An annual consumer electronics technology trend-watch for 2012 holds few surprises. "Consumer electronics are driving technological change" is the gist of the press release, but there are a few items worth highlighting for the electronics industry.
The first trend from the survey, conducted by Verizon Communications Inc. (NYSE: VZ), is worth skipping. It says technology is making everything mobile, consumer-driven content is exploding on sites such as YouTube, and the work/home boundaries are becoming blurred.
Here are the trends worth noting, with some additional analysis:
More Shelf Space
It's why you'll have more shelf space that's important. Physical belongings, from CDs to books to pictures, are evaporating into the cloud, and even hard drives are slimming down. For the most part, consumers could care less about jargon or the title of "the cloud." They just want out-of-the-box experiences for ones that used to be more complex -- and since that's happening at a faster pace, we'll continue to see less clutter and more virtual shelves.
It is true that fewer CDs are cluttering the shelves, and the number of devices consumers are buying is skyrocketing. Many consumers own a PC, a smartphone, and a tablet, all of which do many of the same things. Let's not forget the gaming system, as well. Eventually, these devices will converge into a single unit, but until then, the electronics market isn't going to shoot itself in the foot by bringing the "uber-device" to market anytime soon. Overall, this is good news for the supply chain.
Value of High-IQ Networks
The average American home will go from having about four connected devices to double that by 2014. Many of the Verizon employees who were polled in an informal survey far exceeded that number. With each new smart device or app, the value of the network that connects and enables them increases exponentially. The quality of the network will become increasingly relevant and "cool," which results in better user experiences for those who choose wisely.
When Verizon says "value," what it really means is "cost." Every box, every remote, every connection, and almost every service has a fee embedded in it somewhere. Again, there's no incentive for manufacturers to converge consumer electronics into a single device or a centralized "control room" as long as companies are able to sell lots of stuff. Nor is there any incentive for the service providers to do so. "Choose wisely" is good advice.
What's That You're Watching?
The old model of home entertainment is dead. Video is appearing everywhere -- from movies on tablets to video conferences (both gabbing teens and on-the-go executives). New infrastructure, apps, and partnerships will be formed to meet the growing demand.
I see this as one of the few positive trends. However, once again, watch for those fees. On-demand programming is convenient and means you are not tied to one place and time to view a program. Did we mention you can do this while being mobile?
Digital Door Locks
No need to call a locksmith. We're talking about securing consumers' virtual valuables (identity and personal information). Today's anything, anywhere access underscores what Internet security experts have been saying for years: Security has to be everyone's responsibility. Even the basics aren't cared for in some instances; in fact many people still don't have a password on their home routers and don't encrypt important communications. A proliferation of tools and services will help make consumers more security conscious.
Actually, it's not the tools and services that will make things secure. It's consumer practices. Don't get frightened into buying more of these tools and services -- most already exist.
Who doesn't want to help save the environment and save money in the process? Smart energy management is going mainstream, and consumers will increasingly rely on a variety of plug-and-play devices -- from smart thermostats to lights that know you're walking into the room and light up -- to monitor and control energy usage. This will lead to lower energy costs. A recent government study found people curbed their energy use once they had the means to monitor and adjust their usage.
It's not that easy yet, but consumer electronics are getting more energy efficient, as are homes and grids. This will remain a growth industry for the supply chain. The key will be ease of use. It will be imperative that a plug-and-play solution is developed for the electronic devices, the controllers, and the interfaces that connect homes and businesses to the grid.