Organisers herald CE innovations aplenty at IFA 2017
As we arrive at the gates of IFA 2017, organisers Messe Berlin and gfu have set the tone for the coming months in terms of global industry trends – with research organisation GfK underlining the fact that turnover remains high.
“The products and markets for home appliances and consumer electronics are growing together more and more,” said Hans- Joachim Kamp, chairman of the gfu supervisory board, who opened the insights and trends session on July 11.
Kamp was also very upbeat about IFA’s unique and ever-expanding role as the world’s leading industry event. “No other fair meets the requirements of the leading brands of the industry, commerce, consumers and the media involved,” he said. “This is the reason for the steady success of the IFA, which is reflected, for example, by a continuously growing order volume of more than 4.5 billion euros.”
Jürgen Boyny, Global Director, Consumer Electronics at market researcher GfK Retail and Technology, said, “Nearly $950 billion in total annual sales are expected in 2017, with even more in 2018. Whether at home or on the road, the smartphone is shaping market advances. The smartphone is connecting all areas of daily life, from the TV in the living room to the washing machine, coffee machine, or bathroom scales. The Internet of Things has already reached the consumer.”
Describing the “technical world” as the “always on” world, Mr Boyny says emerging regions are driving the market. The Chinese market is now as big as the North American market, making up a total of 23% of global demand. This growing market made up for 22% of global demand in 2016 and 21% in 2015.
The main driver is of course mobile connectivity as the smartphone is used for so much more than just the telephone. Mobile payment, VR & AR, smart home and connected cars are all enabled by the smartphone. Smartphone sales continue to grow rapidly, with GfK forecasting 1.48bn unit sales in 2017 (up from 1.41bn in 2016) and 1.55bn sales in 2018. Mobile payment is also a revolution for retailers. Mr Boyny underlines the fact that in China, one can “mobile pay” for virtually anything today. In this sense, China is eight to nine years ahead of the west. Instore mobile shopping is running at 24% in China as opposed to just 2% in the USA.
In terms of consumer electronics trends, Kamp explained that the TV and PC markets are growing both in Germany and throughout Europe, though the latter at a slightly higher rate. “This is the first time that PCs have outsold TVs in terms of household use in Germany,” he said.
Both these markets are benefiting from the massive growth in streamed content, most of which is viewed by the 16-39-yearold demographic. Yet much of this content is also consumed on smartphones in Germany, which is the most purchased consumer electronics good, with 19% of the market – as opposed to 13% for TVs.
Nonetheless, the rise of internet-enabled Smart TVs make the TV market a growing medium for streamed content – 42% of German households now own a Smart TV, and of these, 88% are connected to the internet.
A QUESTION OF RESOLUTION
Ultra HD TV has firmly established itself in the TV market, with 47% of TV buyers in 2017 purchasing on the basis of higher screen resolution (as opposed to 36% in 2016).
Kamp also noted that online content providers are also now offering films in UHD. Of this content, American programming dominates, with US providers like Netflix and Amazon Prime being the top two videoon- demand providers in Germany.
All-in-all, most new TVs presented at IFA 2017 will utilise design elements as their key USPs, with ultra slim models that can be mounted flush on a wall with magnets, for example.
OLED TV EXPECTED TO GROW TO MORE THAN 50% OF $1,000-PLUS MARKET BY 2019
As the global TV market continues to struggle with unit volume growth overall in 2017 – now projected to decline for the second year in a row – attention has turned to the most profitable market segments.
This includes larger screen sizes and advanced technologies like OLED, quantum dots, 4K and HDR, each of which helps boost average selling prices and profits. In fact, OLED TV revenues are forecast to grow 71% year-onyear in 2017, while 4K TV revenues will increase 31% year-on-year, according to IHS Markit. A number of brands have adopted OLED technology into their TV lineups in 2017, including Sony, Panasonic and Loewe, joining LG Electronics, the primary promoter of OLED.
Meanwhile, by 2020, 8K LCD TVs will have launched in all regions, primarily at 65-inch and 75-inch screen sizes. At the early introduction stages, 65- inch 8K LCD TVs will carry a 35% premium against 65-inch 4K OLED TVs, but gradually reduce as capacity rapidly increases in LCD fabs optimised for 65-inchplus screen sizes.
VR NEEDS TIME
Virtual Reality was another important part of the gfu trend survey. While there is massive potential for the medium to grow significantly in the coming years, the current state of the market is sobering. Virtual Reality remains a peripheral trend, with only 4% of the respondents in the latest survey having purchased a VR product. Meanwhile, 63% of interviewees stated that they have no intention of using VR.
The forecasts are very good, however. Kamp explained that exponential growth for VR goggles, particularly for gaming and entertainment applications, is promised in the next 5 to 10 years.
Ralf Schäfer from the Fraunhofer Heinrich Hertz Institute that focuses on VR development, reconfirmed that the potential market was huge. In principle, every smartphone is a VR device, he said; something Samsung has already shown with the success of Samsung’s Gear VR.
THE TECHNICAL CONSUMER GOODS MARKET IS DRIVEN BY INNOVATION. CONNECTIVITY WILL ENTER ALL SECTORS OF DAILY LIFE
Meanwhile, the quality needs to improve through higher resolutions screens, says Schäfer, stating the market will explode when 8k goggles are ready for market in threeto- five years. That’s not far away, meaning consumer electronics manufacturers need to be ready to adopt a sleeping giant technology.
Most homes are “becoming” smart as TVs become smart, and entertainment becomes smart – from the cloud. Home automation is coming of age, and here again, the Chinese market is leading.
CONNECTED / AUTONOMOUS CARS
There are still a lot of legal issues. But the car is already connected to the smartphone, and many cars have voice control. This development will continue.
The biggest market is China – this year +63% China has 36% market share in 2016 – is the biggest and fastest growing. Overall, the Technical Consumer Goods market is driven by innovation. Connectivity will enter all sectors of daily life, but according to GfK’s Jürgen Boyny, the “Internet of Things” is a difficult thing for retailers to present, as people don’t come in asking for IoT. Consumers, he says, have to understand the benefits of connected devices, connectivity needs to be shown as a new benefit and people have to become excited about it.