Hot Items for the Holidays: Large Phones, Notebooks and Smart TVs

Given that it’s just before back-to-school season, it may seem a bit odd to mention year-end holidays, but throughout the offices, halls and cubicles of all our favorite vendors, the holiday product and marketing plans have been underway for some time. These companies not only know what products they’ll have in place by then, they’re already in the process of making manufacturing forecasts in order to meet the needs of eager shoppers.

Having just completed a worldwide survey of just over 2,500 consumers regarding their consumer device usage and upcoming purchase plans (some data for which was recently referenced in an article on tablets in the Wall Street Journal), I believe I have a pretty good idea of what’s going to be hot in the critical Q4 buying season. Of course, the column title kind of gives it away, but to be clear, this will be the fall and winter for large (5”+ screen size) smartphones. I also predict we’ll see a reasonable rebound for consumer-focused notebook PCs, and a resurgent interest in internet-connected smart TVs.

The survey was fielded in July of this year by my research firm, TECHnalysis Research, and consisted of 1,021 online respondents from the US, 545 from the UK, 501 from Brazil and 507 from China. Each respondent was required to own and regularly use either a PC, tablet or smartphone (I wrote about some of the US-only device usage results in my “Digital Generation Gap” column a few weeks back). Respondents ranged in age from 18-75+, with roughly 40% in the 18-34 range; 40% in the 35-54 range and 20% in the 55+ group.

Most of the survey fo cused on current devices and activities they perform with those devices , but there was one question that specifically asked what devices they planned to purchase over the next 12 months. The list of choices people could select from were:

  • Notebook PC
  • Desktop PC
  • All-in-one desktop PC (e.g., iMac)
  • 2-in-1 notebook/tablet device (e.g., Lenovo Yoga, Microsoft Surface, etc.)
  • Tablet with 8” screen or smaller
  • Tablet with screen larger than 8”
  • Smartphone with screen less than 5”
  • Smartphone with screen 5” or larger
  • Flat panel TV 32” or larger
  • Smart TV (with internet connection) of any size
  • Wearable device, like a smart watch or fitness band
  • None of the above

Of course, people’s intentions to buy are almost always a fair bit higher than what their actual purchases turn out to be, so you can’t take the responses at direct face value. However, you can make relative comparisons between the results to see what products people are actively considering.

As the chart below shows, the clear winner across the worldwide sampling, as well as in most individual countries, was the larger smartphone category. Pent up demand for the forthcoming iPhone 6 is likely a partial explanation for the results, but I don’t believe Apple will be the only winner here. In general, there’s a broad-based interest for these devices and I expect we will very strong results in this category from a number of different vendors.

Device-Purchase-Plans-By-Country

©2014, TECHnalysis Research

What some people might find surprising is the strong showing for notebooks, especially in developing markets. In fact, in Brazil, expectations for notebook purchases outshone every other category—and by a good margin—and notebooks were also the most popular choice (by a small margin) for Chinese consumers. Even in more mature markets like the US and UK, the consumer notebook category ranked high. In the US, notebooks slightly edged out smart TVs as the third most popular choice and in the UK, notebooks where fourth. Clearly, consumers still show strong interest in notebooks and with the increasing acceptance of Windows 8/8.1 and the decreasing prices of touch-based notebooks, the market for these devices should see a much needed rebound this holiday season.

Interestingly, smart TVs were the third most popular choice overall and were second in the UK and exactly tied for second in Brazil. Though many had written off this category years ago, it appears consumers are just starting to come around to the concept and these devices could offer a very pleasant surprise to those vendors who can put together a compelling offering.

Looking at other categories, tablets did not fare as well, but the larger 8”+ products were fifth overall versus a ninth (out of 11) ranking for smaller tablets. Given the very strong showing for larger smartphones this may not be surprising, but it powerfully demonstrates some of the challenges that the tablet market will be facing over the next year or so. Wearables ranked even worse, at 10th, as most consumers are still struggling to understand the value of these new devices.

The data also showed notable differences by country with clearly different priorities depending on where in the world you live. In the US, for example, “non-smart” flat panel TVs 32” or larger were actually the number two choice, while in the UK, smartphones with smaller screens (under 5”) were the number three choice. Conversely, in China, those smaller screen smartphones were the last place choice, while larger tablets came in third.

No crystal ball can be perfect, of course, but there are increasing signs that the smartphone is about to go through a size revolution, the PC market is set to rebound, the tablet market will continue to struggle, and smart TVs could finally come to life. It’s going to be fun to watch….

 

Published by

Bob O'Donnell

Bob O’Donnell is the president and chief analyst of TECHnalysis Research, LLC a technology consulting and market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. You can follow him on Twitter @bobodtech.

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