The three key technology areas that will offer
the best opportunity for vendors during the next three years include: wireless
broadband, which will enable constant connectivity; location-based services
(LBS), which will personalize and take advantage of the constant connected
state; and operating systems (OS), which are the foundation for integration
applications that can bring it all together, according to Gartner.
According to Gartner, in 2010, consumers globally spent
$2 trillion on digital information and entertainment products and services, and
this will increase to $2.8 trillion by 2015, according to Gartner.
Worldwide consumer spending on digital information and
entertainment products and services is projected to reach $2.1 trillion in
There are two basic strategies that vendors
have used to capture consumer spending that will enable their interconnected
consumer experience. The first is to concentrate in one consumer spending
segment, and the second is to diversify into other consumer spending segments.
The challenge to vendors choosing to be
hyperfocused on one wallet spending segment is the relentless pursuit of
innovation required to maintain segment sales leadership in this one specific
segment. There are two ways to achieve leadership in this instance: by
diversifying the portfolio suite of offerings and by expanding the target
audience or usage model of the products and services.
Vendors choosing to diversify into other
consumer spending segments can benefit from the fact that consumers are
increasingly using alternative services that will move their spending from one
segment to the other, such as fixed voice to mobile voice; fixed broadband to
mobile broadband; physical content, such as CDs, DVDs and books to
online/digital versions; and linear broadcast TV to over the top (OTT) video.
All of these alternative services provide
business opportunities that would replace or would be in addition to legacy
products and services, thus enabling a vendor to pursue the consumers’ spending
in more than one segment.
The trend among vendors to offer a diversified portfolio
of products and/or services puts them in a better position to seize a larger
share of the consumer wallet. Gartner defines
consumer wallet spending as the money spent by consumers for digital technology
devices and services that are for accessing, consuming and creating content.
This wallet is divided into three basic spending types — content, devices and
“While a vendor can be a leader in
specializing within just one segment of the consumer wallet, there are a
mounting number of examples that suggest diversification may be the optimal
path forward in the consumer electronics industry,” said Amanda Sabia,
principal research analyst at Gartner.
“Vendors that diversify their offerings
across multiple consumer spending segments earn revenue across the full
ecosystem and take legacy services to transform to newer products and services,” Sabia added.
Of the $2 trillion consumers spent globally
in 2010 on digital information and entertainment products and
services, the largest spending segment (62 percent) was for communications
subscription-based access and usage services.
The $1.2 trillion included mobile and wired voice
services; mobile data services, such as SMS/TXT and broadband; fixed broadband
services; video services, such as subscriptions to pay TV; and online gaming.
The second-largest spending segment (28
percent) was for devices. The $600 billion is made up of consumer electronic
devices, such as mobile/handheld devices, PCs and related devices, and
stationary entertainment equipment, such as television sets and game consoles.
The smallest spending segment (10 percent)
was for content and software for a total of $200 billion. Video content that
has been purchased/rented/streamed/downloaded, as well as premium channel/pay
per view (PPV)/video on demand (VOD), and that portion of pay TV subscriptions
allocated to licensing fees made up half of this segment, while the other half
was for PC and gaming software, digital music and books, and purchases from
mobile apps stores.
By TelecomLead.com Team