[Technology Report]
Megatrends Of The Future Will Feed Off Industry Hype
Industry analysts see key gains in store for several market sectors, thanks to revolutionary leaps in technology.
“More than 50% of American homes already own a digital television and it looks like highdefinition, or HDTVs, have the potential to match that by the end of the year,” says Chris Ely, the CEA’s market research senior analyst. “With the transition to digital television coming on February 17, 2009, lower prices and an increased awareness of the benefits of high definition, many consumers are deciding to upgrade their televisions.”
The CEA expects consumers to buy more than 28 million digital TV sets this year. LCD TV sales in the U.S. are projected to grow 33% to 24 million units this year. Like so many other CE products, TV manufacturers hope innovative designs will help them gain market share. “Design is the next frontier,” says Michael Gay, vice president of marketing at Philips Consumer Electronics North America.
With mobile devices getting most of the attention, home networking may be the next battleground for CE marketers. Today, most people’s homes are a hodgepodge of electronics and appliances that work on their own. The CEA and others believe now is the time to make the transition by networking pretty much everything in a house that runs on electricity. Entertainment, communications, and security are obvious candidates.
Most market forecasters agree that the home is ripe for connecting everything, opening new market opportunities for CE and other sectors. The big trick for vendors (and one that may set them apart and count heavily toward their success or failure) will be ease of use—overcoming the complexities of installing and using networked home electronics.
Parks Associates, which has studied this market closely, believes the number of U.S. households with a connected entertainment network will reach 30 million by 2010. That’s a network comprising either a PC connected to at least one CE device or multiple interconnected CE devices, such as a whole-house DVR system.
In-Stat says more than 10 million U.S. homes already have at least one active Voice over Internet Protocol (VoIP) user. According to In-Stat, “client-based” VoIP providers like Yahoo! and AOL are benefiting from the growth of cable.
MORE THAN JUST A CAR One of the best opportunities for the electronics industry going forward is the automobile. In-vehicle navigation and entertainment, obstacle detection, integrated wireless communications (with Internet connectivity), smart safety systems, and more sophisticated vehicle operation sensing devices are just the beginning. Several market analysts—and some auto manufacturers—predict that by 2010, more than 30% of the value of automobiles will be in their electronics.
“If the automobile was invented today,” said Rick Wagoner, chairman and CEO of General Motors in a keynote address at the International Consumer Electronics Show in Las Vegas in January, “it would have debuted at CES. Because more and more, that’s exactly what today’s cars and trucks are—highly sophisticated consumer electronics.”
Sales of in-vehicle CE products, including OEM devices in new vehicles, will grow at a rate of 13% in 2008 to more than $12.8 billion, according to the CEA. But the biggest opportunity for marketers may be in non-installed products. A CEA study found that 38% of drivers intend to purchase and install an in-vehicle CE product over the next year.
Topping their list are remote vehicle starters (15%), in-dash navigation systems (13%), and car alarms (12%). Satellite radio, HD radio, and DVD players also show up strong in the study. What’s behind the self-installed auto market?
“Consumers want the flexibility to take their CE devices in and out of the car. They also want to be able to switch out devices easily as technology shifts and advances,” says Steve Koenig, CEA industry analysis senior manager.
TAKING THE MARKET’S PULSE Medical electronics is another significant if still evolving market. Consumer electronics companies are already exploiting the growing demand for remote—and that usually means wireless—and increasingly portable medical devices and services (Fig. 2). At the same time, several chip manufacturers, including Analog Devices, Intel, STMicroelectronics, and Texas Instruments, have formed vertical business units to respond to the demands of this burgeoning market.
In 2006, several industry and medical device and healthcare companies formed the Continua Health Alliance to devise interoperability standards for digital medical devices and to promote ways the government and insurance companies might pay for care enabled by technology.
The Bluetooth Special Interest Group, which is part of the Continua group, formed the Medical Devices Working Group to create and ratify a Bluetooth Medical Device Profile. Its goal is to expand Bluetooth’s use in medical applications, such as bloodpressure meters, weight scales, pulse oximeters, glucose monitors, pulse monitors, and thermometers.
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