According to the global report from Accenture these industry issues, most notably concerns about data security with the IoT, are stymieing the consumer electronics industry and will continue to do so over the next year.
The poll of 28,000 consumers across 28 countries, including Australia, found that for nearly half (47%) of the respondents, security concerns and privacy risks ranked among the top three barriers to buying an IoT device and service – with IoT devices including smartwatches, wearable fitness monitors, and smart home thermostats, among others.
In Australia, of the respondents who indicated they either own or plan to buy an IoT device this year, nearly three-quarters (61%) said they know that these products are capable of being hacked and can result in stolen data or device malfunctions.
Within the groups of IoT device owners or those planning to buy one in the next year, more than one-third (34%) decided to be more cautious when using these devices and services, 27% chose to postpone buying an IoT device or subscribing to an IoT service, and 16% quit using their IoT devices or terminated their IoT services until they can get safer guarantees.
The survey also highlights sluggish demand for traditional consumer technology devices - for example, less than half (38%) of Australian respondents said they intend to buy a smartphone this year.
Consistent with this, the Accenture report reveals that the number of people who said they plan to buy a new TV or a tablet PC this year is also declining with only 25% and 23% planned purchases respectively.
Sami Luukkonen, global managing director for Accenture’s Electronics and High Tech group said “The slowdown in the consumer technology market is irrefutable, serious and global.”
“The market is not about the glitzy gadgets anymore—rather, it’s about providing secure, innovative and practical digital services and more open collaboration. As device demand tapers off, the industry needs to make a sharp turn toward providing innovative, value-added services that consumers are able to use with confidence.”
The survey also reveals lackluster demand for IoT device markets, which Accenture says the industry has been counting on to drive growth as other device markets such as smartphones mature.
Only 8% of respondents, for example, said they plan to purchase a smartwatch in the next year, and the survey found similar stagnation in demand for a range of devices, including fitness monitors (13%) and wearable health devices (9%).
Smart home plugs and connected home-surveillance cameras also declined with each only cited as a planned purchase by 6% of respondents.
According to Luukkonen, smartwatch sales have been particularly challenging for manufacturers and retailers because the products are failing to meet consumers’ battery-life, ease-of-use, and design expectations.
“Despite all its promise, the Internet of Things market has revealed itself to be a double-edged sword,” Luukkonen said.
“The market opportunity is enormous, but security and ease-of-use concerns are hindering its near- and long-term potential. To ignite this market, consumer technology companies should consider getting serious about ecosystems, sharing data, and creating integrated services across multiple companies, such as building a connected home through an integrated home security camera, thermostat, and door lock.
“Furthermore, these companies need to consider investing more in innovative services and make consumers’ online lives more secure, convenient and enriching,” Luukkonen added. “Until the promise of IoT meets consumers’ expectations, the IoT market will remain more promise than profit and do little to reinvigorate the overall digital consumer market.”
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