Flexible thinking

While the CE market flattens as mobile phone revenues peak, this $1.1 trillion retail industry is already shaping the future with flexible TV screens, Virtual Reality and voice control, says Simon Bryant, associate director, consumer electronics, Futuresource

The past decade has been characterised by the seismic impact of smartphones on consumer behaviour and markets alike. As mobile penetration begins to saturate and product evolution slows, how will the next decade of consumer technology be characterised?

New areas of innovation such as VR, AR [Augmented Reality], voice and flexible displays have the potential to revolutionise entertainment experiences, productivity, communication, education, fashion, and more.

Even more established categories such as smartwatches and the smart home remain far from developed in terms of adoption and technology maturity.

Ultimately, all of these areas of innovation are enabled by broader, underlying technology evolution – such as IoT, 5G connectivity, electronics miniaturisation, neural networks and machine learning, and 3D image capture, among others.

The rapid uptake of Amazon’s Echo and the rising popularity of voice usage in smartphones has put voice technology firmly in to focus over the past 12 to 18 months, forcing many CE vendors to accelerate or change existing product roadmaps.

Assistants

Voice will be supported in almost 51 per cent of wi-fi speakers sold in 2016, with volumes up almost threefold on 2015. Voice is already supported in every smartphone in use today and usage is stronger among millennials.

By adding voice to a constantly learning speaker, and giving it access to cloud services (essentially what makes it an ‘assistant’), audio devices have suddenly become multifunctional, where the value proposition becomes much more than the sound, appearance and software design.

Futuresource research showed that 59 per cent of Amazon Echo owners’ primary reason for buying the product was for ‘online purchases’, and 31 per cent for ‘setting reminders’. Audio hardware has become more than just audio, and ultimately the functionality is expected to be a catalyst for smart-home products and services.

Voice offers key benefits over visual and touch interfaces in certain environments and for certain applications, such as organising music while driving, or multitasking around the house.

Soundbars are merging functionality with set-top-boxes so that consumers can control their video content with voice and this could go some way to replacing the countless controllers and program menus.

VR is a much-hyped technology with considerable consumer excitement, and there is no question consumers need to try VR to understand how compelling the experience can be. This represents an opportunity for physical retailers and a challenge for the wider industry.

Global headset sales, currently at 0.5m units ($87m [£70m]), are set to grow to 67.3m units ($7.5Bn) by 2020, with growth being driven primarily by interest in viewing VR games. Despite a rapid growth in VR headset ownership, 2020 household penetration is still only expected to reach an estimated six per cent, with plenty of room for further growth. Overall, the consumer VR content market will grow from $113m this year to $8.3 billion by 2020, with VR games reaching $4.9bn (59 per cent, up from 56 per cent in 2016) and video-based content $3.4bn.

There are unresolved questions around the best way to monetise VR and 360-degree video, though, as it is very much a new medium, which has limitations on which genres it is suited to.

For both video and gaming, VR presents significant technical challenges: new skillsets will have to be learnt and standards developed. Many end users report experiencing motion sickness when using VR. This could be a major barrier to VR and 360 content.

Augmented (or Mixed) Reality represents a distinct opportunity and challenge. The halted Google Glass project and faddy Pokémon Go represent what most people think of when they consider AR.

Despite Google Glass perhaps being before its time – and ugly – smart eyewear already has successful applications in B2B and among drone operators and more recently athletes.

Both Augmented and Virtual Reality represent opportunities for various devices and accessories, as well as content – head-mounted displays, mobile devices, consoles, cameras (360-degree and 3D), sensors and haptics, for example.

Significant

Curved and bendable displays have met lukewarm reaction among consumers to date. However, they mark the beginning of a significant area of innovation for the future, which will no doubt benefit a number of B2B any consumer markets, including smartphones, tablets, smartwatches, automotive electronics, digital signage and TVs.

Smartphones represent the single biggest opportunity, partly because it’s such an enormous market, but also because demand for larger screens sizes is only restricted by demands on portability.

Samsung is launching a bendable phone in 2017 and has recently filed a patent for a fully foldable screen, resembling old flip phones. Ultimately, vendors are developing fully flexible and rollable displays.

Flexible displays are finally moving from the development lab to commercialisation and potentially can inject much-needed growth in a sluggish electronics industry, creating innovative design opportunities and industry rejuvenation for raw material suppliers, semiconductor and hardware vendors.