Winners and Losers in Consumer Tech This Holiday Season

One of the things we like to do every year about this time is asking consumers in the US what technology products are on their list this holiday season. In a broad consumer survey, we conduct we explore purchase intent for smartphones, TVs, PCs and tablets, and wearables/smartwatches. Outside of those core categories we also ask questions around smart speakers, virtual reality, game consoles, and connected/smart home. A full analysis of this research is available to our clients, but I want to share a few insights on a few key areas where we see big changes in this years survey over last years.

While consumer purchase intent may not guarantee those planning to purchase the product they indicated follow through, it is still helpful to understand what consumers are planning to buy as of right now. In a follow-up study we do in the new year, we find out what consumers did buy, along with what they changed their mind on and why.

The Almighty Smartphone

Smartphone flat-ish YoY, Apple still commanding the lions share of purchase intent. Consistent with our fall smartphone survey, the iPhone X is a significant reason driving purchase intent and having three current generation iPhones with iPhone X, iPhone 8 Plus, and iPhone 8, has increased Apple’s overall share of iPhone purchase mix with these three devices commanding 73% of the purchase intent of all iPhone upgraders planning to buy an iPhone before the end of the year.

The last standout observation around smartphones is one where this category differs significantly from all the others we track. Smartphone purchases are the least influenced by Black Friday, Cyber Monday, and Christmas/New Years sales or promotions. This shows us how un-commoditized the smartphone market remains compared to other categories which are much more price sensitive and more highly influenced by deals and promotions.

An OLED Holiday

Overall TV purchase intent is down slightly YoY in our survey. There has been speculation that the rising price of products like smartphones and other core computing devices could impact holiday sales of other categories. This could be a reason, but it could also be that consumers still don’t see the need to upgrade to OLED or 4k yet at this point in time.

Of all the brands we tracked, Samsung, LG, and Sony have the highest intent. Sony is up in interest with the second highest brand of purchase intent, and LG TVs fell to third place. A noteworthy brand that has been gaining steam is TCL. It appears TCL is gaining share on Vizio as they sell sized TVs and specifications to Vizio often at several hundred dollars less. Their strategic deal with Roku also helps with consumer perception since they may not have heard of TCL but have heard of Roku. Partnering gives the appeal that TCL is a solid brand since Roku trusts them enough to do a deal with them.

Consumer interest Intent to buy OLED is up 400% YoY and more consumers looking to strengthen the overall trend of buying a bigger TV than the one they currently have. Bigger TVs, Smart TV, 4k TV, and OLED were the key technology motivations driving TV purchase intent this holiday season.

Fitness Trackers and Smart Watches

There were some noticeable changes to the fitness tracker and smartwatch category. Not only has purchase intent for the category jumped 22% YoY in our survey, but the market is also shifting toward Apple’s favor.

The last few years, Fitbit has remained a strong competitor regarding purchase intention share among consumers. In last years survey, we observed Fitbit had 20% of the market intent, Samsung had 13%, and Apple Watch 22% with 31% of consumers still researching to decide on which product is right for them.

This year’s survey revealed Apple Watch models have 44% of the intention to buy share of the wearable category. Fitbit products were up slightly YoY to 22% of the categories purchase intent, and Samsung was down to below 10%. One big change was this year only 14% of consumers intending to buy a fitness tracker or smartwatch were still doing research. Suggesting consumers are more educated about the category and what they are looking for this year over last year.

No doubt, the increased portfolio of the Apple Watch lineup is helping Apple in this category as the more robust lineup is helping them take share against competitors as consumers have a range of options, and price points, to choose from.

Tablets Replacing Notebooks a Key Observation

Looking at the PC and Tablet category YoY, our survey indicates interest in buying a new PC or tablet may be weaker this year than the holiday 2016 cycle. However, a few big changes occurred around specific brands.

The single biggest standout metric was around Apple’s 12.9” iPad Pro. Intent to purchase the largest iPad Pro model jumped 60% YoY. Along those lines, Microsoft Surface also jumped in purchase intention with the Surface Pro 5 jumping 40% YoY over the Surface Pro 4 from last year’s study. When we explored some of the reasons why consumers were leaning toward these two products, it is clear the YoY increase is because consumers realize these devices are capable enough to replace their PCs and like the more tablet form factor over traditional notebook clamshells.

Another standout observation with the PC/Tablet category is average selling prices are likely to rise. Last year 62% of consumers were looking to spend $500 or less on their PC or tablet purchase during the holiday period. This year only 41% of consumers are looking to spend $500 or less and 59% looking to spend more than $500.

Smart Speakers Still Hot

Black Friday deals for smart speakers continued to keep the category hot. From checks with retailers, it was clear that Amazon Echo devices and Google Home Mini all flew off retailers shelves at prices between $29-$70. While deals on these products added fuel to overall heat of the category, our survey revealed higher purchase intent overall for smart speakers even before these Black Friday deals took place.

Intent to buy a smart speaker product with an integrated voice assistant jumped 114% in our survey YoY. While this category is benefitting from a larger assortment of options, it still seems the basic smart speaker offerings are still the most popular. More consumers intended to buy a basic Amazon Echo, Echo Dot, or Google Home Mini, than the more sophisticated smart speakers including a screen or higher quality audio features.

This dynamic suggests a few dynamics around this category. Firstly, many consumers are still getting their first smart speaker and starting with an entry level product makes the most sense, and has less risk, as they figure out what they like and where these products add value. The lower priced smart speaker products will likely serve as the gateway for consumers to start adding more capable ones once they figure out how it fits into their home life. Second, for those consumers who already have one or more smart speakers, these low-priced deals make an attractive way for them to add more smart speakers to other rooms of their house. Lastly, it could also suggest the category is becoming commoditized. There could be some truth to this point, but we will need another year or two to see where the average selling price settles. That said, I do think the ASP is going to settle at a price that is much lower than what others may believe.

Those are a few of the key takeaways we observed in this year’s survey versus last years. It will be interesting to compare these observations with our follow up survey seeing if consumers purchased what they planned or if things changed along the way.