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What We Know About Apple’s New Product Announcements Thanks to CEA Market Research


Shawn DuBravac, Ph.D., Staff Economist, Consumer Technology Association


Last week the tech world was on the edge of its seat as Apple announced a slew of new product introductions. The Consumer Electronics Association (CEA)’s market research provides valuable context and foresight into these emerging categories and product announcements.
 
Digital Payment Transactions / Apple Pay
 
Last week Apple announced its entry into mobile payments. Approaches to digital payment systems have been growing over the last few years, but it has really been in just the past 12-18 months that we’ve seen digital transactions really start to enter the physical shopping environment. Prior to this, digital payment approaches were primarily used for payment on digital platforms. In other words, we used digital payment systems to buy things online and physical credit cards or cash to buy things in the analog world.
 
We are now starting to see digital payments influence what we do in the physical world. We no longer select banks based upon where we live or feel the need to carry cash at all times. We have moved to using Venmo, Square Cash or Paypal to split bills at a restaurant or we can digitally share the cost of an Uber ride with friends.
 
There is lots of experimentation taking place right now to see what resonates with consumers and businesses. With their announcement, Apple enters the fray as they try to develop and create a seamless experience for the consumer. Yet, a seamless experience isn't just ease-of-use; it also includes security, privacy and availability. While it may be easy to use a system, if isn’t widely available then it is not seamless experience for the consumer.
 
Use and deployment of mobile payment systems are in their infancy. I expect dramatic increases in both over the next 12-24 months.
 
Smartwatch / Apple Watch
 
After months of speculation, Apple finally revealed the Apple Watch. CEA expects the smartwatch category to thrive as Apple’s entrance increases consumer awareness and helps solidify  wearable tech . According to CEA’s U.S. Consumer Electronics Sales and Forecast, sales of smartwatches are projected to grow exponentially, selling 44 million units globally by 2016, contributing over $10 billion in revenue.
 
The health and fitness features of the Apple Watch, as well as the reveal of HomeKit earlier this summer, are consistent with our research that there is a strong consumer appetite for devices and services providing health and fitness solutions.
 
In fact, according to CEA’s Understanding the Market for Wearable Health and Fitness Devices the most important features to potential smartwatch buyers were fitness-focused, including 1) health monitoring (91 percent), 2) peak performance monitoring (90 percent) and 3) providing workout routines (82 percent).
 
Smartphones / iPhone 6 and 6 Plus
 
CEA’s research finds the smartphone is now in more than 64 percent of households. These devices are no longer solely focused on telephony services – they have become the hubs to our digital lifestyles.
 
Smartphones have become the largest revenue contributor of the consumer tech sector. Although revenue growth has slowed as the category has matured, it remains a robust segment and unit sales continue to show annual advances. According to CEA’s U.S. Consumer Electronics Sales and Forecast semi-annual industry report, smartphone unit shipments are projected to reach 163.5 million in 2014, up 8 percent from the 151 million units sold in 2013. Additionally, smartphone revenues are expected to generate $46 billion in 2014, a 7 percent increase from $43 billion in 2013.
 
According to CEA’s 16th Annual CE Ownership and Market Potential Study:
  • Ownership of smartphones now surpasses basic cell phones. Two-thirds of U.S. households now own smartphones, while ownership of basic cell phones declined from 60 percent to 51 percent during the same time period.
  • The second top planned CE purchase for 2014 are smartphones (27 percent), only following headphones.
  • Of non-owners of smartphones, 10 percent plan to purchase within the next year.
 
What’s your take? Connect with Shawn on Twitter @Twoopinions.
 

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