Consumer Interest In Connected CE Devices Leveling Off

Consumer interest in connected electronics is leveling off, and while it may not yet be time to hit the panic button, manufacturers would be wise to figure out what they can do to maintain the public’s interest. 

According to research from Parks Associates, U.S. broadband households have an average of 8.1 connected electronic devices in their homes. While this represents a 76% growth in average volume since 2010, in recent years the increase has flattened. 

“It’s not that the news is bad, it’s that it’s flat,” Tricia Parks, the firm’s founder and CEO, tells Marketing Daily. “We have more stuff in our average homes, but there appears to be a lull. Manufacturers need to do something to wake that lull up.”

The long-term trend, meanwhile, has also shown purchase rates are declining (from 87% in 2008 to 74% in 2016), in part due to lower buying patters for items like connected game consoles, Blu-ray players and DVRs. Those declines — along with tepid demand for Ultra-HD TVs — indicate how the ways consumers get their content are affecting the sector overall, Parks says. 



“There certainly is an underlying structural issue here,” she says. 

Consumers are also tending to hold on to older electronic devices longer, which affects the purchase cycle, Parks says. A decade into the smartphone era, the number of things a consumer expects or needs their device to do has plateaued. “It appears things are drawing out in terms of replacement rates,” she says. “The timespan it takes to replace a smartphone has increased. Whatever it is consumers have now is down enough for them.”

The biggest bright spot in the connected electronics landscape is connected home assistants, such as Amazon’s Echo and Dot. Those products earn the highest “Net Promoter Scores," and could point to a way forward for device manufacturers and marketers, Parks says. 

“The closest thing we've seen to an exciting product is the Amazon Dot and Echo,” she says. “Voice control is the current battle.”

While many manufacturers are aligning with Alexa for voice control and features, they may also want to integrate with Google Home, Apple HomePod or create their own systems, Parks says. 

“The interesting question is ‘When does the tail wag the dog?’” Parks says. “If people become enamored of voice control, does that make an Amazon if you don't have it, you lose?... Do you come up with your own voice? And if you do, will it be openly compatible [with other devices]?”

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