With just over a billion people around the world having a smartphone in 2012, and the next billion smartphone adopters joining in within the next five years, smartphones have reached a tipping point. Malcolm Gladwell defines the tipping point as “the moment of critical mass, the threshold, the boiling point” within a sociological ecosystem. A technology hits critical mass when one-fifth of the population adopts it. For smartphones, developed economies witnessed this phenomenon in 2011.
North America and Europe top the global smartphone penetration rates, at 47% and 35%, respectively. However, they are outpaced in terms of the sheer number of users by the Asia Pacific region. In fact, China alone already has more smartphone users than any other country in the world. And our forecast shows that Asia Pacific is also the fastest-growing region for smartphone adoption, projected to increase by approximately 20% per year.
In the Forrester Research World Smartphone Forecast 2012 To 2017 (Global), we investigate the size, speed, operating system (OS) dominance, and user demographics of the competitors in the world’s smartphone showdown. Younger and wealthier adults are the early adopters of smartphones, but there will be a gradual progression toward adoption by lower-income and older adults as smartphones become cheaper and the offerings of basic phones become more limited.
Tablet ownership in Western Europe is set to quadruple in the next five years: The percentage of European online consumers who own a tablet will increase from 14% in 2012 to 55% in 2017, according to the Forrester Research World Tablet Adoption Forecast, 2012 To 2017 (Global). This dramatic growth follows what was a pivotal year for tablets: Ownership doubled in 2012, and one in seven online Europeans now owns a tablet. The recently published Forrester report “The European Tablet Landscape” draws on our Technographics® data and looks at the profile of European tablet owners and their usage patterns. We found that:
Unsurprisingly, tablet owners are tech-savvy. Today, tablets are most popular with 18- to 24-year-olds, with one in four online consumers in this age group now owning a tablet. Of all tablet owners, a high 45% state that they “like technology” and 36% agree that “technology is important for me.”
Income is a driver . . . for now. About 24% of high-income European online consumers have a tablet, compared with 15% of online low-income consumers. But the growing variety of tablets and form factors as well as more competitive pricing will make tablets affordable for a wider range of consumers.
Earlier this week, I attended a briefing with a vendor around analyzing and structuring consumer ratings and reviews; the vendor aims to give companies more guidance during the product development stage or help them understand where a current product is in its life cycle depending on the number of reviews that product is getting compared with its competitors.
The concept is interesting, but it got me thinking about the process of ratings and reviews a bit more. How many people are actually giving ratings and reviews, who are they, and why are they giving feedback?
Forrester’s Consumer Technographics® global online benchmark surveys in Q2 2012 revealed a wide variation between countries in terms of the share of the online population that actually gives feedback. In metropolitan India and China, about three-quarters of online consumers post ratings/reviews of products or services at least monthly; in Brazil, it’s about a third; while in the US and Europe, it’s less than 20%.
However, far more people rely on ratings and reviews than give them — particularly in the US and Europe. More than 50% of US online consumers check ratings and reviews regularly, for example. And consumer reviews and ratings are the second most trusted source of online shoppers when buying a product, after family and friends.
Mobile payments saw continued innovation and competitive disruption throughout 2012, but consumer adoption lagged behind the industry hype. The Forrester Research Mobile Payments Forecast, 2012 To 2017 (US) shows that US consumers will adopt mobile payments at an accelerating rate over the next five years, reaching $90 billion by the end of 2017. Lower barriers to adoption, increased convenience, and early entrants striving for scale will be important drivers of growth.
eReaders are set to have one of the shortest growth life cycles in device history. Between 2009-2011 the average annual sales of dedicated eReading devices in the US grew by more than 100%. In 2012, US dedicated eReader sales growth will be negative. The decline of the eReader is driven by the availability and affordability of tablets, with global tablet sales in 2012 set to reach more than 120 million.
The Forrester Research eReader And eBook Adoption Forecast, 2012 To 2017 (Global)analyzes eBook adoption drivers across more than 50 countries. Heavy readers like eBooks. In the US, eBook readers read an average of 24 books per year compared with just 15 books for non-eBook readers. In addition, eBook readers are becoming more device-agnostic, with similar eBook reading levels observed across tablets and dedicated eReading devices.
We used the following drivers to calculate our forecast for eBooks and eReaders
I was in the US this week, visiting our headquarters in Cambridge, and the topic of loyalty cards and loyalty programs came up. I live in the Netherlands, and although there are plenty of loyalty programs to subscribe to, the benefits aren’t any way near what you get from loyalty programs in the US. Because of that, I normally base my travel choices more on convenience and price than on the hotel chain or airline. But our North American Technographics® Travel And Auto Online Benchmark Recontact Survey, Q3 2012 (US) shows that this is different for US travelers.
US hotel travelers clearly see the benefit of subscribing to a loyalty program for the hotels they visit regularly. In fact, our data shows that about 40% of US online leisure hotel travelers belong to at least one hotel loyalty program. And those who belong to a hotel loyalty program are 10 percentage points more likely to recommend a hotel than leisure hotel travelers who are not part of a loyalty program.
However, the majority of leisure travelers who belong to a loyalty program are Gen X; younger travelers account for only a quarter of current loyalty program subscribers. Hoteliers who want to benefit from social sharing and recommendations should tap the potential of their loyal younger customers in particular.
Since the launch of the iPad in 2010, more than 200 million tablets have been sold worldwide. Compare this with the laptop, which went from 2 million unit sales in 1990 to just 29 million 10 years later. Tablets have already started to cannibalize laptop and eReader device sales, as they offer distinct advantages over the laptop — they’re lightweight, have a long battery life, and provide convenience via a touchscreen and their “always on” mode.
· A growing online population: By 2017, the majority of the worldwide online population will reside in Asia Pacific; this region will contain 34% of tablet owners. Europe and North America will follow.
· The fall of tablet prices: For example, the Turkish government plans to distribute domestically produced tablets to 15 million students for free.
Ten years ago, the most common way to connect to the Internet at home was via a PC or a laptop. Now, connectivity at home is increasingly being supplemented by tablets, smartphones, and other media devices, although PCs/laptops still dominate. Consumer electronics device manufacturers cashing in on this shift are offering Internet-ready capabilities in many of their devices. Although the notion of “connected devices” can be quite broad, we focused specifically on game consoles, Blu-ray players, and high-definition (HD) TVs in our recently published Forrester Research Connected Devices Forecast, 2012 To 2017 (US). Here is a brief commentary on each of these device segments:
Game consoles: In 2012, the game console manufacturers experienced declining sales. Unlike in the past, when the introduction of a new console generally saw significant uptake in sales, Nintendo’s Wii U (launched in Q4 2012) is not expected to hit the peak sales of the original Wii. We believe that this trend will be seen more broadly in the game console industry. This is largely (though not exclusively) driven by the availability of low-cost/"freemium" titles on smartphones and tablets, which fulfill the gaming needs of the casual gamer — and have a negative impact on the console market. However, we still expect the console market to see moderate growth. By 2017, the majority of consoles will be “connected” to an IP connection because consoles are multi-purpose and allow users to do many activities online such as rent/buy movies and TV shows, purchase games, watch streaming videos, and listen to streaming music.
At this time of the year, many people make resolutions — and many of these are health-related: quit smoking, exercise more, or eat healthier. As anyone who has ever made one of these resolutions knows, it's really hard to make a change. But there’s plenty of technology out there that can help track your progress and give you a bit of support.
Forrester’s Technographics® data shows that about one-third of US online smartphone owners use their phone for healthcare-related activities, ranging from tracking what they eat to text alerts about medication:
However, using technology to track your health hasn’t reached the mainstream yet. In fact, many consumers don’t consider this to be very appealing. Recently, my colleague Lindsey Colella hosted a project in Forrester’s market research online community to better understand the relationship between technology and health. In her report 'Digital Health Management Needs A Makeover To Broaden Its Consumer Appeal', she shows that the average consumer is skeptical about health-tracking technologies. Our respondents believe that using technology to track your health is either for people with a chronic disease or people who are obsessed with their health. Most of them prefer to rely on their doctor for guidance instead.
I am delighted to announce that our annual report on The State Of Consumers And Technology: Benchmark 2012, US is now available. This report is a graphical analysis of a range of topics about consumers and technology and serves as a benchmark for understanding how consumers have changed over the years. For those of you who aren't familiar with our benchmark report, it's based on Forrester's annual Technographics® online benchmark survey that we've been fielding since 1998 and for which we interview close to 60,000 US online adults. The report covers a wide range of topics, such as online activities, device ownership — including penetration data and forecasts for smartphones and tablets — media consumption, retail, social media, and a deep dive on mobile.
We analyze our findings through a generational lens, including Gen Z, Gen Y, Gen X, Younger Boomers, Older Boomers, and the Golden Generation. Age is a key factor behind consumers’ usage of and attitudes toward technology. However, one finding spans the generations: Consumers of all ages embrace the opportunity to find information and connect with people and brands wherever they are. And while online penetration in the US remains the same as a year ago — at 79% of all adults — the depth of Internet usage has grown; more consumers go online on a daily basis and they connect on more devices. The graphic below illustrates our point: US smartphone owners use their device almost everywhere. They aren’t just connecting at home but wherever they go; in fact, they’re more likely to access the Internet on their phone in a store than in their own kitchen.