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Home  > Consumer Products  >  Consumer Products & Retail  >  Electronics

Converging Technical Lifestyles - UK


Published Date: October 2007
Published By: Mintel International Group Ltd.
Page Count: 123
Order Code: R560-2935
 
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Issues in the Market
Main issues
Definition
Abbreviations


Market in Brief
Convergence field wide open…
…but the race will be a long one…
…with broadband the engine for all success
Barriers to take-up led by cost, complexity and quality…
…with lack of back-up yet to raise its head
Convergence or connection?
Digital divide shifting from age to affluence
Convergence bundled through the back door
PCs may stay in the background
TV leads through position, not power
Games consoles underachieving
Smart choices in the mobile sector


Insights and Opportunities
Compatibility, not competition
Give remotes the simple touch
Consoles need to hit the ‘new game’ button
Don’t forget the home phone


Internal Market Environment
Key points
Access to technology
Figure 1: Availability of digital communications services, 2005 and 2006
Britons spoiled for platform choice
Take-up of technology
Figure 2: Computer, Internet and broadband take-up, 2002-06
Mobile gets head start in convergence stakes…
…but broadband set to put TV and PC back in the race
Satellite v Freeview
Barriers to use
Risk of online traffic jams
Figure 3: Estimated bandwidth requirements, by application
Complexity of use
The consumption environment
Limited (battery) life-expectancy
Technology issues
Broadband connection speeds
Internet capacity
Spectrum access
Next-generation Networks
Wi-Fi and WiMAX
Faster speeds, even wider coverage
Service bundling
Regulation and legislation
Unbundling leads to bundling
Broadening the spectrum for convergence
Fights over rights?
Price and competition
Usage caps


Broader Market Environment
Key points
Demographic trends
Bridging the digital divide
Figure 4: Trends in the age structure of the UK population, by gender, 2002-12
Approaching a third aged 55+
DTT an important technology for convergence among older groups
Converging upmarket
Figure 5: Forecast adult population trends, by socio-economic group, 2002-12
Convergence flies the nest…
Figure 6: Forecast adult population trends, by lifestage, 2002-12
…but smaller homes require fewer devices
Figure 7: UK households and one-person households, 2002-12
Economic climate
Consumers have cash to spend on converged devices
Figure 8: Trends in personal disposable income and consumer expenditure, 2002-12
Lack of interest
Consumer mobility


Strengths and Weaknesses in the Market
Strengths
A connected country
Development of wireless technologies
Service bundling
Growing technological awareness
Strong consumer electronics market
Weaknesses
Vulnerability to technical failure
Consumer caution
Concerns over performance and complexity
Digital divides
Digital rights management
PCs/the Internet
Strengths
Weaknesses
Interactive television
Strengths
Weaknesses
Games consoles
Strengths
Weaknesses
Mobile phones
Strengths
Weaknesses


Case Studies
IPTV: Joost
Track record and funding create a potential pace-setter
Open access by year-end
Demographic targeting of adverts
A window on the TV world?
Interactive television: Sky Active
A video magazine
An alternative model of convergence - revenue convergence
Games console: Xbox 360
Connected hub or converged device?
Re-inventing the walled garden
Xbox versus Apple TV?
Mobile phone: Nokia N95
First sighting of GPS
Web browsing and email
Sound on vision…
…but mobile’s memory and life limits remain issues to resolve


PCs and the Internet
Key points
The recent past
OK computer - consumers get with the program
Figure 9: Computer, Internet and broadband take-up, 2002-06
Internet age created the possibility of convergence…
…but broadband made it reality
Escape from the bedroom
Figure 10: Market size and forecast of the laptop market, by volume, 2001-11
The present
Download trends add video to audio
Challenging the console: episode one
Changing focus: from distribution to communication
The future
Broadband access to widen further...
…and sit at the heart of convergence - on all devices
Challenging the console: episode two
Where next: Centre stage or behind the scenes?
PCs and the Internet: the consumer
Figure 11: PC ownership, June 2007
No substitute for Internet access
Consumers dislike being chained to their desk(top)
Activities done through PCs
Figure 12: Activities done through PC in the last 12 months, June 2007
Not all Internet users are early adopters
Some functions fit together better than others
Future convergence: a two-way street?
Figure 13: Activities done through PC in the last 12 months, by PC ownership, June 2007
Laptops lead in convergence stakes
Activities done through PCs by demographic analysis
Figure 14: Activities done through PC in the last 12 months, by gender, age, region, socio-economic group, daily and Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage and mobile provider, June 2007
PCs not doin’ it for the kids
Do women want divergence, not convergence?
Broadsheet brands
Older children hold their parents’ hands


Interactive TV
Key points
The recent past
Rise of the red button
Figure 15: Digital television penetration, October-December 2006
Penetration driven by choice, not necessity
Freeview growth shows price is still an issue
New sets for new services
The present
iTV reaching those on the wrong side of the digital divide
Some services more interactive than others
iTV convergence centres on the living room
Figure 16: UK television reception, by platform, October-December 2006
The future
Increased interactivity for DTT
Putting the TV in IPTV
Converge or die?
Interactive TV: the consumer
Figure 17: TV reception at home, June 2007
Strong links between Internet and multichannel TV…
…and particularly cable
Interactive activities done through the TV
Figure 18: Interactive activities done through TV in the last 12 months, June 2007
TV-based interactivity more ‘passive’ than ‘active’
New services gaining popularity
Interactive activities by TV reception
Figure 19: Interactive activities done through TV in the last 12 months, by TV reception at home, June 2007
Cable viewers look most receptive to online convergence
Most popular interactive activities through TV by demographic analysis
Figure 20: Most popular interactive activities done through TV in the last 12 months, by gender, age, region, socio-economic group, daily and Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage and mobile provider, June 2007
Next most popular interactive activities through TV by demographic analysis
Figure 21: Next most popular interactive activities done through TV in the last 12 months, by gender, age, region, socio-economic group, daily and Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage and mobile provider, June 2007
iTV can bring convergence to women…
…but not so much to the young


Games Consoles
Key points
The recent past
Expanding the field of play
Consoles wield convergence clout
The present
Convergence now
Unfulfilled potential
Figure 22: Interactive activities done through games console, September 2006
Price as important as capabilities
The future
More walled gardens?
Static games consoles: the consumer
Figure 23: Games console ownership and purchasing intentions, June 2007
Focus on pure gamers obscures convergence potential
Can Wii fix it? Maybe Wii can
Premature ageing a problem for the sector
Most important static console features
Figure 24: Most important static console features, by platform, June 2007
Little convergence interest among the current console crowd…
…but newcomers are even less convergence-aware
Handheld games consoles: the consumer
Figure 25: Handheld games console ownership, June 2007
Handhelds more popular than statics
More positive picture for PSP
Super Mario Brothers to the rescue?
Handheld console features
Figure 26: Most important handheld console features, by platform, June 2007
Music, video and gaming already converged - and popular
PSP for individuals, DS for communities?
Mobile Phones
Key points
The recent past
Market reaches saturation point
UK goes 3G
Operators cannot hold for call revenues
Figure 27: UK mobile phone market, 2005 and 2006
Demand for data gathering pace
Figure 28: UK mobile phone revenue segmentation, 2001-05
The present
Internet goes mobile…
…as does TV…
…but relevance and cost remain barriers to growth
The future
Falling prices to boost data traffic
3G or not 3G?
Convergence between the phone and PDA?
Mobile phones: the consumer
Figure 29: Activities done through mobile phone, June 2006
Main functions widely used…
…but mobile users concerned about cost…
…and security
Most popular activities done through mobile phones
Figure 30: Most popular activities done through mobile phone, by gender, age, socio-economic group, region, daily and Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage and mobile provider, June 2006
Next most popular activities done through mobile phones
Figure 31: Next most popular activities done through mobile phone, by gender, age, socio-economic group, region, daily and Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage and mobile provider, June 2006
Two types of mobile convergence - business and pleasure
Mobile convergence available to all…
…and on all networks


The Consumer: Enthusiasm for New Technology
Key points
Type of technology buyer
Figure 32: Type of technology buyer, June 2007
Convergence set to be a slow sell
Type of technology buyer by demographic analysis
Figure 33: Type of technology buyer, by gender, age, region, socio-economic group, daily and Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage and mobile provider, June 2007
Early adopters: young, male, affluent
Replacers: older, female and skint
Type of technology buyer by technology ownership
Figure 34: Technology ownership, by type of technology buyer, June 2007
Satellite today, Freeview tomorrow
Early Adopters stand back in static console market
Smart money on the smartphone
Type of technology buyer by interactive activities done on TV
Figure 35: Interactive activities done through TV in the last 12 months, by type of technology buyer, June 2007
Type of technology buyer by activities done through TV
Figure 36: Activities done through PC in the last 12 months, by type of technology buyer, June 2007
Type of technology buyer by activities done through mobile phones
Figure 37: Activities done through mobile phone, by type of technology buyer, June 2006


The Consumer: In-home Convergence
Key points
Attitudes towards in-home technology
Figure 38: Attitudes towards in-home technology, June 2007
Benefits of convergence already understood
Biggest barrier to take-up is not an insurmountable one…
…although consumer jury is still out on IPTV quality
Targeting opportunities
PC/Online Convergers
Console Convergers
Frustrateds
Non-Convergers
Target groups by demographic analysis
Figure 39: In-home technology target groups, by gender, age, socio-economic group, region, daily and Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage and mobile provider, June 2007
PC man is gadget fan
Consoles strong on value
Young not immune to frustrations of technology
Non-Convergers older and mid-market
Attitudes towards in-home technology by type of technology buyer
Figure 40: Attitudes towards in-home technology, by type of technology buyer, June 2007
Early adopters set convergence pace…
…with the Cautious and Replacers still waiting for results


The Consumer: Mobile Convergence
Key points
Attitudes towards portable technology
Figure 41: Attitudes towards portable technology, June 2007
Significant resistance towards mobile convergence…
…with technical issues to the fore
A solid core are pro-convergence…
…but non-core functions do not determine purchasing patterns
Targeting opportunities
Convergers
Frustrateds
Non-Convergers
Portable technology target groups by demographic analysis
Figure 42: Portable technology target groups, by gender, age, socio-economic group, region, daily and Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage and mobile provider, June 2007
Affordability drives mobility
Frustrated by static standards
Non-Convergers worth pursuing
Attitudes towards portable technology by type of technology buyer
Figure 43: Attitudes towards portable technology, by type of technology buyer, June 2007


Forecast of Consumer Demand for Converging Technologies
Figure 44: Share of technology buyers, 2007
Figure 45: Convergence in-home and/or mobile within buyers’ profiles, 2007
Nearly 100,000 ready for converging products in 2008
Figure 46: Forecast of purchasers of converging technology, 2007

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