Accenture ConsTechWP v05 Online

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Mobility Takes Center Stage:

The 2010 Accenture ConsumerElectronics Products and

Services Usage Report


2/242 | Mobility Takes Center Stage

Executive Summary

About the Research

Strong Global Demand Drives IncreasedSpending on and Use of Consumer forTechnology Products and Services

Emerging Markets Are the Engine forConsumer Technology Adoption

US Consumers Continue Their Adoption ofMobility and Social Networking Technology

Generational Differences Remain StrongInfluencers of Consumer Technology Purchases

Implications for the ConsumerTechnology Industry

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Contents



It may seem counterintuitive, but despite the deepest and most far-reaching economicdownturn of the past 50 years, there has never been greater demand for consumertechnology products. According to the Consumer Electronics Association, worldwide

spending on consumer electronics products will grow nearly 10 percent between 2008 and2009 to $700 billionan increase of $42 billion, driven largely by skyrocketing demand inemerging markets.

Indeed, consumer technologies remain an important and growing part of not only manycountries economies, but also the lives of an increasing number of people all around theworldas the recently completed 2010 edition of the Accenture Consumer ElectronicsProducts and Usage study vividly illustrates. This field work for this study, formerlyconducted only in the United States in 2007 and 2008, was expanded in 2009 to include

16,000 consumers in eight countries in order to develop a greater understanding ofconsumer preferences and buying behavior for various technology products and services onan international scale.

Our research confirmed that despite the recent global recession, consumers worldwideandespecially those in emerging marketsremain keenly interested in and willing to invest in amultitude of technology products and services.

Executive Summary

3 | Mobility Takes Center Stage



respondents use technologies. Witha greater desire for all different kindsof technology, emerging-marketrespondents take full advantage ofthe activities available on any onetechnology. The net result is that thebreadth of technology use appears to bemuch greater in emerging markets.

Emerging and mature markets arefurther distinguished by their hungerfor innovation. Innovation is more oftena primary driver of purchase decisionsamong emerging-market consumers,and 94 percent of respondents inemerging markets (compared with82 percent of respondents in maturemarkets) said it was important to themthat the brands they buy are perceivedas the most innovative of technologies.Still, price is not an insignificantconcern. It remains the top factor in thepurchase decision among consumers inboth groups, although it less likely to beseen as important by emerging-marketconsumers.

One of the most surprising findingsof our research involves sustainability.Consumers in emerging markets werefar more likely than their mature-market counterparts to say they wouldpay a premium for products thatare environmentally friendly. In fact,virtually all98 percentof Chineseconsumers, compared with just 43percent of consumers in the UnitedStates, reported such willingness.

US consumers continuetheir adoption of mobilityand social networkingtechnologiesDespite the recession, US respondentsspent more money on consumerelectronics in the past year than inprior years. While computers andmobile phones held steady as beingowned by the greatest number of USrespondents, Web-enabled mobile phoneownership more than tripled in two

Global demand for andspending on consumerelectronics remains strongIn the past 12 months, 85 percent ofrespondents globally spent money onconsumer technologies, with most ofthat money going toward the two most

common (and, in consumers minds,most important) devices: mobile phones(both standard and smartphones) andcomputers (laptops and desktops). Whenmaking such technology purchases,price is considered the most importantfactor in the purchase decision, followedclosely by personal research.

While not a primary purchase decisioncriteria for most consumers, innovationis also extremely important. A full 88

percent of respondents said it wasvery or somewhat important thatthe electronics brands they own areperceived as the most innovativetechnologies. Surprisingly, despiteconsumers emphasis on price, amajority (67 percent) of consumersglobally said they were willing topay a premium for products that areenvironmentally friendlyindicating thatsustainability is rapidly becoming moreimportant to consumers worldwide.

Across the many technologiesconsumers could own, our surveyshowed three tiers of technologyadoption: technologies pervasivelyowned, those becoming more pervasiveand those still selectively used. Thevast majority of respondents own thebasics or must haves in technology:computer, mobile phone, digitalcamera, DVD player and regular TV.Approximately half of the respondents

own the next wave of must havesin technology: high-definition TVsand portable music players (MP3s).And, one-third or less of respondentsown more specialized-use or oldertechnologies: game console, VCR, digitalvideo camera, portable gaming device,DVR for TV and GPS device. Adoption of

the newest consumer technologies suchas netbooks, BluRay players, eBooks and3-D TVs remains low to date.

Our research also found thatconsumers tend to be more dissatisfiedwith technology services than thetechnologies themselves, yet bothreturns of products and drop and

switch rates for services remain low.

Emerging markets arethe engine for consumertechnology adoptionThis study revealed striking differencesin many aspects of the attitudestoward and behavior with consumertechnologies between consumers inemerging markets and those in mature

ones. At a high level, the former aremuch more likely to have spent moneyon consumer technology products in thepast year, to have spent more moneyon those products and to report theyengage in a broader range of activitieswith those products.

Emerging-market consumers areespecially interested in mobiletechnologiesfar more than theirmature-market counterparts. For

example, consumers in emergingmarkets are more likely to own mobiletechnologies (such as mobile phones,MP3 players, portable gaming systemsand netbooks), to buy such productsin the near future and to use all of theproducts functionality. They also aremore than twice as likely (64 percentversus 29 percent) to say their mobilephone or smartphone is their mostimportant technologyan honor thatgoes to the computer among mature-

market respondentsand to moreoften use mobile phone service thanhome Internet service (54 percentversus 22 percent).

The differences were also dramaticbetween emerging markets andmature ones in the activities in which



years. In fact, among the Baby Boomergeneration, Web-enabled mobile phoneownership grew 75 percent between2008 and 2009 in the United States.

Given the preceding statistics, it isperhaps not surprising that whileboth mobile phones and computersremain the most valued technologies

for US consumers, the former hassurpassed the latter in importance:when combined as a group, Web-enabled mobile phones and regularmobile phones are the most importantconsumer technology product for 47percent of US consumers (versus 36percent for computers). Home Internetaccess is the most important service toUS consumers but, reflecting the riseof mobile phones themselves, mobilephone service also has increased inimportance. Cable/satellite TV saw thegreatest decline in the percentage of USconsumers choosing it as one of theirmost important services.

Figure 1. Demographics of Survey Respondents

Gender

Education

Female49%

Male51%

4%Prefer not to answer

Doctorate

Graduate degree

College degree

Trade/technical school

High school diploma

Have not completed highschool

2%

14%

37%

12%

24%

7%

Generation Market of Residences

Mature

markets

50%

Emerging

markets

50%

BabyBoomer35%

Gen Y

41%

Gen X

24%

0 5 10 15 20 25 30 35 40

In addition, US consumer participationin technology-based activities increasedat a far greater rate in the past yearthan in prior years. For instance, thepercentage of US consumers in 2009spending at least 15 hours a weeksearching for news on the Internetdoubled from 2008. The percentageof consumers using social networkingsites almost doubled in the past yearamuch more dramatic rate of growththan in the prior year. In fact, use ofsocial networking sites among the USBaby Boomer generation grew 164percent in one yearfrom 22 percentusing social networking to 58 percentparticipating at least occasionally.

From multiple dimensionsacrossthe globe, by age and by geographicregionAccentures researchdemonstrates significant interest in,and adoption of, consumer technologiesamong consumers globally. But italso highlights the often dramaticdifferences in behavior and desires

among different population segments.For companies focused on providingconsumer technology products andservices, the results of this study canprovide crucial insights into consumertechnology usage behavior withincritical market segments that can helpthem more effectively target theirofferings, capitalize on growth potentialin key markets and position themselvesfor high performance in the post-recession world.



trends based on current behavior

and potentially identify trends

emerging from behavioral changes

in the use of technology.

A summary of this extensive research

is presented in the following report.

It begins with key findings from

the overall global sample of 16,000

consumers. It then describes the

differences the research identified

between mature and emerging

markets in consumer use of and

preferences for technology. It

concludes by presenting the major

trends identified in the United Statesduring the past three years.

In 2007 and 2008, Accenture's

Electronics & High Tech industry

practice conducted primary research

among United States consumers on

the purchase and usage patterns

of various types of consumer

technology devices and services. In

2009, to provide even greater insight

into consumer purchasing patterns

and behavior with technology, we

expanded our research to include

16,000 consumers across a total of

eight countries:

China

France Germany

India

Japan

Malaysia

Singapore

United States

The research featured an online

survey administered to a sample

of 2,000 adults in each country

balanced across basic demographic

factors, including geographic

regions within countries, age and

gender (Figure 1).

The primary objectives for the

research were to develop a

greater awareness of preferences

for consumer technologies and

services and to analyze trends in

US consumer preferences over the

past three years. The intention was

to better understand the purchaseand use of consumer technologies

among key generations and, for

the first time this year, gain deeper

insights into global differences.

Lastly, the research was intended

to help project future technology

About the Research

Accenture | 6



And, one-third or less of respondentsown specialized-use or oldertechnologies: game console, VCR, digitalvideo camera, portable gaming device,DVR for TV and GPS device (Figure 3).

Far fewer respondents own the newestconsumer technologies such as anetbook, BluRay player, eBook or 3-D

TV. Early adopters of these newesttechnologies reside more frequentlyin China, Malaysia and Singapore. Forinstance, 26 percent of respondentsin China and 23 percent in Singaporeown a netbook, compared with only10 percent of consumers in the UnitedStates and 6 percent in France. Similarly,17 percent of Chinese respondents ownan eBooka far greater percentage thantheir counterparts in the United States(5 percent), Germany (2 percent) andFrance (1 percent).

While most respondents own mobilephones, many owners use them forbasic activities. More than one-quarter(28 percent) of respondents use their

Strong Global DemandDrives Increased Spendingon and Use of ConsumerTechnology Products andServicesOur survey respondents across the globe

are reasonably technology literate, with92 percent owning computers and 90percent owning mobile phones. In fact,of the 18 technology-related activitieswe asked consumers about, the majorityof respondents (60 percent or more)said they occasionally engaged in 12of them. Virtually everyone at leastoccasionally emails from a computer (95percent), reads news on the Internet (94percent) and watches TV on a regular TV(87 percent). Furthermore, a subset of

respondents spend significant time withtechnology each week. Almost one-quarter (22 percent) spend at least 15hours a week watching TV, 14 percentspend at least 15 hours a week emailingfrom a PC, 12 percent spend more than

15 hours a week reading news on theInternet and working from home, and 8percent spend at least 15 hours a weekconnecting on social networking sites(Figure 2).

Across the many technologiesconsumers could own, our surveyshowed three tiers of technology

adoption: technologies pervasivelyowned, those becoming more pervasive,and those still selectively used. Thevast majority of respondents own thebasics or must haves in technology:computer, mobile phone, digital photocamera, DVD player and regular TV(although DVD players and regularTVs are on the decline according tothe three-year trends in the UnitedStates). In fact, computers and mobilephones are by far the most importantand frequently used technologies.Approximately half of the respondentsown the next wave of must haves intechnology: high-definition TVs andportable music players (MP3 players).

Despite the global recession, 85

percent of consumers globally spentmoney on consumer technology

products in the past year.

While just under half (49 percent)

of consumers bought a mobile or

smartphone in the past year, basic

activities such as making calls and

texting still dominate as the primary

uses of mobile phones.

Consumers are relying less on

the advice of friends, family and

in-store salespeople for help with

their purchase decisions. Instead,

they value third-party reviews and

online boards.

A strong majority67 percent

of consumers said they would paya premium for technology products

that are marked as environmentally

friendly.

Eighty-eight percent of consumers

said it was very or somewhat

important that the technology

brands they own are perceived as

the most innovative technologies.

Consumers tend to be more

dissatisfied with technology

services than the technologies

themselves, yet both products and

services experience very low return

percentages among consumers

participating in our research.

Research Highlights

7 | Mobility Takes Center Stage



Figure 2. Participation in Technology-Based Activities

Microblogging

Watching videos on a mobile phone or other mobile device

Writing blogs or contributing to online references such as Wikipedia

Playing video games on the go (on handheld game device or phone)

Emailing from a mobile device

Participating in communities of interest on the Internet

Reading blogs or listening to podcasts

Watching TV shows/movies on the internetListening to music on an iPod or other portable music player

Playing video games at home (on console or PC)

Connecting with people on social networking sitesWatching/posting videos on the Internet

Listening to music online

Managing personal digital photos and videos on the Internet

Working from home

Watching TV on TV

Searching for/reading news and information on the Internet

Emailing from a PC

Percentage of Respondents at Least Occasionally Participating in the Activity

0 20 40 60 80 100

47%

60%

63%

63%

63%

65%

67%

68%

69%

78%

87%

94%

95%

24%

35%

39%

42%

47%

Figure 3. Consumer Technologies Owned by Respondents

3-D television

eBook

BluRay playerNetbook

GPS device

Digital video recorder for TV

Portable gaming device

Digital video camera

VCR

Game console

Portable music player

High-definition plasma or LCD TV

Regular (CRT or tube) TV

DVD player

Digital photo camera

Web-enabled mobile phone/smartphone

Mobile Phone

Computer (desktop or laptop)

Percentage of Respondents Owning the Device

0 20 40 60 80 100

21%

27%

29%

34%

34%

44%

47%

61%

73%

77%

29%

85%

92%

2%

5%

7%

14%

20%



Figure 4. Top Phone Applications Used by Respondents

Other

Tweeting

Updating and checking on my social networking sites

Watching videos

Shooting videos

Services based on my location

Playing games

I just use my phone to make phone calls

Listening to music

Browsing on the Web

Taking photos

Checking email

Texting/text messaging

Percentage of Respondents Ranking Application in the Top 3

Most Valuable Applications

11%

14%

28%

29%

34%

45%

47%

65%

3%

2%

5%

8%

8%

0 10 20 30 40 50 60 70

mobile phone only to make phonecalls. Other popular uses for mobile orsmartphones include text messaging,checking email and taking pictures.

Tweeting and checking social networksites were considered top phoneapplications infrequently, with just 2percent and 5 percent, respectively,ranking them as a top-three application.Shooting or watching video was alsolow (8 percent ranked it as a top-threephone application), with the majorityof respondents (44 percent) saying theydont do it because they prefer to shootor watch video on a computer (Figure 4).With handset design making it far easier

now to do activities such as updatingFacebook, one may assume that growthcould increase substantially in phone usefor such things as social networking andtweeting in the near future.

The importance of price, innovationand sustainability

Despite the global recession, 85 percentof global respondents spent moneyon consumer technologies in the pastyearmostly on mobile or smartphones(49 percent), followed by computers(30 percent), high-definition TVs (23percent) and digital photo cameras (22percent). Spending in the past 12 monthshas been relatively evenly split betweenthose spending under $500, thosespending between $500 and $1,499and those spending $1,500 or more(Figure 5). Looking forward, respondents

spending plans in the post-recessionenvironment roughly follow the samepriorities and patterns as this year.

Yet while consumers are spending ontechnology, they remain keenly aware ofthe cost of the products. In fact, price isthe most important factor in consumerspurchase decisions, especially in theUnited States, Japan, Singapore andMalaysia. Price is followed closely bypersonal research as a top decision-

Given the importanceof price as a purchase

decision criteria, itis surprising thatthe environmentalimpact of a productcan drive a premiumprice from manyconsumers.



Figure 5. Spending on Consumer

Technologies in the Past 12 Months

33%

29%

16%

11%

7%

4%

Less than $500

$500 to less than $1500


$3000 or more

Have not spent any money on consumerelectronics in the past year

Dont know

Figure 6. Factors Playing Biggest Role in Purchase Decision

Other

Product packaging

Advertisements

Manufacturers website

Media coverage

Innovative technologies

Recommendations of friends and others you trust

Consumer ratings/rankings

Personal research

Price

Percentage of Respondents Selecting Factor as

Playing the Biggest Role in Purchase Decision

10%

11%

13%

26%

30%

1%

1%

2%

2%

2%

0 5 10 15 20 25 30 35

making factor overall. Both of thesefactors outweigh other criteria, such asrecommendations of friends, consumerratings or innovative technologies.

(An exception is in China, wherepersonal research, recommendationsand consumer ratings are moreinfluential in the purchase decisionthan price.) Marketing appears to havelittle influence on purchase behavior,as media coverage, advertisements,product packaging and manufacturerswebsites each were cited by 2 percentof consumers or less as a top decision-making factor (Figure 6).

Interestingly, though innovation waschosen as a top purchase decision-making factor by only 10 percent of theglobal survey respondents, 88 percent ofconsumers said it was very or somewhatimportant that the electronics brandsthey own are perceived as the mostinnovative technologies. Thus, innovationremains critical for consumer technologycompanies but may not justify a pricepremium in consumers minds.

On the other hand, a productsgreenness may command ahigher price. Indeed, 67 percent ofrespondents said they would pay a

premium for technology productsthat are marked as environmentallyfriendly. Given the importance of priceas a purchase decision criteria, it issurprising that the environmentalimpact of a product can drive apremium price from many consumers.

Dissatisfaction and returns

Consumers tend to be more dissatisfiedwith technology services than thetechnologies themselves, yet bothproducts and services experiencevery low return percentages amongconsumers participating in this research.Return rates for computers are triplethat of most other devices but are stillvery low at 6 percent. Mobile phonereturn rates are double other products (4percent), while all other devices have areturn rate of 2 percent (high-definitionTVs and digital photo cameras) or lower

(1 percent for all other devices). Dropand switch rates for technology servicesare also low: between 11 percent and 12percent for respondents most important

services (home Internet and mobilephone). This could reflect the realitythat in many markets, these serviceshave greatly improved in recent years,thus enabling providers to hold on to agreater proportion of subscribers.

The majority of computers and mobilephones (about two-thirds) werereturned because consumers felt theydid not work properly. About one-half of portable music players, digital

photo cameras and game consoleswere returned for this reason. Forother devices, reasons for return weremore evenly split among the devicenot working properly, the device notworking as consumers thought itshould, general dissatisfaction with theproduct or consumers finding somethingthey liked better (Figure 7).



Figure 7. Reasons for Returning Selected Consumer Electronics

Other

Decided it was too expensive

Decided I no longer wanted

the product

Changed my mind

Found comparable productI liked better

Didnt work like I had

hoped it would

General dissatisfaction

Didnt work properly

eBook

Netbook

Computer

Web-enabledmobile device

Mobile phone

0 10 20 30 40 50 60 70



There is clearly much greater

demand for consumer technologiesin general in emerging markets

than mature onesadoption,

spend and use are all higher in

emerging markets.

Mobile technology is especially

coveted by emerging-market

consumers.

Innovation and environmental

friendliness are more often major

drivers of purchase decisions

among consumers in emerging

markets than in mature ones.

Emerging-market respondents

are much more likely than their

mature-market counterparts to

take full advantage of the activities

available on any one technology.

Research Highlights

consumers also are more than twice aslikely (64 percent versus 29 percent) tosay their mobile phone or smartphone istheir most important technology.

Further demonstrating the high valueemerging markets place on beingmobile is their use of mobile services.While emerging markets equal

mature markets in their use of morelongstanding or traditional technologiessuch as computers, the former rank theimportance of home Internet connectionlower than mobile connections. Further-more, emerging markets more oftenuse mobile phone service than homeInternet service; in mature markets, thereverse is true: 54 percent of emerging-market respondents ranked mobile phoneservice as the service most frequentlyused (versus 22 percent of mature-market respondents), while 29 percentof emerging-market respondents rankedhome Internet as their most frequentlyused service (compared with 57 percentof mature-market respondents).

Emerging Markets Arethe Engine for ConsumerTechnology AdoptionTo gain further insights into consumerattitude and buying trends, Accentureanalyzed the differences betweenconsumer technology preferences and

behavior in mature markets and emergingmarkets. For the purpose of analysis,we grouped the United States, Japan,France and Germany together as maturemarkets, or those where technologyproducts and services have been availablefor many years and the economies arewell developed. We grouped India, China,Malaysia and Singapore together asemerging markets, in which technologyadoption and substantial economicdevelopment has been more recent. As

discussed in the following section, someof the differences between the twogroups are quite dramatic and clearlysupport the notion that the strongestmarkets today for consumer technologiesare emerging markets.

Mobility as a driver of technologyselection

Our survey results clearly show thereis much greater demand for mobiletechnology (such as mobile phones,MP3 players, portable gaming systemsand netbooks) among emerging-marketrespondents than those in mature

markets. Consumers in emergingmarkets more frequently own mobiletechnologies, are more likely to buythem in the near future and more oftenuse all of a products functionality. Forexample, Web-enabled mobile devicesare owned by 42 percent of emerging-market respondents but only 17 percentof mature-market respondents. In China,59 percent of respondents own Web-enabled mobile devices versus only 7percent of respondents in Japan. And,

netbooks are owned by 20 percent ofemerging-market respondents, (including26 percent of Chinese consumers) versus9 percent of mature-market respondentsincluding only 6 percent of Frenchconsumers (Figure 8). Emerging-market

Accenture | 12



Emerging markets

Mature markets

0 20 40 60 80 100

3-D television

eBook

BluRay player

Netbook

GPS device

Digital video recorderfor TV



VCR

Game console


High-definition plasmaor LCD TV


DVD player


Web-enabled mobilephone/smartphone

Mobile Phone

Computer (desktop orlaptop)

Figure 8. Consumer Technology Products Owned in Emerging Markets versus

Mature Markets



An explosion in demand

Consumers in emerging markets alsoinvest moreand more frequentlyintheir preferred technologies than themature-market respondents. Indeed, theformer were twice as likely to reporthaving bought a mobile or smartphonein the past year (67 percent versus 32

percent) and twice as likely to havesaid they purchased a computer in thepast 12 months (40 percent versus 20percent). And across all technologychoices, more respondents in emergingmarkets than mature ones expect to buynew technologies in the next 12 months(Figure 9).

Furthermore, emerging-marketconsumers spent more money thantheir mature-market counterparts in

the past year. Ninety-one percent ofemerging-market respondents spentmoney on technology last year, with 24percent spending less than $500 and 67percent more than $500. Spending wasthe highest in India, where 77 percentspent more than $500 per person,including 18 percent who spent morethan $3,000. Conversely, 78 percentof mature-market respondents spentmoney on technology last year, with33 percent spending less than $500

and 44 percent spending more than$500. Unlike consumers in India, just 6percent of those in the United States,France and Germany spent more than$3,000 on technology each in the pastyear. It is clear from these figures thatas countries such as China and Indiaexperience explosive middle-classgrowth, consumers are eager to spendtheir newly gained disposable incomeon consumer technologies (Figure 10).

Figure 9. Mature Versus Emerging Markets Recent and Planned Consumer

Technology Purchases

Emerging markets: plan

to purchase next year

3-D television

eBook

BluRay player

Netbook

GPS device

Digital video recorderfor TV



VCR

Game console


High-definition plasma

or LCD TV


DVD player


Web-enabled mobilephone/smartphone

Mobile Phone

Computer (desktop orlaptop)

Emerging markets:

purchased in last year

Mature markets: plan to

purchase next year

Mature markets:

purchased in last year

0.0 0.1 0.2 0.3 0.4 0.5 0.6



India

China

Malaysia

Singapore

Japan

Germany

France

United States

Emerging Markets

Mature Markets

0 10 20 30 40 50

Dont know

$3000 or more



Less than $500

Have not spent any money on consumerelectronics in the past year

Figure 10. Spending on Consumer Technologies in the Last Twelve Months (by Country)

Figure 11. Interest in Environmentally Friendly Technology Products

India

China

Malaysia

Singapore

Japan

Germany

France

United States

Emerging Markets

Mature Markets

Yes

No

0.0 0.2 0.4 0.6 0.8 1.0 1.2

Percentage of Respondents Willing to Pay a Premium for a Product Marked as Environmentally Friendly



The importance of innovation andsustainability

Innovation is more often a primary driverof purchase decisions among consumersin emerging markets than in matureones (15 percent of the former versus 6percent of the latter ranked innovationas a factor). In fact, 94 percent ofrespondents in emerging markets saidit was important to them that thebrands they buy are perceived as themost innovative technologies, comparedwith 82 percent of respondents inmature markets. Innovation is especiallyimportant in India, where it ranks

second only to personal research asthe top decision-making factor fortechnology purchase. Perhaps this drivefor innovative technologies explains whyconsumers in emerging markets appearless loyal to their technology, as they

report purchasing technologies morefrequently and spending more overall ontechnologies than those in other parts ofthe world.

One of the most surprising findingsof our research involves sustainability.Eighty-four percent of respondents inemerging markets said they would pay a

premium for a product marked as beingmore environmentally friendly. This is34 points higher than the percentage ofconsumers in mature markets who wouldaccept a higher price to go greener.At a specific country level, differencesin attitudes toward sustainabilitywere even more pronounced, withvirtually all98 percentof the Chineserespondents indicating they wouldpay a premium for products that wereenvironmentally friendly, comparedwith 84 percent in India, 42 percent inthe United States and Germany, and 49percent in Japan (Figure 11).

Taking full advantage of technologyfunctionality

The differences were also dramaticbetween emerging and mature marketsin the activities that respondentsengage in with technologies. In general,respondents in mature markets reported

far less innovative use of technologythan those in emerging markets.With a greater desire for all differentkinds of technology, emerging-marketrespondents take full advantage ofthe activities available on any onetechnology. The net result is the breadthof technology use is much greateramong emerging-market respondents.

More than 90 percent of respondentsin both markets at least occasionally

email from a PC, search for informationon the Internet and watch TV. But inmost other activities, there is a 15- to20-point difference in the percentagesreported by the two groups, with morerespondents in emerging markets than

Eighty-four percentof respondents inemerging marketssaid they would pay apremium for a product

marked as beingmore environmentallyfriendly.

mature markets at least occasionallyengaging in those activities. Forinstance, 78 percent of emerging-market respondents, versus only 58percent of those in mature markets, atleast occasionally listen to music online(Figure 12). And surprisingly, 40 percentof respondents in mature marketsreported they use their mobile phoneonly for making phone calls (versus 19percent in emerging markets).

As technology brings greaterconnectivity with the rest of the world,emerging-market respondents aretaking full advantage. These consumersare more often texting and more likelyto use technology in an interactiveway (such as blogging and texting).The differences are substantial inthe amount of time emerging-versusmature-market respondents spendreading and writing blogs, participatingin communities of interest and socialnetworks, and playing video games on amobile phone.

Consistent with their greater timespent using social networking sites,emerging-market respondents use moreof such sitesin some cases, at doubleor triple the rate of their mature-marketcounterparts. For instance, 14 percentof emerging-market respondents haveused Zorpia occasionally, versus 2percent of mature-market respondents.In some cases these findings may belargely driven by the fact that somesites are not truly global, but ratherare primarily regional or even country-focused. But even well-known globalbrands such as Facebook appear to havegreater popularity in emerging markets.Indeed, 69 percent of emerging-market

respondents have used Facebookoccasionally, compared with 38 percentof mature-market respondents.



Figure 12. Mature Versus Emerging Market Participation in Technology-Based Activities

Watching TV shows/movies on the internet

Emerging markets

Mature markets

Microblogging


Writing blogs or contributing to online references such as Wikipedia

Playing video games on the go (on handheld game device or phone)




Listening to music on an iPod or other portable music player


Connecting with people on social networking sites

Watching/posting videos on the Internet


Managing personal digital photos and videos on the Internet

Working from home

Watching TV on TV

Searching for/reading news and information on the Internet

Emailing from a PC

Percentage of Respondents Whom Have at Least Occasionally Participated

in the Activity

0.0 0.2 0.4 0.6 0.8 1.0 1.2



frequency in the past year includehigh-definition plasma or LCD TVs(Boomer ownership grew 41 percent inone year), portable music players andgame consoles. Products experiencinga decline in ownership include oldertechnologies such as DVD players,regular TVs and VCRs (Figure 14).

While both mobile phones andcomputers remain the most valuedtechnologies for US consumers, theformer has surpassed the latter inimportance: when combined as agroup, Web-enabled mobile phones andregular mobile phones are the mostimportant technologies to 47 percentof US consumers (versus 36 percent forcomputers). Home Internet access is themost important service to consumers,but, reflecting the rise of mobile phonesthemselves, mobile phone service also hasincreased in importance. Cable/satelliteTV saw the greatest decline in thepercentage of US consumers choosing itas their most important service.

US Consumers ContinueTheir Adoption of Mobilityand Social NetworkingTechnologyWith this 2009 survey, Accenture nowhas data on consumer technologyadoption, importance and usage among

US consumers spanning the past threeyears. While some of the research areashave changed to stay consistent withthe most contemporary issues andtechnologies, many have remained,which enables us to present some ofthe most interesting trends since ourresearch began in 2007.

Purchasing and spending despite theUS recession

Despite the impact of the globalrecessions, US consumers spent moremoney on consumer technologies inthe past year than in prior years. While11 percent of US respondents did notspend any money on electronics this

year (versus 12 percent and 13 percentin prior years), the percentage spendingless than $500 decreased by 14 points(from 43 percent a year ago to 29percent in the past 12 months) whilethe percentage spending $500 to morethan $3,000 increased from previousyears and the percentage spendingbetween $500 and $1500 grew from 27percent last year to 33 percent this year.At the highest end of the spectrum, thepercentage spending more than $1,500grew from 16 percent last year to 23percent this year (Figure 13).

While computers and mobile phonesheld steady as the technology owned bythe greatest majority of US respondents,Web-enabled mobile phone ownershiphas more than tripled in two years.In fact, among the Baby Boomergeneration, Web-enabled mobile phoneownership grew 75 percent in oneyear (from 8 percent owning one to 14percent owning one). Other productsgrowing significantly in ownership

US consumers spent more money

on consumer technologies in thepast year than in prior years, despite

the economic downturn.

Web-enabled mobile phone

ownership has more than tripled

in two years, largely driven by the

enthusiastic adoption by Baby

Boomers, and mobile phones

have replaced computers as

US consumers most important

technology.

Consumers in the United States

are doing more activities, and doing

them more frequently, with their

technologies than they did the

previous two years.

Social networks have become

a mainstay of US consumertechnology users, with the

percentage of all US consumers

using social networking sites almost

doubling in the past year.

Research Highlights

Accenture | 18



Our research also found that socialnetworks have become a mainstay ofUS consumer technology users. Thepercentage of all US consumers using

social networking sites almost doubledin the past year (from 43 percent to 75percent)a much more dramatic rate ofgrowth than in the prior year (when thepercentage of consumers using socialnetworking sites rose from 31 percentto 43 percent). Fully three quarters ofUS consumers are now users of socialInternet sites, with the most dramaticgrowth in usage occurring among theBaby Boomer generation. Use of socialnetworking sites among US Boomers

grew 164 percent in one year, from 22percent using social networking to 58percent participating. US consumerssaid they use such sites mostly toreconnect and stay in touch with oldfriends and to network for businesspurposes, and less to make new friends(Figure 16).

Exponentially expanding the use oftechnology applications

One of the biggest areas of changeduring the past three years is thebreadth of activities that US consumersare engaging in with their technologyproducts. Across most activities, thepercentage of US consumers at leastoccasionally doing the activity increased(in many cases dramatically) in the pastyear, with participation in activitiesincreasing at a far greater rate in 2009than in prior years. For instance, thepercentage of consumers spendingat least 15 hours a week searching

for news on the Internet doubledbetween 2008 and 2009. Furthermore,consumers have spent more time usinginnovative technologies at the expenseof older technologiesfor instance, thepercentage of consumers spending atleast 15 hours a week watching TV fellby almost 50 percent in the past year(Figure 15).

The percentage ofall US consumers

using socialnetworking sitesalmost doubled inthe past year.

Figure 13. Trends in US Spending on Consumer Technologies

Dont know

$3000 or more



Less than $500

Have not spent any money onconsumer electronics in the past year

2007

2008

2009

0 10 20 30 40 50

Percentage of Respondents Spending in Each Category Each Year



Our latest research contains many

findings that further support theperception that younger consumers

demonstrate greater technology

ownership and usage. We analyzed

our 16,000 respondents in three

generations: Gen Y (those 18 to

25 years of age), Gen X (those

between 25 and 34 years old) and

Baby Boomers (those between

35 and 62 years of age). Overall

differences in technology ownership

and use trended with age. Themost dramatic differences were

between Baby Boomers and Gen Y,

with Gen X seeming to fall in the

middle, across all areas queried.

This substantiates that how, and

how often, people use technology

is clearly evolving with each

generation.

Baby boomers are far from

technology illiterate, but also

not as technology savvy as their

younger counterparts. Boomers

have adopted specific technologies

and applications (such as

computers and emailing) quite

extensively; but there are many

technologies and applications

that few have purchased or used.

Younger respondents have bought

more and plan to buy more

technologies and services than

Gen X and Boomer generations.

While Gen Y consumers do buy

computers, these consumers

prefer mobile phones, portable

music players, game consoles,

and netbooksmirroring the

profiles of consumers in emerging

markets. And, 67 percent of Gen Y

respondents at least occasionally

use Facebook, by far the most

frequently used social networking

site. Conversely, only 39 percent ofBoomers use Facebook (although,

as noted elsewhere in this report,

Boomers use of Facebook is

growing dramatically).

Older respondents more often

returned products because they

believed they didnt work properly,

while younger ones found defects

but just as often returned products

because they found comparable

ones or were disappointed in

features or functions. As it is

unlikely that a product defect rate

would vary among generations

of users, one could speculate that

older people are more likely to

mistakenly believe a product isnt

working correctly when the actual

issue could be with consumer

usagenot setting up or using a

device correctly.

Age also plays a part in the top

challenges consumers have with

mobile phones. Beyond battery

life, which frustrates everyone,

older people have more trouble

with keyboard and screen size.

Younger people more often cite

problems with the touchscreen.

These are important considerations

for companies targeting new

technology products to theBoomer generation and suggest

opportunities to adapt product

design to attract and strengthen

loyalty among older customers.

Generational Differences RemainStrong Influencers of ConsumerElectronics Purchases



Figure 14. Trends in US Ownership of Consumer Technologies

Digital video recorder for TV



VCR

Game console


2007

2008

2009

Percentage of US Respondents Owning the Technology Product

0 20 40 60 80 100

High-definition plasma or LCD TV


DVD player


Web-enabled mobile phone/smartphone

Mobile Phone

Computer (desktop or laptop)



0 10 20 30 40 50 60 70 80 90 100


Writing blogs or contributing to online references such asWikipedia

Playing video games on the go (on handheld game

device or phone)




Listening to music on an iPod or other portablemusic player


Connecting with people on social networking sites

Watching/posting videos on the Internet


Managing personal digital photos and videos onthe Internet

Working from home

Watching TV on TV

Searching for/reading news and information on theInternet

Emailing from a PC

2007

2008

2009

Figure 15. Trends in US Participation in Technology-Based Activities

Figure 16. Trends in US Respondents Using Social Network Sites

Gen Y

Baby Boomers

Total US Respondents

2008

2009

Percentage of Respondents Using Social Network Sites

0 10 20 30 40 50 60 70 80 90 100

81%

87%

22%

58%

43%

75%



how to set up and use the devices.Companies could increase customer

satisfaction and reduce the time andcost associated with handling andprocessing returns of non-defectiveitems if they not only provided greaterinitial support and training to customersas a standard service but also enactedefforts to more accurately determine thereasons for product returns. For example,Accenture research on returns in thecommunications and high-tech industry3

suggests that total landed costs forreturns are about 5 percent to 6 percent

of revenues for manufacturers and 2percent to 3 percent of sales for retailers.Accenture believes consumer technologymanufacturers and retailers have anopportunity to transform the state ofreturns by using disciplined analysis oftheir returns strategies, processes andcosts to identify the actions necessary toreduce costs and substantially improveprofitability. The potential savingsassociated with such an approach can bemeasured in the tens of millions of dollars

for large enterprises.

While it is difficult to find consensusamong experts on whether the recessionis over and when the economy willimprove, there is no doubt thatconsumers agree on their enthusiasmfor the innovative technologies thathave changedand will continue tochangethe way they live their lives.With this obvious growing enthusiasmcomes great opportunity for consumer

technology companies to innovatenotonly for the benefit of those hungryconsumers, but also to support theirongoing pursuit of high performance.

The results of our most recent studyare clear: consumers appetite for

technology that enrichesand, inmany ways, simplifiestheir livesremains strong. That certainly is goodnews for companies that provide suchtechnologies and services, especiallyat a time when enterprises around theworld are working to reignite demandand growth as the economy stabilizes.

For consumer technology manufacturersand retailers, the results of our studyhave several key implications.

Innovation is key, regardless of the

market being served.

Although innovation is not the primarydriver of the purchase decisions,consumers clearly conveyed their desirefor innovative technologies. Thus,companies should view innovation asa core business discipline and ensuretheir innovation capabilities remainstrong and able to move quickly tosatisfy burgeoning demand. To that

end, consumer technology companiesshould consider beginning to embrace aconsumer-engagement-driven model ofinnovationand master-key innovationcapabilities that allow them to exerciseincreasing control of the ecosystem todeliver consumer-focused innovations.1

The ability to gain deep insights into

customers needs and preferences is a

competitive necessity.

As our research showed, consumers

have dramatically different views ofthe technology world, depending onage, country or other demographiccharacteristics. Companies withsuperior analytical and segmentationcapabilities that enable them to deeplyunderstand the needs and preferencesof specific customer segmentsandsubsequently tailor offers to meet thosesegments requirementsmay be thewinners in the post-recession world.

Emerging markets will remain the

locus of the strongest demand for

consumer technologies.As countries such as China and Indiacontinue to develop middle classeswith substantial disposable income,the growth potential of those countrieswill outpace that of more maturemarkets. Fulfilling that demand willrequire robust, highly adaptable supplychains, innovative sales channelstrategies and flexible global operationsthat can get products in the hands ofconsumers anywhere in the worldand

do so profitably.

Sustainability is not a fad and is not

going away.

Consumers, especially those in emergingmarkets, clearly indicated their interestin products that have a less-harmfulimpact on the environmentand arewilling to pay more for such products.Manufacturers, thus, need to redoubletheir own sustainability efforts toincrease the green quotient of

their products. For example, anotherAccenture research study found thathigh-performance businesses successfullymeet difficult challengessuch asthose emerging today around the issueof sustainabilityby adopting clearstrategies and successfully executingassociated changes to the business.Companies anticipating the impact ofsustainability on core areas of theiroperations are the ones that willultimately be the winners. In fact,

organizations that have effectivelyresponded to sustainability challenges areachieving financial benefits as a result.2

Consumers need help learning how to

use their new products.

So many consumers reporting theyreturned products (especially mobilephones) because they didnt workproperly suggests a sizable proportionof those returns could be becauseconsumers simply did not understand

1 This recommendation is based on the findings of aseparate Accenture research effort, Achieving HighPerformance in the Consumer Technology Industry:The Critical Role of Innovation.2 From the Accenture research report Sustainabilityand High Performance in the Communications andHigh-Tech Industry3 From the Accenture research report Big Troublewith No Trouble Found: How Consumer ElectronicsFirms Confront the High Cost of Customer Returns

Implications for ConsumerTechnology Companies


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About AccentureAccenture is a global managementconsulting, technology services and

outsourcing company, with more than176,000 people serving clients inmore than 120 countries. Combiningunparalleled experience, comprehensivecapabilities across all industries andbusiness functions, and extensiveresearch on the worlds most successfulcompanies, Accenture collaborateswith clients to help them becomehigh-performance businesses andgovernments. The company generatednet revenues of US$21.58 billion for

the fiscal year ended Aug. 31, 2009. Itshome page is www.accenture.com

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All rights reserved Accenture 2010.Accenture, its logo, and Accenture HighPerformance Delivered are trademarks ofAccenture. This document is producedby consultants at Accenture as generalguidance. It is not intended to provide

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