down to the item level.
Tap into the only source for total sales for the commercial channel. Monthly and weekly reports deliver timely information and analysis with unmatched, item-level detail. This aggregated sales data from the world’s leading IT distributors offers a precise view of distributor sales in all key CE, IT, and software categories. It includes information from members of the Global Technology Distribution Council (GTDC), with whom we have an exclusive North American partnership.
Explore the commercial purchasing of information technology products sold through national corporate resellers and direct marketers. This detailed, monthly market research information identifies the interests of corporate buyers and helps you understand and meet market needs. Our reseller point-of-sale data includes unmatched detail down to the item level.
VAR Service Invoice
There’s a new way to see exactly what’s happening in the VAR channel. It’s the VAR Invoice Service, and it provides new insights about the products and brands purchased together in the VAR channel. The service provides monthly POS reporting of commercial technology IT hardware subcategories within networking, computing, printing, storage hardware, and more. It tracks 1,400 brands and provides detail on sales for thousands of IT hardware items.
SMB Technology Monitor
Gain access to new B2B insights on anticipated purchase intentions and spending, brand perceptions, and services attached to PCs, networking equipment, storage systems, servers, software, mobile devices, and printers. You can use this information to understand small and medium business (SMB) buying behavior and make informed business decisions related to the commercial market. This quarterly report is based on an online survey of SMB technology decision-makers
You have opportunities. You face threats. What you need are smart, quantifiable methods of distinguishing one from the other and maximizing your chances of success. NPD’s Analytic Solutions Group includes a team of senior leaders with extensive experience developing and delivering analytic solutions that address strategic marketing, sales, and planning issues.
We combine NPD POS and consumer information, industry expertise, and custom survey research – then add state-of-the-discipline research techniques and methodologies to explain the "why behind the buy.” Through advanced modeling and analytic services, we offer insight into what will happen in the future, not just what has happened in the past, answering your most pressing business questions:
- What consumer segments should we target and why? How do we know if we’re successful over time?
- Which products are hot? How should we respond?
- What’s the sales potential and ROI for my new / revamped product idea?
- What is the optimal feature combination for my product?
- How do I monitor my performance in my sales territories, distribution areas, etc.?
- Is your promotion strategy attracting new buyers or just moving forward sales you would have gotten anyway?
- How will a competitor’s price drop impact your sales next quarter, and how should you respond?
- Will my product category grow or decline? Why? What does this mean for my market share?
- What’s the competitive landscape and where are my best opportunities (Food)?
- What levers should we pull to increase sales and market share?
- Why are some of our stores performing better than others?
- Why do consumers choose our brand? Our competitors’ brands?
- How effective is our advertising? How can we improve it?
- What products should we develop?
- What products should we sell?
- How can we optimize assortment based on local market dynamics?
- Which people should we target? Why?
- How do we know if we are successful over time?
See how clients have used our analytic solutions to solve their business challenges in our Analytic Solutions Case Study Library.
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.
238 Million Installed Internet-Connected TV Devices Expected by 2019, According to NPD Connected IntelligenceAccording to the NPD Connected Intelligence Connected Home Forecast, by the end of 2019, 238 million installed devices are expected to be connected to the Internet and able to deliver apps to TVs, representing 59 percent growth from 2015 to 2019. Connected TVs are projected to drive 45 percent of the growth over the coming four years, while less expensive, content-heavy streaming media players are projected to drive 35 percent growth.
Warranties Are Selling With Notebooks at a Consistent Rate Year-Over-Year Despite Growing Chromebook Sales, According to NPDAccording to The NPD Group’s VAR Invoice Tracking Service, warranties remain a critical part of the notebook sales purchase. Twenty percent of all notebooks sold with a warranty attached during the 12 months ending April 2016. Year-over-year this has remained consistent despite lower priced products like Chromebooks capturing more notebook sales. In the 12 months ending April 2016, notebook average sales prices (on invoices that included a warranty) fell 22 percent versus the prior year, driven by the strong growth of Chromebooks.
Year-Over-Year Connected Digital Fitness Device Growth Continues with a 40 Percent Dollar Increase in the First Quarter of 2016, According to NPDAccording to global information provider, The NPD Group, the connected digital fitness device category has continued to see growth in the first quarter of 2016 (January – March) as dollar and unit sales of the devices grew 40 percent and 27 percent, respectively, versus Q1 2015*.
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?”
This time, our Market Intelligence team focuses on Bluetooth headsets. Where is consumers’ affinity strong? Where are your most promising opportunities?
The newly formed Technology Market Intelligence team is committed to providing actionable intelligence that helps you understand what's driving shifts and trends in your key categories. Through email communications called Tech Talks and Technology Topline, now we'll provide added insights in the categories that matter most to you. The Market Intelligence team will complement our current industry analyst program by focusing on more tactical strategies that are being deployed effectively in the U.S. channel.
Check out the first edition of Tech Talks, our new communication highlighting the latest insights about what is driving the shifts and trends in the industry.
Every journalist and student in America knows the so-called five Ws: who, what, when, where, and why. It turns out the same five Ws are also the most basic forms of consumer segmentation.
But relationships among the five Ws of shopping are a bit more complex than they are among the five Ws of writing. And the tales they tell are illuminating.
We shared online and brick-and-mortar, receipt-based data from our Checkout TrackingSM service with researchers from the Wharton School of The University of Pennsylvania. The study revealed the what and the why of consumer purchases are linked to the when of consumers’ lifestyles. In other words, when people have babies, they buy baby things. But the how and where of purchases are tied to who a consumer is by generation.
Even when the other four Ws are the same, it’s who we are – Boomer, Gen X, or Millennial – that makes all the difference.
Insights and Opinions from our Analysts and Experts
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.
The start of a new year is a time for reflection and resolutions. As we move through January we often shape and finalize goals and objectives for the upcoming year. However, in the business world the most important question is how did the last year end? How did the market do and how did my business do? Will we see decline or growth in the year to come? These are great questions which can, and should, be examined.
This year I thought it would be fitting to begin the New Year with a brief analysis of how the Canadian IT Hardware distribution market fared in 2016. According to The NPD Group, the industry posted positive growth of +6 per cent in 2016 over the previous year.
There are a few categories that helped spur this growth. Categories like Notebooks, Large Format Commercial Displays and Solid State Drives all posted double digit growth on the year. Tablets in particular had a role to play in the overall growth of the commercial market in 2016.
Tablets posted an overall growth of +13 per cent for the year. However, if we exclude the retail channel which gives us a pure commercial view, the Tablet category actually grew an impressive of +59 per cent. This is especially encouraging given the lackluster growth that Tablets have seen in the consumer market over the last 3 years.
But why has the category seen such stellar growth in the commercial market?
As you can imagine, the use of Tablets is widespread in the commercial space. Not only are they being used by businesses (both large and small) for productivity but they are also being used in places like doctors’ offices and medical clinics, where physicians can take notes and print prescriptions quickly and easily. Other niche businesses are also beginning to utilize Tablets to organize processes and reduce paperwork. For example, if you have visited or taken your children to a paint ball arena, rock climbing gym, or indoor playground, you will notice that owners/operators of these businesses are often utilizing Tablets to manage consent forms, waivers and registration. Another common application includes their use in restaurants where your orders are taken and sent directly to the kitchen for speedy prep and payment.
These applications are also driving certain product sales. For example, it is not surprising that the use of larger Tablets in these environments is common. NPD distributor track non-retail data shows that Tablets with screen sizes of 10+ inches almost doubled their revenue in 2016 vs. the year prior.
While Tablets have quickly become a useful tool for businesses of all kinds, the question remains whether or not this momentum will continue, and for how long?
My contention is that as long as businesses are able to save time and money by leveraging Tablets the category will continue to grow in the commercial space.
Another Holiday season has come to an end and based on The NPD Group’s sales results, the past 6 weeks for the IT Hardware market did very well. Across the consumer IT industry the majority of categories delivered positive revenue results, which has not been seen for quite some time. Standing on top is the Notebook market which, during holiday, I would say exceeded expectations with volume growth at +9% and revenue results at +20%. I am not surprised by the revenue results as we have been tracking the Premium Price/Performance market throughout the year and Canadians continue to embrace these higher performing Notebooks – and certainly seem prepared to pay for that higher performance! Premium Notebooks, priced above $800 experienced revenue growth of 29% during Holiday.
For those who wished to find a Premium Notebook under their tree they were not disappointed. Over 63% of every dollar spent for a Notebook during Holiday 2016 was spent on a Notebook priced above $800. Despite the increased focus on Black Friday and tremendous deals being offered throughout the holiday, Canadian consumers have shown a desire to have Premium Notebooks to address their computing needs. In fact it is the Ultra-Premium market, $1,200 and above, that delivered the strongest performance with volume sales up 24% and revenue results almost 50% stronger than Holiday 2015.
For the industry, what I see as a very encouraging sign is that 10 of the top 11 vendors in the market all experienced an increase in both volume and revenue results in this Premium market. A fantastic way to end 2016 and hoping that as we look towards 2017 that this industry embraces these strong Premium results, during a time typically driven by low-end sales, and uses this as a springboard for 2017. Let’s hope for continued focus on Premium Notebook product lines to meet the needs of what Canadians are demanding.
Of course, that’s not to say that mobile integration has been abandoned. Far from it; all home automation and other products still need to work well with mobile. The “post-mobile era” simply means that mobile is no longer the absolute center of the tech universe. There is now room for a new operating system or interface to control the surrounding tech devices, particularly as the range of devices that need connecting are primarily static devices within the home. The simple power of an always-listening voice interface that can work across a broad range of devices, (almost) regardless of brand, is compelling and is seen as a way to help drive demand for new tech categories such as home automation.
This fundamental shift in power regarding who controls the consumer connection has the potential to shake up the industry. As a case in point, the last such change was the shift from mundane mobile phones to mobile computing platforms (aka, the smartphone), which saw a dramatic change in tech leadership, with the ascent of Apple and Samsung in particular, the collapse of Nokia and Blackberry, and a twilight zone of struggling OEMs in the middle.
As such, while Amazon was clearly the winner at CES – without even showing up – Apple should be concerned that Siri was rarely mentioned as an interface for home automation solutions. Of course, Apple still holds a key card when it comes to the consumer, thanks to the iPhone, while Amazon has not succeeded in making an impression in the mobile space. As a result, Amazon still has to address the mobile part of the post-mobile era, which remains key; however, that does not necessarily mean that it needs to build a mobile phone. Rather, if Alexa’s momentum continues, there is the potential to communicate with Alexa through an app as opposed to owning the hardware… and let’s not forget, at least one Amazon app is typically found on most smartphones, regardless of the underlying OS.
While Amazon’s Alexa was last week’s big winner, Google has the potential to ultimately benefit the most. The combination of Google Home, Android phones, Nest devices, Android-based TVs and set-top devices provides a comprehensive base that supports a unified consumer/device communication via whatever device type the consumer happens to be using. Further, with tighter integration into the operating system, and its own search engine backing all of those random inquiries, Google certainly owns enough of the ecosystem to compete in whatever the post-mobile world brings… including more phones.
As we embark on the holiday season, two distinct dynamics tend to converge: chaos; and new technology. Is your work done? Are you ready to take the week off between Christmas and New Year’s Day? Have you even started your holiday shopping? I can firmly say no to all of these questions, yet I’m sitting here writing a blog about this year’s trendy new devices. As you read on, I hope you spot a gift idea for that tech-crazed special someone on your list.
Holiday gift list for the tech geek:
- Consider picking up a pair of the new Spectacles from Snap. That is, if you’re lucky enough to live in a trendy town where Snap has embedded a pop-up kiosk offering you the privilege of standing in line for a couple of hours. Ah, demand creation genius. Simple, stylish, and a little bit retro; these $140 Wearables pick-up where Google Glass left off. Instead of a do-everything device, they do one thing well, recording a 10-second video and posting it to Snapchat. Let’s just say these made the list by being cool.
- Butler anyone? The technology is getting there and artificial intelligence is making its way into robots manufactured for the consumer retail market. But for this holiday season most of us will need to settle for a personal assistant. There are two primary choices here: Google Home; and Amazon Echo. Echo has the head start, and its Alexa voice assistant API is quickly finding its way into numerous other devices; yes an eco-system is forming. But don’t count Google out. The company’s deep integrated search data is critical as artificial intelligence is only as good as the data that informs it.
- A modern View-Master: after years of development, 2016 is the year virtual reality headsets will finally be under the Christmas tree. Entry level options include Google’s $15 cardboard, and $79 Daydream View. Those looking for high processing power and an immersive gaming experience can fork over $599 for the Oculus Rift PC-compatible headset, or $399 for Sony’s PlayStation 4-compatible VR. For the Samsung loyalist, Gear VR is compatible with newer Samsung mobile phones and offers a virtual reality experience for $99.
- Panoramas are so last year, but check out the new 360-degree cameras. Virtual reality headsets offer gaming and other entertainment experiences, so why not add a 360-degree camera and capture immersive videos as you head down the slopes this winter? Indeed, Samsung promotes the Gear 360 camera alongside its VR headset. This little accessory will set you back another $299 … no one ever said being an early adopter was economical.
- The NES Classic Edition, a $59 blast from the past comes with HDMI-inputs for our modern TVs. This updated version of the 1985 mega-hit game console comes with 30 of Nintendo’s most popular games built-in. Intentional or not, it’s priming the market for Mario’s return on the Nintendo Switch console coming in early 2017. As with Snap’s spectacles, the short supply is generating buzz and driving up the price. The least expensive one on Amazon today is $220. If this is the gift for you, consider doing what I did a couple of years ago and buy a refurbished original. You’re bound to have a few friends willing to pull their game collections out of the attic. For more on the NES launch check out my blog about being a Tech Luddite.
By now you’ve realized this is not a list of new products like 4K UHD TVs that will drive a large part of retail revenue this season. However, there are a few themes we’re seeing in the technology that are capturing consumer’s attention, including single-function use cases, integration of artificial intelligence, marketing strategies to facilitate demand creation, development of eco-systems, and a splash of retro design. Indeed, there was an industry message to this holiday gift list after all.
Last year in our Black Friday blog we noted that it appeared most retailers had the holiday figured out. When to open on Thanksgiving, how focused to be on online shopping vs in-store, when to promote and how to do it. Sadly, I think we were a bit premature in declaring a victory (or least an armistice) in the holiday shopping wars. This year many electronics brick-and-mortar retailers succumbed to the reality that opening on Thanksgiving was only for the biggest traffic aggregators, like the malls, and pushed their promotions to Friday morning. Unfortunately, what they missed is that Black Friday, as an event and a shopping experience, has ceased to exist. There were few if any lines at 6:00 a.m. on Black Friday, as that traffic long ago migrated to Thanksgiving Eve or online, yet many retailers continue to chase it.
While I am sure that there will be plenty of volume on Friday afternoon and over the weekend, the need to open early and promotionally on Friday morning seems to have passed. It’s now truly the Thanksgiving weekend that kicks off the holiday season. And the imperative is now to be truly successful over both Thanksgiving week and Cyber Week. That will be what makes, or breaks, the season for retail. We have seen Thanksgiving week share of holiday sales increase by about 2.5 points over the past 10 years. When combined with Cyber Week, those two weeks are approximately one-third of the nine week holiday season results, up about 5 points overall from results posted in the last 2000’s.
We noted on Twitter the strong lines on Thanksgiving evening, but most of those were at the largest retailers. Best Buy’s success on Thanksgiving, as a more specialty retailer, seems more and more like an aberration, a function of the strength of electronics as a draw for promotionally focused early holiday shoppers (as we would once again note that many of Thanksgiving night’s retailers, even those with only a tangential relationship to CE, such as Kohl’s and Dick’s, led with or focused on CE products as traffic drivers and interest builders).
On the product side, my colleague Ben Arnold has done an admirable job of calling out the new sales opportunities for consumer electronics in 2016, including Smart Home, VR, Drones and Smart Hubs. However, the real focus of holiday 2016 has been big screen and 4K/UHD TV with record low pricing and seemingly endless demand over the last two days (check out my Twitter timeline for some comments on that) propelling what promises to be a record end, to a record year in TV sales. Among the other traditional categories, PCs, tablets and mobile phones remain heavily promoted, but the broad appeal of TV, especially the newer technology and bigger screens, has been the prime catalyst for retail interest. Alongside TVs, an increased emphasis on mounts, cables and soundbars, all of which are exceptionally well positioned add-ons to big screen TVs, and benefit from the cleaner sales floor environment (less pile-it-high, pallet stack outs for 60 inch TVs than 32 inch TVs in the past) allowing retailers to fulfill demand for accessories that can add revenue and profit to the challenging Thanksgiving week TV pricing environment.
Despite the positive sprouts we have seen during Thanksgiving week, we would be remiss if we did not note the lackluster results for the first two weeks of November for CE and the weaker start to Q4 for CE. While these results can be explained by looking at the difficult comparisons to strong launch events in 2015 (iPad Pro and SP4/Surface Book), they do not account for the entire story. Sales in 2015 never capitalized on that strong beginning and left CE with poor results. Those weak comparisons give us reason for hope for this year’s performance. While the final judgment of the holiday, as always, awaits a complete accounting of sales for the entire nine week holiday season (which we will provide in our CES Research Summit wrap up) the CE business has faced challenges around pricing and demand throughout 2016 and despite the easy comparisons, success is not guaranteed.
This year my family spent Thanksgiving in Manhattan, making for a memorable post-dinner technology shopping tour in the city. Among the handful of stores I visited Thursday night, a trip to Best Buy on the Upper East Side really stood out. This wasn’t the big store I’m used to in Virginia; this smaller, city-sized Best Buy boasted a club-like atmosphere. It was packed at 10:00 p.m., long after the opening rush at 5:00 p.m., and an in-store Sonos system played Rihanna and Future throughout the building. A Beats mini-store on the lower level featured several headphones to demo. It felt more like a technology shopping party than a post-Thanksgiving bargain hunt.
The vibe in this Best Buy was well timed. According to NPD’s 2016 Holiday Purchase Intentions Study, more than a third (36 percent) of shoppers expect to buy technology products this holiday and shoppers even expect their spending on technology to increase (+5 percent this season). The growth in premium feature segments like television, imaging and tablets are certainly contributing to this, but the growing selection of products in emerging categories are also driving interest in CE around the holiday. In fact, this Black Friday, ample promotions around products like drones, voice-enabled speakers, and virtual reality headsets are helping drive shoppers to the stores.
Most of these new product categories offer a diverse range of price points. For those looking to try VR, products like the Oculus Rift and PlayStation VR are available, as well as Google’s Daydream ($79) and Zeiss VR One ($99). The idea of a voice-controlled speaker was nearly unimaginable for most consumers just two years ago, but Google Home is on sale this weekend for just $99, and Amazon’s Echo Dot can be bought for as little as $39. So far, drone promotions have ranged from $59 to $999. In somewhat of an unusual occurrence, this wide array of pricing has made these new technology products more accessible to shoppers this holiday.
This bodes well for the shopping season. In addition to the attractive promotions on 4K TVs, PCs and cameras that we have become accustomed to, shoppers are flocking to stores to buy these new technology categories – not just try them. To me, that will be the real story of Black Friday – the ability of new, interesting products to get tech shoppers to come out to the stores.
In August, Sonos announced that its line of multiroom speakers and soundbars would be compatible with Amazon’s digital voice assistant, Alexa, allowing users to cue up music on their speakers and soundbars by voicing a command to any of Amazon’s Alexa-enabled-devices. From a user experience point of view, this type of integration makes perfect sense. Voice, whether in controlling your lighting or simply finding out the weather forecast, is an easy way to access information quickly, but is also surprisingly natural for controlling audio. A year into owning an Echo, I’ve found voicing a command to Alexa to play music is a lot easier than flipping through pages of apps and menus on my phone.
The Sonos announcement is yet another sign that voice control, and by extension digital voice assistants, are quickly impacting how we use technology hardware. According to a recent NPD Omnibus study, 38 percent of consumers have used a digital voice assistant like Alexa or Siri. Most have become familiar with digital assistants via their phone, and in fact, 86 percent of those polled said they have used a digital assistant on their smartphone. The phone is a great device for voice assistant applications, but the use case for these applications differs depending on the devices they run on and where they’re located. So far, Amazon’s Echo speakers have focused on interoperability with smart home products in addition to the skills or voice apps they add each week. With this in mind, Alexa is most helpful at home if she can be accessed in multiple rooms. This is precisely why Amazon revamped their Dot speaker and dropped the price to $50. The goal for Amazon here is not necessarily to sell speakers, but to sell consumers on Alexa everywhere.
Interestingly, a symbiotic relationship exists between voice assistant applications and the smart home market. For wider adoption, digital assistants need to demonstrate they are useful for things other than setting timers and connected home products need to show they add real value to the home – not just connectivity for connectivity’s sake. Pairing the two together creates a scenario where consumers can experience the best aspects of both.
In the short time since the Echo went mass market, we’ve seen other devices integrate voice. In September, GE announced that its connected Monogram and GE-branded appliances would be controllable via Alexa, while camera and drone maker GoPro also added voice control to its new Hero 5 cameras. These products join Google’s forthcoming Home speaker and Jam Audio’s Jam Voice in a quickly growing field of voice enabled CE devices. Over the next 12 to 18 months, expect voice to become the newest ‘gotta have’ feature in consumer technology with TVs, cameras, and even A/V receivers potentially adding the feature. This is in addition to the numerous PCs, mobile devices, and smartwatches that already offer voice control. Whether the feature is built-in or arrives in the form of a connecting device like the Dot, voice control and digital assistants are poised to change the way consumers interact with technology products.
Yesterday Apple introduced the iPhone 7, which now lacks a 3.5mm headphone jack, ending several months of speculation that Apple would remove the port from the phone. There are likely several reasons for this design change. Eliminating the headphone jack would make room for a slightly larger battery and taking a port out of the phone helps protect the phone against water and dust damage. Additionally, Apple and Beats each announced their own Bluetooth products yesterday, and while eliminating the headphone jack from the iPhone will likely boost demand for Bluetooth headphones of any brand, Beats and Apple will certainly benefit.
Stereo headphone sales have been migrating towards Bluetooth for the past few years, so the removal of the headphone jack isn’t quite as sudden as it seems. In fact, for the 12 months ending in July, Bluetooth accounted for 45 percent of all headphone revenues and 13 percent of units, up from 31 and nine percent, respectively the year prior. In June and July of this year, Bluetooth sales even surpassed that of wired headphones, accounting for 52 percent of sales during those two months. The growth in Bluetooth is the result of increased affordability (today a third of Bluetooth units are priced $50 or under), the growth of the fitness headphone segment and an overall realization that Bluetooth provides a decent level of audio quality along with the convenience of eliminating wires.
Despite the make-up of the stereo headphone market naturally trending towards more Bluetooth, the iPhone 7 launch is likely to drive increased demand for Bluetooth headphones. A recent NPD study, fielded in the days leading up to the iPhone 7 announcement, found 60 percent of likely iPhone 7 purchasers (who expect to buy the phone within the next six months) already intend to buy a pair of Bluetooth headphones within that time frame. When these iPhone 7 buyers were then presented with a visual concept and explanation that the headphone jack on the phone would be removed (replaced with a pair of Lightning connector headphones and an adapter at purchase), their purchase intent for Bluetooth headphones rose to 78 percent- more than three times the purchase intent exhibited by smartphone owners (irrespective of their smartphone buying intentions or favored brand). According to these findings, most who expect to purchase the iPhone 7 consider buying Bluetooth headphones a near certainty.
As we’ve seen with the change from the 30 pin to Lightning connector on iPhones and iPods (which helped to launch the nearly $2 billion wireless speaker market), as well as the decline in USB ports and optical drives on Macs, Apple is not one to maintain the status quo when it comes to ports on devices. While yesterday's announcement seems extreme given the legacy of the 3.5mm input, smartphone design has always pushed boundaries. With Bluetooth now accounting for a majority of headphone sales, the elimination of the headphone jack in the iPhone 7 is more of an adjustment to how consumers are listening to music rather than a true shock to the system.
Although it is often best to take a skeptical view of the likely success of nascent technologies, virtual reality and augmented reality (VR/AR) are the exception to the rule. Government, military and entertainment verticals have been trying to harness the potential of VR/AR for years. Today the convergence of technology and demand are finally coming together to create a market for mainstream commercial and consumer adoption. Let’s look at where we see applications in the business-to-business market today and what we think that will look like in the future from a vertical market perspective.
Commercial applications, while not as widely talked about as consumer ones, are working to make themselves known. Currently, flight and military simulation are key applications but, undoubtedly, more are on the way.
In healthcare, we are seeing firms leveraging virtual reality to help patients deal with phobias such as fear of flying, claustrophobia and anticipatory anxiety via exposure-based cognitive-behavioral therapy. Another area where we are already seeing tremendous interest is in training simulations for situations that could arise in the ER, operating room or code blue emergencies.
For real-estate, VR is a natural opportunity (just like drones) to enhance showing commercial and consumer properties. For example, sites such as Youvisit.com and Sotheby’s offer 360-degree view or VR tour options. In the future, we believe that not only will you be able to view the property in VR, but you’ll have the option to adjust what season or time of day you’re in when inspecting room-by-room to see how the light in the house or property changes (a key decision when buying a property). VR can easily add interactive neighborhood statistics and augment the home tour with a Google Earth-like experience to allow the buyer to see the entire neighborhood, not just the home.
In hospitality and tourism, similar to the real-estate industry, firms are starting to leverage VR to show properties via virtual walk-throughs. For example, if you’re planning a soiree such as a wedding or corporate event, this technology could help to accelerate the process. Vacation planning would be easier too, allowing you to explore the scene ahead of time to make the most of your trip or venture to spots that are frequently missed.
Publishing may not be as advanced as other verticals, but a little vision could open the door for new products and services. YouTube, showed the potential of sharing videos and how-to’s on repair issues, creating a whole new category of publishing. VR can take that a step further by delivering a virtual reality repair manual for your car that could not only show you where to locate the problem, but also overlays the proper tools coupled with where to buy any needed parts. VR could also have applications for students studying subjects such as physics, science and history, allowing the student to see cause and effect or walk through a historical site in real-time – a virtual reality textbook.
VR/AR has the potential to reinvent the processes that are at the core of many of today’s key B2B verticals. While many of the examples above are consumer oriented in usage, the experience is powered by commercial applications coupled with the underlying hardware infrastructure. As more industries become interested in VR/AR strategies, support will be delivered through a channel partner that is well versed in the underlying challenges of supporting VR/AR (e.g., storage, networking, infrastructure and application software, etc.). The potential for VR/AR to remake many of today’s vertical markets is immense and that reinvention doesn’t have to leave the channel outside the opportunity. As the trend gains ground, we expect the channel to leverage its vertical and technological expertise and help unlock the potential opportunities for VR/AR.
Interested in reading about the consumer applications of VR/AR technology?
To read about today’s hottest tech categories and the opportunities for selling to consumers vs. B2B markets, check out this post by Stephen Baker, The Business of Consumer Tech is Increasingly… Business
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