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Competecewhitepaper Document Transcript

  • 1. Consumer Electronics 2010The Year in3DTVs, Tablets,eReaders, andSmartphonesTechnology and Entertainment PracticeDecember 2010
  • 2. Table of Contents 04 Executive Summary 06 3DTVs Interest in 3DTVs is growing, but tepid acceptance of polarized glasses is slowing consumer adoption 09 Tablets In a developing tablet landscape, the iPad is still king 12 eReaders Despite an onslaught of tablet competitors, eReaders continue to thrive… for now 14 Smartphones The “Attack of the Droids” was great news for HTC and Samsung, but came at the expense of more established smartphone brands 17 About Compete’s Technology and Entertainment Practice 19 Contact Information
  • 3. Executive Summary 05 2010 wAS An EVEnTful and transitional year in consumer electronics, Despite the success of the iPad and other tablet products, “death of thedriven by powerful supply-side and demand-side forces. On the supply side, 2010 eReader” headlines are premature: only 13% of online eReader researcherswas characterized by the establishment of an entirely new device category, by the considered a competing tablet, laptop or netbook product. This suggests thatrelease of several new landmark smartphone devices, and by the growing availability eReaders are largely complementary to tablets, and that eReader shoppers areof 3DTV-capable devices and content. On the demand side, 2010 saw a modest return actively shopping for a single-purpose device optimized for reading.of consumer spending, as the economic storms of late 2008 and 2009 lifted and US Apple is rightly credited with popularizing the touch-screen smartphone form-spending on consumer goods ticked upwards. factor, but it was the wide availability of Android devices in 2010 that made Compete looked back on the year to identify the biggest stories in consumer touch-screen mainstream. Across all carriers, interest in devices with touch-electronics in 2010, and four categories stood out: 3DTVs, tablets, eReaders and screens increased 23% from Q4 2009 to Q1 2010, while interest in devices withsmartphones. These categories defined consumer electronics in 2010 and will continue QWERTY keyboards decreased 16% during the same timeframe. This hugeto do so in 2011. This report highlights our most interesting findings in each of these shift in research behavior (in the first half of the year) was a harbinger of thecategories, including: smartphone market share shifts in the second half of 2010, shifts that benefited HTC and Samsung, at the expense of more established smartphone providers Online shopper interest in 3DTVs increased ten-fold from January to November, like RIM. but the percentage of 3DTV shoppers — relative to overall HDTV shoppers — is still surprisingly low. Even more problematic for 3DTV manufacturers is the fact that consumers are not interested in 3D glasses. At BestBuy.com, the number of unique visitors researching 3D glasses is less than one tenth the number researching 3DTVs. On the demand side, 2010 The week it was first available for purchase, Apple’s iPad was the most saw a mOdest return Of cOnsumer spending researched Apple product ever, as nearly 3 million US consumers researched the iPad online. Even as the tablet landscape grew more complicated in the second half of 2010 with the introduction of new tablet models, interest in the iPad grew, suggesting the tablet “pie” continues to expand.
  • 4. 3DTVs 07Interest in 3DTVs is growing, but tepid acceptance ofpolarized glasses is slowing consumer adoption Exhibit 1: 3DTV online Interest (Unique Visitors to 3DTV OEM product pages, Jan — Nov 2010) 200,000 JAmES CAmERon was already the self-proclaimed “King of the World”, but 180,000 160,000with the release of Avatar, Cameron can add another accolade to his resume: he 140,000 120,000reinvigorated the public’s interest in 3D video. Though the movie was released in 2009, 100,000after Avatar grossed over $760 million in US and Canadian theater revenues, 2010 80,000 60,000was a year marked by a slew of new 3D films and the release of 3D technology for the 40,000home theater market. Although three-dimensional video has been around since the 20,0001920’s, new advances in high definition and digital broadcasting paved the way for Jan ‘10 Feb ’10 Mar ’10 Apr ’10 May ’10 Jun ’10 Jul ’10 Aug ’10 Sep ’10 Oct ’10 Nov ’10the technology to enter the home in 2010. 3DTV enjoyed a “coming-out party” at theJanuary 2010 Consumer Electronics Show and throughout the first quarter of 2010, So while the supply of 3DTV hardware (and to a limited extent, 3D content)with a wide variety of companies announcing 3DTVs and 3D-capable services. continues to grow, there are a number of barriers keeping consumers from fully As we can see in Exhibit 1 below, online shopper interest in 3DTV models spiked embracing this new technology: high cost, long product-replacement cycles, andin the spring (after a number of these new products and services became available) the need for cumbersome accessories like polarized glasses. These first two barriersand again in November (reflecting a traditional seasonal increase). From April to — high cost and long replacement cycles — go hand in hand: with the widespreadSeptember, however, online shopper interest steadily declined, suggesting that interest adoption of HDTV over the last 3 years, a majority of the market is not ready to spendin the 3DTV experience — despite significant media hype — was not sustained. More $1,000 or more on yet another home theater appliance. This barrier should erodeimportantly, Compete found that 3DTV researchers represent just a small portion of overtime, however. As consumers start replacing or upgrading earlier-generationthe overall HDTV researcher segment: from January to November of 2010, an average HDTV sets in late 2011 and early 2012, we believe the percentage of HDTV shoppersof only 9% of HDTV shoppers researched a 3DTV model. Put another way, while the interested in 3DTV and smart TV technologies (such as Google TV and Apple TV) willoverall volume of 3DTV researchers increased ten-fold, those researchers still only likely increase.make up a single-digit percentage of the overall HDTV market.
  • 5. But it is the third adoption barrier — the fact that separate and expensive Tablets 09polarized glasses have to be worn to experience 3D imaging — that is the most In a developing tablet landscape, the iPad is still kingproblematic for 3DTV manufacturers. Consumers simply are not interested in polarizedglasses. At BestBuy.com, the number of unique visitors researching 3D glasses is less wIThouT quESTIon one of the biggest stories in consumer electronics in 2010 wasthan one tenth the number researching 3DTVs. Most 3DTVs are currently sold without the launch of the Apple iPad. As we can see in Exhibit 2, the success of the iPad wasany glasses included, or at best with just one pair. Since each viewer requires glasses, apparent its very first week of availability, when Compete observed a massive surgewe would expect online interest in 3D glasses to be approximately equal to interest of online shopper interest. Pre-launch interest in the iPad at Apple.com was relativelyin 3DTVs. The interest gap suggests that a large percentage of those consumers modest; a month after its announcement, US online interest in the iPad fell to belowresearching 3DTVs are not really serious buyers. 300,000 unique visitors a week. But the week the iPad was actually available for Furthermore, online conversion data reveals that an extremely small minority purchase (on April 3rd, nine weeks after announcement), online interest in the tabletof buyers are committing to a full, comprehensive 3DTV experience by purchasing a was nothing short of exceptional: nearly 3 million US consumers researched the iPad3DTV console and multiple pairs of glasses. If 3DTV technology is ever going to live the week of its launch, making it one of the most researched consumer electronicup to its considerable hype (Brian Dunn, CEO of Best Buy, admitted earlier this year products of the year, and, at the time, Apple’s most researched product ever.that “sales of 3DTVs had fallen behind industry expectations”), retailers and OEMsneed to address consumer concerns regarding polarized glasses. If they are unable Exhibit 2: Apple iPad online Interest — Indexed to Product Announcementto do this, we believe consumers will sit on the sideline until autostereoscopic 3DTV (Unique Visitors researching the iPad on Apple.com)technologies (which don’t require polarized glasses) become more widely available. 3,000,000 2,500,000 2,000,000the number Of 1,500,000cOnsumers researching 1,000,000 500,0003d glasses is less thanOne tenth the number A A +1 2 3 4 5 6 7 8 9researching 3dtVs
  • 6. However, since the launch of the iPad, the tablet landscape has changeddramatically. Consumers can now choose new Android OS tablets from Dell and It is not surprising that increasing interest in the Galaxy Tab has been accompanied by increased iPad interest — given the similarity of the two products, 11Samsung, and Palm and RIM have announced their plans to release WebOS and many consumers are wisely researching both. What is more surprising, however, isBlackberry 6 tablets, respectively, in 2011. Just as important, Apple’s retail and carrier the impact Verizon Wireless has had on iPad online shopper interest. Since Verizonpartner strategy changed dramatically, when Apple announced in October that the iPad Wireless does not provide integrated network connectivity for the iPad, the onlywould be the first Apple product available for purchase through Verizon Wireless. These product available through Verizon Wireless is the Wi-Fi iPad, sold as a bundle with achanges had many industry observers asking, how will consumer demand for the iPad MiFi mobile hotspot router. Nonetheless, traffic for the iPad product information pagechange in response to new competitive products and new channels? at VerizonWireless.com is trending upward. We believe that - in the eyes of many As we can see in Exhibit 3, since these developments online shopper interest consumers - this iPad/MiFi bundle is viewed as an entirely new product, and thereforein the iPad is on the rise. More importantly for Apple, interest in the Samsung Galaxy subject to the same comparison shopping behavior as the Galaxy Tab, or any otherTab at Samsung.com and interest in the iPad at Verizon Wireless.com is additive to competitive tablet.interest in the iPad at Apple.com. Put another way, these new products and channels However, despite Samsung’s early success with the Galaxy Tab (1 million unitsexpanded the pool of potential tablet shoppers, rather than stealing shopper interest sold globally in the first two months of availability), Apple has a fairly large head startaway from the iPad’s primary online channel, Apple.com. in this market. And while new products (notably RIM’s Playbook and the long-rumored HP/Palm WebOS tablet) will enter the tablet market, we believe the iPad will remainExhibit 3: Apple iPad and Samsung Galaxy Tab Interest — September 26 — november 20, 2010 the dominant tablet through 2011, or at least until devices with the tablet-specific(Unique Visitors to tablet product landing pages on Apple.com, Samsung.com and VerizonWireless.com) ‘Honeycomb’ version of the Android operating system are more widely available.700,000600,000500,000400,000300,000200,000100,000 9/25/10 10/3/10 10/10/10 10/17/10 10/24/10 10/31/10 11/7/10 11/14/10 Apple.com Samsung.com VerizonWireless.com
  • 7. eReaders 13Despite an onslaught of tablet competitors, eReaderscontinue to thrive… for now Exhibit 4: eReader Cross-shoping with laptops, netbooks and Tablets (Percentage of consumers researching eReaders who also researched Laptops, Netbooks or Tablets, Oct 2009 — Nov 2010) 15% ThE SuCCESS of ThE IPAD in 2010 lead many to speculate that otherCE product categories — including netbook computers, portable gaming systems, 12%multimedia devices and eReaders — would decline in the face of competition from 8%multi-purpose, ubiquitously-connected tablets. eReaders in particular were thoughtto be vulnerable. Since the introduction of the iconic Amazon Kindle in 2008, eReaders 4%have been one of the fastest growing CE categories. But the introduction of tablets — 0%with additional computer-like functionality, web-browsing capabilities and comparable Q4’09 Q1’10 Q2’10 Q3’10 Q4’10size/weight/portability dimensions — provided consumers with an extremelycompelling alternative. Amazon seemed to acknowledge the implicit threat fromtablets (and even larger smartphones, like the 4.3 inch DROID X) by making the than competitive with) tablets. It also suggests that eReader shoppers are activelyKindle application free and readily available from both Apple’s iTunes store and the shopping for a single-purpose device optimized for reading, and not a multi-purposeAndroid Marketplace. computing device. But based on Compete’s analysis of consumer online research behavior, In many ways, eReaders should be viewed similarly to devices in the portableit is clear that eReaders are not destined for obsolescence — at least not in 2011. music space: despite the wide availability of affordable, music-capable smartphonesIn December 2010, unique visitors to the eReader product category were actually 84% - most consumers prefer to have a separate device for their music needs. (Based onhigher than in December 2009. More importantly, as we can see in Exhibit 4, only 13% Compete’s Q2 2010 Smartphone Intelligence survey data, only 35% of smartphoneof eReader researchers, on average, also considered a competing device (such as a owners use their phone to listen to music on a weekly basis, while 37% never do so.)tablet, laptop or netbook) in 2010. This modest rate of “cross-shopping” behavior is As eReaders become increasingly affordable, we believe eReaders will continue toespecially notable, given much higher rates of netbook and tablet cross-shopping. thrive as complementary devices (similar to digital music players) throughout 2011. The increase in overall eReader interest, combined with low rates of cross-shopping suggests that eReaders are largely complementary to (rather
  • 8. Smartphones 15The “Attack of the Droids” was great news for hTC andSamsung, but came at the expense of more established Exhibit 5: hTC and RIm Share of Interest Across Big 4 Carrier websitessmartphone brands (Average monthly share of interest for indicated OEM, Jan — June 2010) 30% ThE nEwS In AuGuST that Android was the leading smartphone OS in the 25% 20%US, surpassing both RIM and Apple, was a potential watershed moment in the wireless 15%device market. When the first Android phone — the G1 — launched in 2008, the 10%thought that Android would surpass RIM for smartphone supremacy was outlandish. 5%There are a number of reasons for Android’s rapid ascent in 2010, but one of the most 0% Jan Feb Mar Apr May Junimportant reasons is also one of the simplest: Product adoption begins with consumer HTC Monthly Average RIM Monthly Averageinterest, and if you want to maintain consumer interest, it helps to regularly launch newproducts. If those new products are very good and meet a wide variety of consumerneeds, consumer interest will dramatically and quickly increase. Or consider Samsung, which has sold more than 4 million Android OS Galaxy There was a steady flow of very good, ‘buzz-worthy’ Android devices throughout S devices in the US since the line first launched in the summer of 2010. Samsung2010: the HTC EVO and Droid Incredible, the Motorola DROID 2, DROID X, and DROID hasn’t announced sales by carrier, but by using Compete’s 2010 Device DemandPro, and the Samsung Galaxy S phones: Vibrant, Fascinate, Epic and Captivate. Measurement data, we analyzed online interest trends for the Vibrant (at T-Mobile),While no one Android device could be considered a ‘blockbuster’ hit on par with the Captivate (at AT&T) and Fascinate (at Verizon Wireless). We found that the Vibrant atApple iPhone 4, collectively they have helped to drive significant, sustained consumer T-Mobile garnered the highest share of online shopping interest in Q3 2010 — at itsinterest in the Android platform. This interest paid huge dividends for manufacturers peak, 25% of all T-Mobile handset researchers evaluated the Vibrant — a blockbusterthat embraced the Android platform, like HTC and Samsung in 2010, and helped shift interest level and a leading indicator of strong Q4 device sales.consumer attention away from more established smartphone manufacturers like RIM. As mentioned above, the success of HTC and Samsung in 2010 came largely Let’s look first at HTC. In the first half of the year, HTC benefited from a deep at the expense of more established smartphone OEMs, like RIM. RIM’s strength hasproduct pipeline of Android devices - releasing at least one new device a month from always been building email-centric devices with great keyboards, battery life andFebruary to July. As we see in Exhibit 5, this approach helped HTC steal significant durability to appeal to hard-charging corporate executives, but the market is clearly“interest-share” from RIM. HTC and RIM began 2010 garnering nearly an equal share moving away from email-centric, QWERTY keyboard designs: across all carriers,of consumer interest, but since the announcement of the EVO 4G in March, HTC’sshare of interest steadily grew.
  • 9. interest in devices with touch-screens increased 23% from Q4 2009, to Q1 2010, About Compete’s Technology and Entertainment Practice 17while interest in devices with QWERTY keyboards decreased 16% during the sametimeframe. This huge shift in research behavior (in the first half of the year) was a ComPETE‘S TEChnoloGY AnD EnTERTAInmEnT PRACTICE works withharbinger of the market share shifts the industry would see in the second half of 2010. consumer electronics manufacturers, national retailers, telecommunications carriers, With that in mind, we expect 2011 to be another challenging year for some of media companies and their marketing partners to apply digital insights to improvethe more established smartphone brands. If 2010 was notable for the entrenchment research and marketing initiatives. Compete, a Kantar Media company, is located inof the Android and Apple platforms, 2011 will be defined by the efforts of remaining Boston, MA, with offices throughout the U.S.smartphone platform providers — including RIM, Nokia, Palm and now Microsoft, with Using the largest online panel in the industry, the Technology and EntertainmentWindows Phone 7 — fighting for third place. team analyzes consumer research and shopping behavior to identify the most important trends in consumer electronics. Online behavior is critical to consumer electronics consideration — consumers consistently cite OEM, carrier and third-party websites as the most important to their research process — and based on the online behavior of millions of US consumers, Compete can measure: Unique Visitors: The volume of unique users researching a product or product category, measured over time to show the growth or decline of consumer awareness and demand Conversion: The volume of unique online orders, to measure online purchase behavior Share of Interest: The measure of the number of unique visitors researching a specific device or product category as a percentage of all unique visitors researching all comparable devices or competitive product categories Cross-shop: The percentage of researchers of one device or product category who also research a second device or product category
  • 10. The Technology and Entertainment team brings deep industry and online for more Information, Please Contact 19marketing expertise from their experiences at Apple, AT&T, PRTM, Bearing Point,Yankee Group Research and Sprint. The team speaks frequently at industry Dave Kalilconferences including CTIA, CES, CTAM, OMMA Mobile and the Cable Show. Sales Director, Technology and Entertainment This report was prepared by Christopher Collins, Tim Davison, Nathan dkalil@compete.comIngraham, Karen Parker and Aniya Zaozerskaya. Office: 979.694.5318 Mobile: 979.739.1645 Christopher Collins Director, Technology and Entertainment ccollins@compete.com Office: 617.933.5641 Mobile: 617.869.6545
  • 11. compete.com