What's Below The Surface Of The Device Revolution?

The device era is hitting its stride. While PDAs have plateaued a bit at 12 million US households, 45 million households own DVD players and another 21 million own digital cameras. Over the next five years, 22 million US households will own game consoles, 33 million will own an HDTV set, and 39 million be using personal video recorders (PVRs).

What does all of this device madness mean? Here's my take.

1. Single-function devices will dominate. Convergence is a buzzword we've heard for a decade. But divergence, not convergence, is where device design is headed. Consumers don't want everything everywhere. They don't want mobile commerce or email on their car radios. Devices that do a few things well -- like the BlackBerry, Apple iPod MP3 player, Microsoft SPOT watch, and portable video players (PVPs) -- will succeed.

2. Experience and usability will drive adoption. Our Consumer Technographics® research reveals that consumers' choice of device brand is driven by three factors: in-store comparisons, recommendations by friends or family, and past experience with a brand (see figure below). For CE manufacturers, this means that a great device experience -- smart product design and intuitive interfaces -- will be paramount. For retailers, it means that the quality of in-store help and customer service -- like that offered by Amazon.com and Circuit City -- will have a great impact on sales.

3. Storage capacity and portability are vital. Advances in storage technology mean that the growth of storage capacity is outpacing improvements in processing power and bandwidth. The upshot? Devices like PVRs and MP3 players that take advantage of storage on the edge of the network will outsell products whose value proposition rests on processing power or bandwidth.

4. Benefits trump technology. A technology succeeds at the moment when the benefit becomes more visible than the technology. For a digital camera, the benefits appear at clear trigger points -- having a new baby, buying a home, or selling an item on eBay. Contrast this with the PVR or satellite radio, where an inability to identify product benefit has hurt adoption. In the case of PVRs, 32% of consumers who have heard of a PVR don't know what the product does.

Look for our home networking and media site design reports in the coming weeks. Have a great month!


Chris Charron
Devices, Media, And Marketing Group Director

P.S. On June 18th, here in Cambridge, Mass., Forrester will host an Email Marketing Boot Camp. This is great for anyone at your company working to improve email effectiveness. This one-day session will provide hands-on training in name acquisition, list segmentation and targeting, campaign design and creative, testing, and understanding spam filters. Attendees will also get the chance to solicit feedback on specific campaigns, as well as get a customized email profile of their target customers using Forrester's Technographics Data. To register, contact Andrew Stockwell at Astockwell@forrester.com.

P.P.S. I'd love to hear from you -- about our research, challenges you face, research you'd like us to write, or data points you are looking for. Drop me a line anytime at chrischarron@forrester.com.

Research Referenced In This Issue If you printed this email, get links to the research featured in this week's issue by going to www.forrester.com/go and entering the five-digit number of the report you'd like to read. Apple Breaks The Digital Music Logjam (16769) Benchmark May 2002 Data Overview: Covers Digital Decade Forecasts, Device Ownership, Security, And Wireless (14521)    Buyer's Guide To Database Marketing Service Providers (16632) CES 2003: Single-Function Devices -- At Last (16259) Connectivity Splits The Gaming Industry (16071)    Devices & Access April 2003 Data Overview: Covers Electronics, ISPs, Home Networks, Imaging, Peripherals, And Security (16074) Devices & Access September 2002 Data Overview: Covers TV, Wireless, Gaming, ISPs, And Communication (14537) Downloads Save The Music Business (14854)    Madonna's MP3 Single: Masterful Self-Promotion (16715) Maximizing The Last Mile (14563) Mobile Applications That Drive Revenue (15068) Online Gamblers: A Good Bet For Marketers (16745) Tech Support: People Who Need People (16764) Unlocking Profits From Digital Television (15550) Will Ad-Skipping Kill Television? (15459)

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