Pi Attitude Zone: Material Status

Consumer Electronics Innovation Deficit

Pi posted a piece [“Cool Stuff” getting, well …Less Cool?] in the week of CES 2013, (the huge annual Consumer Electronics Show), suggesting that US consumers were beginning to evidence some kind of ‘tech fatigue’ in relation to consumer electronics (CE) products.  Pi further conjectured that this might have something to do with the CE industry’s waning track-record in producing life-changing “must-have” innovations.

The numbers are in for 2012, and they bear out Pi’s concerns.  CE sales have dropped away by $4 billion in two years.  2011 saw a -1% sales dip, and this doubled to -2% in 2012.  Why?

The two main factors cited by the industry are “market saturation” and the dampening effects of recession on overall consumer spending.  Both are plausible suspects as reasons for lost business.

But Pi has examined the trends for individual electronic devices, and thinks there is something else going on here, something directly to do with consumer attitudes and expectations.

In 2012, 53% of US consumer electronic sales were ‘big five’ products: smartphones, flat-screen TVs, desktop computers, notebooks and tablets.  These product types represented only 49% the previous year, so their collective hold on consumer desires seems to be growing.

Except that three of the five are in decline, with sales of desktop and notebook computers down about 10% year-on-year;  flat-panel TVs were off by 7%.  It was mobile devices like tablets and smartphones that made all the running, boosting their sales by 42% and 25% respectively. 

Of course it’s nothing new for each year’s CE sales to be led by a dominant technology type.  In 2012 it was mobile communication devices that many consumers considered the “must-have gizmos”.  But few other tech innovations seemed to be coming up behind them to lead future sales. That seems to support Pi’s ‘tech-fatigue’ thesis.  Consumers’ imaginations seem insufficiently fired by bendy screens and phones you can submerge in water, however much those innovations might protect people’s precious electronic possessions from disaster.

Of even greater concern to CE manufacturers should be the disquieting possibility that each “must-have technology” may be getting a shorter day in the sun than its predecessors.

Innovation as a market driver will probably have to come up with something better than the HAPIfork (see Pi’s “Cool Stuff” blogpost) to set people’s hearts racing again.

Zone: Material Status Country: USA / North America Product – Consumer Products