Connected Home Devices

No other vendor offers the combination of timely, consistent and accurate tracking of 22 different product categories spanning audio, video and computing,

February 18, 2015 14:17 dmercer

The latest forecast for global games console adoption from my colleague Eric Smith quantifies the scale of Sony’s impending victory in the latest generation. We predicted the PS4’s victory several months before both it and the Xbox One were launched. At that time our consumer surveys were showing, as we put it, a “50% lead” for PS4. The fact that our detailed models are now predicting that there will be 40% more PS4s in use than Xbox Ones in 2019 is amazingly close to that early prediction.

To confirm the details, the global active installed base of Sony’s PS4 is predicted to reach 80.0M units by 2019, compared to 57.0M for Microsoft’s Xbox One, a lead of 40%. Both consoles will be near the peak of their life cycle at that time, although there will be room for further modest growth.

 

There is positive news for all console vendors, however, in the strength of the games consoles business overall. We have heard so often over the past 10-20 years that the console’s days are numbered, with various reasons being cited, most recently the “inevitability” of cloud gaming and competition from mobile devices. In spite of those apparent threats the demand for premium quality TV-based games seems to be as strong as ever, and doom-mongers have had to eat their words once again.  

Nintendo’s Wii U will trail a long way behind its rivals – it is looking more and more like Nintendo struck lucky with the original Wii, after failing with the GameCube and now the Wii U. Nintendo must decide if it is going to let the console business remain a two-way battle when the next generation comes along – I suspect it won’t but it will be sorely hurt by its latest experience.

David Mercer


February 11, 2015 05:26 dwatkins

I took the opportunity of being in Tokyo this week to visit one of the country's leading consumer electronics retailers, Yodabashi Camera. The Akihabara branch I visted is vast with products arranged into clear categories across 6 floors. I headed straight to the busy Audio Visual floor to check out the 4K TVs on show and I was immediately struck by just how much floor and shelf space was taken up by 4K models. In fact you had to look pretty hard to find a non-4K set. Row upon row of 4K TVs were arranged by screen size from Sharp, Sony, Panasonic, Toshiba and Mitsubishi as well as South Korea's LG. Each brand also had a generous section of wall space to show off their flagship products. Sizes for 4K models ranged from 40-inches up to 65-inches with the lowest price I found being LG's 49-inch UB8500 at ¥148,000 ($1240). At the other end of the scale, Sony's 65-inch X9500 model was on offer for ¥799,000 ($6700).

In common with other markets around the world, Japan's TV market is trending towards larger sizes with 50-inch and above sets accounting for 14% of TV units sold during 2014 compared with 10% in 2012 and just 6% in 2010. Consumers who are in the market for these larger sizes increasingly have no choice but to buy a 4K version as vendors are drastically reducing their line up of 1080p models in those larger sizes. However, it was interesting to see that Japanese consumers have a wider range of sub 50-inch 4K TVs to choose from than we have seen so far in Europe or the USA. The 40-49-inch screen size category accounts for around 20% of TV sales in Japan. 

The staff at Yodabashi were very helpful and there was always someone on hand to ask a question to despite how busy the store was. On the downside very few of the 4K sets seemed to be displaying actual 4K content and when they did it looked to be a pre-loaded show reel. Therefore, on the rare occasion that a 1080p and 4K TV were next to one another I did find it difficult to see an improvement in the picture quality or resolution on the 4K set, even at 55 and 60-inch sizes.

Soundbars were also prominent on the shop floor from a variety of TV and audio specialist brands. The soundbars were often displayed below the 4K TVs but sadly were not always connected and working. Surprisingly there did not seem to be much in the way of TV and soundbar bundling offers.

Before leaving I checked out the audio section and got lost for a few minutes in the aisles of bluetooth speakers, mostly low-end products but some higher end devices were on display from the likes of Bose and Sony. High resolution audio equipment was also fairly prominent but there was no sign of any multi-room audio capable devices. High-end audio brands such as Yamaha, Marantz, Onkyo and Pioneer all had their own enclosed area on the store floor in which brand representatives were on hand to demonstrate the latest range of products from Hi-Fi systems to AV receivers, floor speakers and even professional mixing decks.

Yodabashi Camera certainly does a great job in terms of offering consumers choice and advice and while the sheer size and range of products on offer may seen overwhelming at first, the stores are easy to navigate and consumers are given plenty of opportunity to test products out for themselves. I know a few European retailers that would benefit from taking a leaf out of Yodabashi's book!

David Watkins


January 16, 2015 17:19 MGoodman

When Sony first launch its cloud gaming service, PlayStation Now, it allowed for individual game rentals in increments of 4-hours, 7-days, 30-days, and 90-day. This model, however, is confusing, cumbersome, and costly. For example, God of War: Ascension cost $5.99 for a 7 day rental and $14.99 for 90 days while NASCAR ’14 cost $5.99 for a 4 hour rental and $39.99 for 90 days. PlayStation Now needed uniformity in pricing and a simple subscription model.

Sony knew that this was an issue and according to a November post on the PlayStation blog by Director of Marketing of PlayStation Now, Peter Jamshidi, a subscription option “was coming” to PlayStation Now. Well that time has arrived. At CES, Sony unveiled a subscription service for PlayStation Now. This service includes unlimited access to about 100 titles and costs $19.99 for one month or $44.99 for three months.

This announcement is a big step forward for Sony as it rounds out the PlayStation digital distribution model. At its core, there are three ways to monetize games – subscription, rental, and sell-thru (plus free). Sony has now embraced all of them, including free. The only remaining question is whether Sony has priced PlayStation Now’s subscription service to high. At $19.99/month or $44.99 for three months PlayStation Now is charging a pretty high premium compared to a service like OnLive, which has monthly packages ranging from $9.99 to $12.99. As evidenced by Netflix and other subscription VOD services the sweet spot for cloud based on-demand subscription services seems closer to $10 than $20.


January 7, 2015 00:28 dwatkins

CES 2015 – Day One (Tuesday)

Television sets have long been the darling of CES despite the efforts of mobile devices, smart home and wearables to dislodge them from their throne in recent years. If yesterday’s press day announcements and the throng of people forcing their way into the central hall booths of the major TV vendors this morning is anything to go by then the TV has certainly retained its position as the king of tech at this year's show.

UHD TV - A focus on better not just more pixels

TV vendors are well aware that higher resolution on its own is not enough to generate a real step change in picture quality (although of course resolution is the easiest element to market to the consumer). The four other main ways to improve picture quality are through higher frame ratesbetter colorimetrygreater bit depth and higher dynamic range. At CES 2015 most of the major TV vendors are addressing all of these elements to a certain degree but it is the enhancements to color and dynamic range that have been getting most of the attention on the show floor.

Several LCD TV vendors including Samsung, TCL and LG are looking to widen the color gamut on their sets by employing a technology known as Quantum Dots which are essentially nanocrystals that emit their own light and create a range of colors that can exceed 100% of the NTSC standard. QD Vision is a major supplier of Quantum dot technology with its Color IQ system and has been used in Sony’s Triluminous TV displays for a few years now. TCL has also partnered with QD Vision to bring quantum dot technology to its UHD 55 inch H9700 model which is due to launch in the US in the second half of 2015. LG sources its quantum dots from Dow Chemical, a rival of QD Vision, and the company has also developed its own wide color gamut solution which it calls ColorPrime which it will offer in its step up UHD series. LG is seemingly hedging its bets between the two color solutions, letting the consumer decide which is best. Sharp was also touting its own wide color spectrum technology calledSpectros.

Samsung, Sharp, LG and Sony all announced that they will be building High Dynamic Range (HDR) technology into select UHD models this year. HDR is effectively better contrast ratio allowing for darker blacks and brighter whites to bring more clarity and detail to images. The three major suppliers of HDR solutions are Dolby with its Dolby Vision suite, Technicolor and Philips but at this stage it is not clear which HDR solution each TV vendor will be using. Significantly the only way to benefit from the built in HDR technology is to watch content that has been mastered in HDR which is virtually non-existent at present. Netflix is looking to rectify that and announced at both the LG and Sony press events that it would add HDR to its 1080p and 4K streaming services later this year and would support all HDR standards adopted by the newly formed UHD Alliance of which Netflix is a member along with Dolby and Technicolor. 

All of these LCD UHD TV display improvements should be applauded as they really do bring about a step change in picture quality that is far more impactful than just a pure increase in resolution. However, the industry must think carefully on how to promote these new technologies in order to avoid creating consumer confusion or worse potential backlash from those consumers who have already spent thousands of dollars on older non HDR or wider color gamut models.

 

 

David Watkins


November 25, 2014 20:00 MGoodman

NVIDIA is joining Sony’s PlayStation Now as the latest major player in the gaming industry to tackle cloud gaming with the launch of the NVIDIA Grid Game Streaming Service. Many have tried, none have succeeded (yet), but that has not diminished the enthusiasm of NVIDIA, Sony, and many others for cloud-based gaming.

Unlike past entrants in this space, NVIDIA and Sony are well-steeped in the gaming industry and stand a far better chance at success. A comparison of the two services yields a more complete feel for PlayStation Now whereas NVIDIA Grid Game Streaming Service still has some bugs to work out. That being said, we don’t see Sony and NVIDIA competing head-to-head in the market, at least not in the short to mid-term. While both are launching cloud-gaming services, they appeal to different segments of the market, PlayStation Gamers vs. PC Gamers. This gives NVIDIA some breathing room in the short-term to work out the kinks before the space becomes more crowded and the two do start to challenge each other.

For a more detailed analysis of the two services see NVIDIA Goes off the Grid with Cloud Gaming Solution.


October 31, 2014 14:05 dwatkins

Less than 6 months after the launch of its $99 streaming media box, the Fire TV, Amazon has decided to go head to head with Google’s Chromecast ($35) and Roku’s streaming stick ($50) by earlier this week launching its own HDMI media streaming dongle which will retail for $39 or can be had for just $19 for fast acting Amazon Prime customers.

Much like the Chromecast and the Roku streaming stick, Amazon’s device plugs straight into the TV’s HDMI port and facilitates the streaming of video from sources such as Netflix, HuluPlus, Watch ESPN and of course Amazon Instant. Like its rivals the Amazon Fire TV stick allows you to mirror your smartphone or tablet display on the TV screen although this functionality is only available to those owning a Fire phone or Fire Tablet or a Miracast-enabled device.

Amazon looks to have got one up on Chromecast in this fast growing market by not only providing better hardware specs than its streaming stick rivals (including 1GB RAM, 8GB storage and dual band Wi-Fi )but also by including a dedicated remote control in the box. Amazon claims that users do not want to be restricted to using a mobile device such as a smartphone or tablet to control their viewing experience and by giving consumers giving the option of a dedicated remote (without impacting significantly on the cost of the device) may give Amazon the edge over its rivals from a hardware perspective at least.  It must be noted however that the Bluetooth remote that is supplied with the stick does not include voice control. The voice controlled version can be purchased for an extra $30.

On the one hand, the launch of a streaming stick is a smart move from Amazon as the low cost of the device will mean that Amazon can build a sizeable base of Fire TV devices at a much faster rate than if it were to rely solely on the more expensive Fire TV box. The more Fire TV devices that are out there, the more potential it has to attract content partners and subsequently sell more Fire TV devices.  The timing of the Fire TV stick launch is also significant as it will allow Amazon to capitalise on the holiday shopping season and at $19 or even $39 the device is an ideal stocking filler.

On the other hand, while the Amazon Fire TV Stick will appeal to Amazon’s Prime customers (especially so at $19), this is exactly the same audience that Amazon has been targeting with its more expensive Fire TV box. So does Amazon run the risk of cannibalizing sales of its own product?

Low cost digital media streaming sticks are all the rage at the moment and are proving hugely popular with consumers who want quick and easy access to their favourite OTT video services. While certainly less powerful and not as feature rich as their set-top cousins, streaming sticks remove the need for another box and are also the ultimate travel device for catching up on shows on your hotel room’s TV.

Roku, Google and now Amazon have all decided on a two pronged hardware approach to the OTT TV streaming market in an attempt to appeal to as wide a base of users as possible. Each runs the risk of cannibalizing its own sales but each sees the necessity of building as large a base of users as possible in order to attract more content partnerships and in the case of Amazon and Google, drive more consumers to their respective content stores and services. In this writer’s opinion, Roku arguably has the most to fear from Amazon’s latest product announcement not only because yet another technology heavyweight has stepped into its core market but also because the increased competition could present problems for its rumoured IPO. Meanwhile, as Apple continues to ponder its next move in the TV space, Google and Amazon will make hay and steadily gnaw away at Apple and Roku’s leadership position as they look to strengthen the loyalty of their existing fan base and entice new users into their respective ecosystems.

 

Strategy Analytics’ Connected Home Devices service provides ongoing analysis and insight on developments within the market for TV-centric OTT devices including a quarterly vendor share tracker for Smart TVs, Smart Blu-ray players, IP-enabled Games Consoles and Digital Media Streamers such as Apple TV, Roku etc.

 David Watkins


October 14, 2014 14:49 dmercer

In the mid 1990s, when the internet was starting to be used by general consumers, we used to talk about a vision of the connected world. Even in the days when “internet” meant “web browser and email on a PC with a tortuously slow dial-up connection” there were enough signs that connectivity would move beyond this simultaneously miraculous yet antiquated model and affect a mass of devices and services that hadn’t yet been invented. There were many false starts, even in those days, as forward-thinkers tried to offer, as an example, streamed music to standalone radios which, somehow, were expected to perform in a pre-broadband era.

The connected world is now well and truly upon us, as our latest research shows. By the end of this year nearly 12 billion devices around the world will rely on internet connectivity, and only 10% of them are PCs. They have been passed, inevitably, by smartphones, but the “Internet of Things” (IoT), which includes M2M, smart objects, smart grid and smart cities, is the single biggest segment, accounting for more than 40% of connections.

 

By 2020 we expect the global installed base of connected devices to have reached more than 33 billion, which will equate to 4.3 devices for every person on the planet, up from 1.7 today. By that time the mix will have shifted even further away from PCs (and smartphones). The biggest growth opportunities over the rest of the decade lie in smart home, wearables and IoT. Beyond that, developers and planners from all industries can work on the assumption that internet connectivity will be ubiquitious, in many parts of the world, and this should whet our appetites for another phase of expanding and exciting possibilities.

David Mercer

 


October 6, 2014 14:31 dwatkins

As a British expat living in Bordeaux, France I decided to sign up to Netflix over the weekend and give it a test run for a month before deciding whether to ‘cut the cord’ and ditch my relatively expensive Canal+ subscription on which I have been relying for my fix of English language TV shows and films.

 

Signing up to Netflix was a doddle and as you would expect with the service, the user interface is clean, easy to navigate and content is well categorized into all the most commonly used French genre types. I set about streaming the first season of the US hit show Breaking Bad to my TV via my laptop using a Chromecast dongle plugged into the HDMI port at the back of my TV. Netflix is a one of several services supported by Chromecast and therefore has a dedicated ‘Cast’ button built into the interface allowing for a higher quality viewing experience compared to simply mirroring the PC’s screen on the TV. Furthermore, once you click the ‘Cast to TV’ button within the Netflix app, the Chromecast dongle takes over the streaming responsibilities with the PC (or mobile device) effectively becoming the remote control. The overall experience of using Netflix on the TV was excellent with virtually no lag between choosing a show and it appearing on my TV screen. In fact the experience was far better than I have been used to when trying to access TV shows or movies via the Canal+ VOD service which involves clicking through a myriad of tiles to find the content you want, a task that can take several minutes.

 

Overall the current content offering on Netflix in France is a little underwhelming and so it will be interesting to see how quickly the company can boost its library of TV shows and movies. American content dominates with TV series like Breaking Bad, The Walking Dead, Fargo, Modern Family and Homeland all getting prominent placement on the home screen. These types of show are very popular in France – my French friends here regularly talk about them over an aperitif. There is also a smattering of TV shows from the BBC including Sherlock, Broadchurch, Downton Abbey, Misfits, Doctor Who and Top Gear.

 

Significantly, French language content is relatively thin on the ground. I counted approximately 50 French movies which prompted my cinema-loving French wife to cry out “C’est tout?”. There are a few classics in there but very few films post 2006. There are also very few French TV series listed (8 in total) and half of these are crime documentary series. In this respect the Canal+ offering is far superior.

 

The kids content library is pretty well stocked however. My 4 year old son was pretty excited to see so many Disney classics as well as some French cartoons he already watches on regular TV. We certainly won’t need to ask for any new DVDs from Pere Noel this Christmas!

 

Netflix has made an impressive start to life in France as reported by our recent Digital Media Strategies Insight Netflix Off to a Strong Start in France.  English speaking expats like me will appreciate the wide range of popular US and British programming. However, there is a distinct lack of French language content which will turn a lot of French people off particularly the older generations. Unless Netflix can quickly add some compelling French language content I won’t be surprised if quite a number of subscribers end up cancelling their subscription as soon as their one month free trial expires.

 

 

David Watkins


October 6, 2014 13:42 esmith

Nothing says mea culpa louder than this timeline:

Oct. 2012

Windows 8 Release

Oct. 2013

Windows 8.1 (Service Pack)

Sept. 2014

Windows 10 Tech Preview

Just as Microsoft did with its troubled Xbox One rollout, it has quickly recalibrated to better respond to user demands with its Windows 10 Technical Preview. The open beta program will gather user input in the run-up to an official release expected for Q2 or Q3 2015 while showing how much Microsoft understands the complaints levelled against Windows 8/8.1.

Our recently updated PC forecast is showing that Microsoft Windows is slowly losing market share of PC operating systems as Apple performs above the market average and Google’s Chrome OS continues to gain traction among low-price tier customers and educational institutions. Meanwhile, Windows 7 can no longer be pre-loaded on consumer PCs beyond October 2014 and enterprise PCs will likely have this privilege for another 18 to 24 more months.

Yours truly installed the Windows 10 Tech Preview on an old PC on its last legs (clean install, leaving Vista far behind) and found it to be a milder and more pleasant version of Microsoft’s modern computing user experience. Windows 10 completely reverses many of the changes consumers disliked about Windows 8/8.1 (the Start Menu is back, the traditional desktop is front and center) while keeping some of the best features (“Metro” or “Modern” apps now run in windows and Live Tiles bring streamed updates, though as a subset of the Start Menu).

Source: Microsoft

To be fair, Windows 8 was released at an inconvenient time for the PC industry and the slump of the PC market is much more attributable to changing PC usage patterns, replacement cycles, and hardware specifications out-performing common software requirements. Those fortunate enough to have touchscreen displays reviewed the OS much more favorably. Unfortunately, touchscreen PCs cost about $100 to $200 more than their non-touchscreen counterparts in 2013, hobbling the OS during a crucial proving period. These factors and more are explored in greater depth in our recent report, “Computing in the Post-PC Era: Growth Opportunities and Strategies.”

 

- Eric


October 3, 2014 09:11 dmercer

The latest research from our Connected Home Devices team, the Global Connected TV Device Tracker, shows that the number of connected TV devices installed globally reached just short of 500 million devices in Q2 2014, an increase of 7% over Q1. The research covers all connected TV devices such as smart TVs, smart blu-ray disc players, games consoles and digital media streamers.

The market is becoming increasingly fragmented: Today the top six brands account for 72% of the installed base; two years ago it was 85%. This reflects the fact that newcomers are joining the market all the time, Google’s Chromecast being one of the more prominent recent entries. It also results from the fact that the early days of connected TV were dominated by games consoles. But as smart TVs and digital media streamers have become widespread the share of consoles in the installed base has fallen from 95% to just over a third in the past four years.

While we inevitably hear a lot about newcomers like Google and Amazon, and long-time player Apple, the market leaders are traditional vendors Sony and Samsung. Sony accounts for nearly a quarter of installed connected TV devices, although its share has been falling slowly for a couple of years. Samsung has only recently become the number two player, passing Microsoft and Nintendo.

 

 David Mercer

Google, Amazon and Apple have minor shares on a global basis but are clearly ones to watch as they evolve their connected TV strategies. We will also be watching for some level of platform consolidation around Android, which is likely to become one of the important stories during 2015.