Smartphones and tablets are killing other devices

Have you bought a camera or GPS unit recently? Probably not

By Jim Harris
February 27, 2012

Tablet PCs and smartphone sales are growing exponentially year over year and, as they incorporate more and better functionality into their core operations, other consumer electronic categories are in decline. The Apple iPad exploded on the scene in 2010, selling 15 million units. Sales grew 222 per cent in 2011, to 56.5 million units (estimate). iPad sales are expected to grow 59 per cent in 2012 and will likely break 100 million units, according to Steve Bambridge of GfK, a boutique research firm working with the Consumer Electronics Association.

This success prompted competitors to launch more than 100 tablets at the Consumer Electronics Show (CES) in 2011; another 50 were launched at CES in 2012.

Mobile phones are enjoying a similar, albeit less stellar, trajectory. Sales worldwide in 2010 were 1.31 billion, and smartphones were 20 per cent of that. In 2011, mobile phone sales jumped to 1.5 billion and smartphone share increased to 29 per cent. In 2012, the mobile market is forecast to grow to 1.68 billion, with smartphones taking 36 per cent, according to GfK.

This success is hitting other consumer electronic devices. The estimates are that sales of plain mobiles will drop nine per cent in 2011. Other market share drops for 2011 include: car navigation, seven per cent; camcorders, eight per cent; and video game consoles, four per cent. Digital still camera sales are actually up (one per cent) but removing digital SLRs shows the category is in decline.

Why is this happening? Because tablets and smartphones are including the functionality of these standalone devices. A smartphone with a 16 megapixel camera was announced at CES this year, so why buy a standalone camera? Smartphones can take full-motion video, some in HD, which explains the decline of camcorders and perhaps even Cisco’s abrupt end to the Flip.

Traditional TV collapses

The staple of family rooms for years is even being hit. In a stunning report, Accenture found that “the percentage of consumers watching broadcast or cable TV shows, movies or videos on TV in a typical week plummeted from 71 per cent in 2009 to 48 per cent in 2011.”

What are consumers doing instead? The answer: watching TV, movies and streaming content on tablets, smartphones and PCs. So while lots of CES floorspace was devoted to bigger and better sets, many consumers won’t care.

In the developing world

I spoke recently at a CIO conference in Kuala Lumpur at the invitation of the Government of Malaysia. The topic was the value of embracing open-source software. Victor Lim, vice-president of IDC Asia Pacific, predicted that by 2015 every mobile sold in mature Asian markets would be a smartphone. He pointed out that sub-$100 smartphones are already selling in Asia, and that is the unsubsidized street price.

And with developing markets driving sales of low-priced smartphones, the cost North American consumers pay should also drop. This is because we will look overseas and start expecting to pay less.

This trend tells a compelling story about Research In Motion. I have the new Bold 9900. It’s a wonderful phone and I’m really enjoying it, but the developing world is driving demand. Because that demand is concentrating on sub-$275 models and especially in $100 models, RIM will have to broaden its offering of low-priced models to thrive in the future.

One of RIM’s international advantages is that the iPhone is a pig for bandwidth. Its launch forced North American carriers to spends billions upgrading their networks. For developing nations, with far lower revenue per user, telcos won’t be able to meet the bandwidth demand that would be created by the mass adoption of the iPhone. That means advantage BlackBerry. 


Jim Harris
Jim Harris is the author of Blindsided, a #1 international bestseller published in 80 countries worldwide. He speaks at 40 conferences a year around the world. He consults with companies and government on change, leadership and sustainability and speaks at 40 conferences a year around the world. You can follow him on twitter @JimHarris or reach him through LinkedIn.com. His web site is www.jimharris.com.

Also watch:
Jim Harris on Tech Innovations at Backbone's 10th Anniversary - April 2011

Also read:
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Everyone has smartphone and tablets aren't far behind
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