2019 Trends to Watch: Consumer Technology Super-Themes - The glimpses of a new tech era - Informa
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
2019 Trends to Watch: Consumer Technology Super-Themes The glimpses of a new tech era Publication Date: 26 Sep 2018 | Product code: CES004-000046 Ronan de Renesse
2019 Trends to Watch: Consumer Technology Super-Themes
Summary
Catalyst
2019 will be a pivotal year for consumer technology with the launch of the first 5G smartphones,
advanced computational image capture, and resulting new vision-based AI consumer applications.
The impact will be felt across the entire TMT value chain for the next decade and will fundamentally
change the way people access and interact with content. This report depicts four trends that will
shape the year to come.
Ovum view
2018 has been a year of reckoning for consumer technology. The growth and hype that surrounded
the consumer IoT in 2017 have died down and pushed the industry to refocus on core features that
consumers perceive as valuable. There couldn't be a better time for the launch of the next generation
of wireless technology: 5G. Operators will have commercially deployed 5G in at least 18 countries by
the end of 2019. With less than a handful of devices and patchy network coverage at best, 5G will not
disrupt the market for some time but 2019 will offer the first glimpses of what it can do and what use
cases most resonate with consumers. AI will continue to be at the forefront of technology
developments and investment, especially around computational imagery which will enable humans
and machines to better understand and analyze what they see.
Key messages
5G will refocus attention on smartphones. The smartphone market is in desperate need of
innovation that will drive a new replacement cycle and 5G is the perfect candidate, but this
kind of innovation only happens once in a decade.
Vision AI will be at the forefront of innovation. Vision AI will be fueled by the emergence of
five-camera smartphones, camera-enabled smart speakers, video doorbells, and indoor
home-security cameras. The ability to detect a user's distinct features will help to personalize
services and provide safeguards.
Huawei will become the largest tech firm after Samsung. Given that its smartphone
shipments overtook those of Apple in 2Q18, it is time for the Chinese tech giant to scale up its
global operations and go after Samsung. The US and smart home are areas that Huawei will
need to address in 2019.
More voice-capable homes will emerge in 2019. There is a growing trend where smart
speaker capabilities are brought to other electronic devices around the home. 2019 will also
be the year where we will see several voice devices and experiments from Amazon and
Google.
© Ovum. All rights reserved. Unauthorized reproduction prohibited. Page 22019 Trends to Watch: Consumer Technology Super-Themes
Recommendations
Recommendations for service providers and platforms
Go big on AR. AR is the perfect fit for 5G and new smartphone camera capabilities. It will
require a lot of data and computational power which will consequently drive ARPUs and
ASPs. Partner to develop and promote new AR applications that demonstrate the need for
5G, but resist being tempted by gimmicks.
Retail and promote 5G smartphones. 5G smartphones will stand out but may not sell.
Capitalize on consumers' curiosity to get them back into operator stores, then promote gigabit
LTE as an alternative, along with an iPhone XS or a Galaxy S10.
Enable a secure vision AI environment. As vision AI (i.e. image recognition) gets more
widely used, it will generate significant privacy and security concerns. Service providers and
platform owners need to address those concerns early on and should use this as a
competitive advantage.
Recommendations for content providers
Design content for voice. It does not need to be complex; simple voice commands
accessible through an Alexa Skill or Google Action will be sufficient to address this growing
market.
Develop 3D volumetric content for AR. Games will generate the vast majority of direct app
revenues for AR, but it will also be used in many other types of applications as a way to
improve the experience. Use tool kits developed by Apple and Google to copy and paste the
real world and make it available to your audience.
Partner with device vendors and operators for 5G media bundles. Enhanced mobile
media will be a key use case for 5G and operators will be looking for premium media
experiences to bundle into 5G contracts. This will be an opportunity to add new subscriptions
and raise awareness of your services via operators' marketing campaigns.
Recommendations for technology vendors
Add vision to your product strategy. Capitalize on investment and interest in vision AI by
making your technology and/or devices vision AI capable. Partner with developers and
content publishers/owners to create powerful new use cases for vision AI.
Develop for 5G in a timely manner. Many different versions of 5G will be deployed at
different times in different geographies. It is very important for vendors to track those
deployments closely and bring 5G-related products to market at the perfect time.
Target media companies. 5G and voice/vision AI will change the way people access and
consume media. Help media companies navigate through this new technology landscape by
providing advice and management services on top of your products.
© Ovum. All rights reserved. Unauthorized reproduction prohibited. Page 32019 Trends to Watch: Consumer Technology Super-Themes Back to the future: 5G will refocus attention on smartphones Consumer IoT growth is falling The tech industry is starting to run out of objects to "smartify." Unit sales and revenues for wearables, VR, and smart home have missed expectations in 2018. Nokia is selling wearable company Withings back to its founder, HTC laid off 22% of its employees in July, and Snap disclosed $40m on unsold Spectacles at the end of 2017. Smart speakers are the exception to the rule with adoption in the US up to more than 20% in 2Q18, up from 6% the previous year. The Consumer IoT market is not dying but rather awaiting new technology to unlock it. This is particularly true for virtual, mixed, and AR headsets, where current hardware capabilities are insufficient to provide the experience that consumers expect. Smartphone markers such as Samsung, Apple, and Huawei are also major players in the consumer IoT market. In 2019, their focus and attention will be on 5G and how it will help differentiate flagship smartphones in a crowded high-end market, rather than on bringing new consumer IoT products to market. Figure 1: Consumer IoT growth rates will slow across all categories Source: Ovum Forecaster First 5G smartphones will launch at CES Operators will have commercially deployed 5G in at least 18 countries by the end of 2019. Enhanced mobile broadband will be among the first use cases to be deployed, accompanied by 5G devices such as hotspots and routers. The first 5G handsets will reach consumers' hands in 2019, with the first models to be announced at CES 2019 in January. The impact will be minimal in terms of volume and revenues in 2019 – we expect 5G handset sales to just reach 400,000 units in 2019 globally. Nevertheless, large marketing budgets from operators and manufacturers, combined with extensive press coverage of new service launches, will help raise consumer awareness. The 5G message that will then be pushed out to consumers is very important as it will plant the seed for future growth. The smartphone market is in desperate need of innovation that will drive a new replacement cycle and 5G is the perfect candidate, but this kind of innovation only happens once in a decade. © Ovum. All rights reserved. Unauthorized reproduction prohibited. Page 4
2019 Trends to Watch: Consumer Technology Super-Themes 2018 AI was audio, 2019 AI will be visual Five-camera smartphones for better AR The latest flagship premium models already feature four cameras for depth-sensing, dynamic range, and wide-angle shots. Samsung and LG are expected to bring an additional camera lens to their smartphones in 2019 and bring the camera count to five. The primary goal for this, as with previous generations, is to bring smartphone picture quality closer to DSLR. But it also brings with it a higher "data" resolution for images which will help image recognition accuracy for AI and AR applications. Mobile AR (i.e. smartphone-based AR) is set to unlock many revenue opportunities for media companies, telcos, and tech vendors, but there is an immediate need to improve the quality of experience before consumers buy in. Real-time image recognition will create new video use cases There are many other applications of vision AI besides AR. A key development already underway is visual searchand the use of visual AI to help people and machines better understand what they are looking at and take actions based on that information. Facial recognition is already being used to authenticate user identities and payment transactions on smartphones. We expect this to become more widespread in 2019. Vision AI will be fueled by the emergence of camera-enabled smart speakers, video doorbells, and indoor home security cameras. The ability to detect a user's distinct features can also help to personalize services and provide safeguards, for example recognizing a child and only providing him or her with access to certain programs or services. An AI overlay on cameras used in smart home security monitoring systems could expand and deepen the sophistication of services in this domain. Honeywell and Canary in the US added facial recognition features to their smart home security system which enables face detection notifications. Figure 2: AI will find new use cases as vision-capable devices expand Source: Ovum Forecaster © Ovum. All rights reserved. Unauthorized reproduction prohibited. Page 5
2019 Trends to Watch: Consumer Technology Super-Themes Huawei will go after Samsung Huawei in second place for smartphones Huawei was met with a lot of skepticism when it predicted at MWC 2016 that it would overtake Apple in three years and Samsung in five. With its smartphone shipments having overtaken Apple in 2Q18, it's now time for the Chinese tech giant to scale up its global operations and go after Samsung. Huawei's consumer business has gained a lot of maturity in the last couple of years and has been able to lead smartphone innovation on many levels, such as camera technology and AI chipsets. The fact that Huawei has managed to sell over 150 million smartphones in 2017 with little to no presence in the US is impressive. It will be very hard for Huawei to beat Samsung without a US presence, and that doesn't look promising in the current political context. Smart home is also a major gap in Huawei's consumer product line outside of China, which it will need to address – it recently launched AI Cube, a 4G-capable Alexa-enabled smart speaker. Figure 3: Huawei's path to success Source: Ovum and financial reports from Apple, Huawei, and Samsung 2019 will see a new star in Samsung's Galaxy Samsung's Galaxy device sales are stalling as the company struggles through flat smartphone innovation cycles. Two major smartphone releases are expected from Samsung in 2019: Galaxy S10 and Galaxy F, a foldable smartphone. The timing couldn't be more perfect as they will complement new 5G network launches, which mobile operators will be keen to get devices for. A $2,000 very large foldable 5G smartphone could play well for Samsung's brand image, but it won't make an impact on sales until a few years later once both new set of technologies mature. The S10 however will have a much wider impact in 2019. © Ovum. All rights reserved. Unauthorized reproduction prohibited. Page 6
2019 Trends to Watch: Consumer Technology Super-Themes 2019 will see more voice-capable homes Smart speakers are the tip of the iceberg According to Ovum’s Digital Consumer Insights surveys, the penetration of voice-capable TVs in the US has more than doubled between 2Q17 and 2Q18, increasing from 6% to 14%. While this is inferior to the growth experienced by smart speakers over the same period, the addressable market is much larger with more than half of respondents owning a connected TV. 2019 will see a growing trend where smart speaker capabilities will be brought to other electronic devices around the home, such as kitchen appliances, alarm clocks, or even a toilet (e.g. Kohler Connect). Interestingly, this is being pushed by Amazon and Google, despite potentially cannibalizing sales of their own-branded speakers. The key challenge for device makers, and to some extent skills developers, is to understand and manage the quality of voice recognition, especially from a hardware module perspective. Every vendor must consider a physical interface to fall back on when the voice command fails. Figure 4: TV devices present the largest untapped opportunity for voice AI capabilities Source: Ovum’s Digital Consumer Insights Voice device ads to emerge Paid search ads or sponsored product ads on Amazon Alexa and Google Assistant have been rumored throughout 2018. This will certainly come at some point in the future and 2019 will be the year where we will see several experiments from Amazon and Google. One more indirect approach where voice search is monetized is the use of displays on which the assistant is embedded. For instance, a voice search done on a smartphone will show results on the device’s display. Google Smart Displays and Amazon Echo Show are home assistant devices which feature a display and will be the perfect platform to start experimenting with voice-initiated display ads. Another device which may offer some interesting opportunities for voice device ads are voice-capable TVs, media streamers, and set-top boxes. © Ovum. All rights reserved. Unauthorized reproduction prohibited. Page 7
2019 Trends to Watch: Consumer Technology Super-Themes Appendix Methodology This report uses data from Ovum's Consumer Technology devices forecasts and Ovum's Digital Consumer Insights: Smart Living 2018 survey. This survey sampled 5,000 consumers in 2Q18 across five markets: China, France, Germany, the UK, and the US. The survey was conducted online and respondents had to have access to at least a smartphone device in order to take part. Further reading Digital Consumer Insights 2018: Consumer Devices – Forthcoming 5G: Regional and Global Approaches to a Technology Step Change, GLB007-000092 (July 2018) "The push for voice AI is gaining momentum across the TV value chain," CES004-000040 (July 2018) "Looking at the future through the eyes of machines," CES004-000034 (June 2018) Smart Home Devices Forecast Report: 2017–22, CES004-000025 (April 2018) Mobile Augmented Reality Forecast Report, 2017–22, CES004-000022 (March 2018) Consumer IoT Forecast: 2016–21, TE0004-001175 (June 2017) Author Ronan de Renesse, Practice Leader, Consumer Technology and Media & Entertainment ronan.derenesse@ovum.com Ovum Consulting We hope that this analysis will help you make informed and imaginative business decisions. If you have further requirements, Ovum’s consulting team may be able to help you. For more information about Ovum’s consulting capabilities, please contact us directly at consulting@ovum.com. Copyright notice and disclaimer The contents of this product are protected by international copyright laws, database rights and other intellectual property rights. The owner of these rights is Informa Telecoms and Media Limited, our affiliates or other third party licensors. All product and company names and logos contained within or appearing on this product are the trademarks, service marks or trading names of their respective owners, including Informa Telecoms and Media Limited. This product may not be copied, reproduced, distributed or transmitted in any form or by any means without the prior permission of Informa Telecoms and Media Limited. Whilst reasonable efforts have been made to ensure that the information and content of this product was correct as at the date of first publication, neither Informa Telecoms and Media Limited nor any person engaged or employed by Informa Telecoms and Media Limited accepts any liability for any errors, omissions or other inaccuracies. Readers should independently verify any facts and figures as no liability can be accepted in this regard – readers assume full responsibility and risk accordingly for their use of such information and content. © Ovum. All rights reserved. Unauthorized reproduction prohibited. Page 8
2019 Trends to Watch: Consumer Technology Super-Themes Any views and/or opinions expressed in this product by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/or opinions of Informa Telecoms and Media Limited. © Ovum. All rights reserved. Unauthorized reproduction prohibited. Page 9
CONTACT US ovum.informa.com askananalyst@ovum.com INTERNATIONAL OFFICES Beijing Dubai Hong Kong Hyderabad Johannesburg London Melbourne New York San Francisco Sao Paulo Tokyo
You can also read
