CEA Research Summit: CE, Retailing, Tablet PC Survey Stats
Consumer electronics industry analysts and media were treated Thursday to a comprehensive statistical overview designed to clarify growth areas in consumer technologies and retailing for 2011.
Leading off the CEA Research Summit at New York City's Samsung Experience Center, CEA’s chief economist and director of research, Shawn DuBravac, reprised key points from his Wednesday presentation to press members attending the CEA LineShows. (A full report may be found by clicking on the “Related” news link within this article.)
He also provided some perspective on the effects of the March 11 Japan earthquake and tsunami on CE production, saying that earlier, pessimistic views on long-lasting effects were so far unfounded. “There’s not a lot of finished product production from that area of Japan,” and that the effects of disrupted component and semiconductor manufacture would take a while to work its way through to the supply chain. “These issues are a July-August story, not a March-April story,” he added, saying that any short-term needs had been handled from factories outside Japan taking up the slack.
Steven Koenig, CEA director of industry analysis, and Eric Voyer, vice president of TraQline, co-presented a report on retail trends. Some highlights:
• More than half of all cellphones currently owned are smartphones (52 percent).
• In the four quarters ending with Q1 2011, 62 percent of people shopped online for products, but only 30 percent actually bought products online. “Consumers are using technology to purchase technology,” observed Koenig of the trend.
• Price erosion in TV is much more dramatic in mid-range screen sizes (26 to 53 inches).
• In the four quarters ending with Q1 2011, 60 percent of flat panels were bought by households with annual incomes below $75,000.
• 64 percent of those surveyed have experienced 3D technology firsthand while 19 percent have not, while only five to seven percent of TVs sold are 3D. “There’s lot of opportunity there,” said Voyer.
• Consumers who are more highly price-sensitive will tend to spend less.
• Customers are becoming more interested in the “green” aspects of CE; this could ultimately help to sway purchasing behaviors.
• The way for retailers to cope with the trend of consumers collecting in-store retail competitive pricing information is to embrace consumers’ empowerment, get onboard with in-store connectivity to enable demonstration, and create an exciting, open salesfloor.
• Amazon.com is winning more purchase dollars of Best Buy and Walmart CE shoppers. “Dealers need to be aware of the cross-shop,” said Voyer, and need to build an online presence beyond a web site, employing social media and videos, added Koenig.
CEA’s Ben Arnold, senior research analyst, and Chris Ely, manager, industry analysis, gave an overview of the tablet market. Arnold led the data summary by noting that at the 2011 International CES in January, more than 100 tablet models were trumpeted as destined for market introduction by suppliers. Ely, at the conclusion of the summary, predicted that even with significant unit sales growth and a high rate of tablet adoption, “probably fewer than 100” would arrive on salesfloors in the immediate future. Some highlights from the presentation:
• By the end of 2011, worldwide tablet adoption will reach 42 million, up from just 16.6 million in 2010.
• In the four-quarter span from its market launch, Apple’s iPad outsold the iPod for that product’s same initial market launch period fiftyfold, and outsold the iPhone fourfold for the same inaugural stretch.
• In 2011, 88 percent of households own PCs while 18 percent own tablets. In 2010, 85 percent owned PCs while just eight percent owned tablets.
• One in three non-PC-owner households expects to purchase a tablet (six million households). “This is significant for a category virtually non-existent 18 months ago,” remarked Arnold.
• 12 percent of U.S. households (about 14.3 million) plan to buy a tablet this year – almost the same number as will buy a desktop computer.
• One in three households that owns a tablet expects to buy another tablet in the next year.
• 47 percent of those surveyed say they ‘Never’ plan to buy a tablet. “That number is expected to decrease as tablets become more familiar and entrenched,” said Ely.
• Six in 10 households with children under 18 will buy a tablet in the next two years, and more than half in the 45-to-55-year-old age group intend to buy a tablet.
• The “sweet spot” price point for a tablet is $328, with the highly acceptable range running from $301 to $444.
• Tablets are currently primarily used for web browsing, email checking, video watching and book or periodical reading – consumption versus creation. But that should change, as tablets make their way into enterprise applications in business and education.
• Reasons most cited for purchase include ease of portability, travel appropriateness, apps accessibility, and a liking for the brand or manufacturer. Only 26 percent said tablets were bought as a replacement computer.
Arnold said this indicates “they are not necessarily cannibalizing other products; they’re bought as an additive.” Supporting this assumption is data revealing that four in 10 tablet owners expect to buy a laptop in the next two years and 40 percent of them intend to buy a desktop computer in the next two years. “This gives credence to tablet owners being PC enthusiasts,” he said.