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May 13, 2014 11:59 dmercer

Xbox made two key announcements today which should help the Xbox One recover from a slow start relative to Sony’s PS4. First, it will offer a new SKU by unbundling Kinect and offering the standalone Xbox One console at $399.  Second it will make entertainment apps like Netflix available without the need for the paid-for Live Gold subscription. These moves will be introduced in all Xbox international markets on June 9th. According to Xbox, “executives have taken customer feedback very much to heart” and recognise that these changes represent “significant business decisions”.

These are two important steps which could be characterised as the removal of two of the lynchpins of Microsoft’s previous strategies. Xbox has pioneered advanced user experience over the past few years with the Kinect technology.  While it admits that Kinect does not always work well with everybody, It had clearly hoped that its appeal was now wide enough that bundling it as standard with the Xbox One console would not prove an obstacle to beating its main rival, Sony’s PS4. That assumption proved wrong and Xbox is now putting it right.

It’s worth considering how Kinect could have been improved. Our own recent research (Xbox One: The Rise of the 'Media' Console) found positive feedback on many of Kinect’s capabilities, especially the TV guide voice and gesture controls. At the same time, as Xbox management confirmed to me today, the company recognises that it has not made as much progress in providing must-have Kinect-based game content as it would have liked. It is perhaps this element above all which frustrates potential Xbox One users who reason that they shouldn’t be asked to pay for something which is used relatively seldom by developers.

In my view the other strategic change could be equally important. Microsoft took the important decision in the days of the original Xbox console to charge for online capabilities, in contrast to its main console rivals. While this may make sense for many gameplay functions, it has always seemed to be pushing things a bit far to keep non-game apps and services behind this paywall. Opening up Netflix and Sky to more casual users should help broaden the appeal of Xbox One still further.

David Mercer

March 20, 2014 12:58 dmercer

Before Christmas I posted a warning to today’s twin tech titans that they couldn’t afford to rest on their laurels. After analysing the latest results from our ConsumerMetrix survey it looks like that warning has intensified for at least one of the two. Apple had one of the weakest performances during the second half of 2013 in our brand preference survey. Its overall rating fell by 5.1 points to 17.3 compared to the first half of 2013 leaving it in fifth place behind HP and only slightly ahead of LG in sixth place.

Apple’s decline was marked by a significant change in ratings from its core customer base, the young and affluent. In the most affluent households (more than $100k annual income) Apple saw the biggest decline of the 21 technology brands included in the survey.

When I discuss our Brand Preference Index with people for the first time, many are surprised to find that Apple is not the number one brand in the first place. In fact it ranked third in Q4 2012 and has slipped to fifth a year later, behind Samsung, Sony, Microsoft and HP.

Source: Strategy Analytics ConsumerMetrix survey, Dec 13/Jan 14


Methodology: The 2013 Q4 ConsumerMetrix survey was fielded online in December 2013 and January 2014. The sample consisted of n=2024 individuals in the US and n=4095 individuals in Europe ages 15-65+. The data was weighted by country, age, gender and internet use to represent the US and European populations of internet users, respectively.

But Apple is not even in first place in highest income households – it ranks fourth - and, as noted, its rating here has been falling rapidly. Apple clearly gets strong media coverage in general and particularly when it launches new products, leading to the perception that it is a market leader in many ways. We believe that the fact that Apple has had fewer high profile launches and obvious hits in recent times is one factor behind its apparent recent decline. It would seem highly unlikely that the brand will continue to fall rapidly in this Index, but the warnings from brands like Blackberry and Nokia suggest that things can change more quickly than anyone had imagined. In a competitive technology market even the leaders cannot afford to relax.

I believe there are several reasons why Apple is not ranked as highly as people expect. One is that we ask respondents to consider what they would normally spend on technology products. It seems that respondents recognise that Apple is a premium brand and, however appealing it might be, those who can’t afford it would not realistically be able to buy it. This analysis is confirmed by the fact that Apple’s profile is weighted heavily towards higher income groups. It ranks only ninth with people who live in the lowest income households.

David Mercer

March 4, 2014 11:43 dmercer

Following my post from CES back in January, more positive news for UHD TV emerges after we have completed the weighting of the latest European survey data in our ConsumerMetrix service. As in the US we found strong interest in buying a new UHD TV over the next two years, assuming the products meet performance and price expectations. 55% of Europeans said they would be very or somewhat likely to buy a UHD TV over the coming two years, split between 15% very and 41% somewhat likely (difference due to rounding).


As I noted previously, the survey question asked respondents to make certain assumptions:

 Ultra HD or 4k TV is a new type of TV which offers significantly improved images compared to today's HDTV. Assuming the price of an Ultra HD or 4k TV was acceptable to you, and assuming the image quality was as good as is claimed, how likely would you be to buy a new Ultra HD or 4k TV within the next two years?

 Some commentators questionned our approach but we feel it is justified to ask consumers to make assumptions about things they are not familiar with. At minimum this research demonstrates that people are indeed interested in improving their big screen TV experience, even when they already have HD. This is an important finding in itself, given that there seem to be many observers doubting the need for Ultra HD or indeed the future importance of the big screen in the home in general.

 Our study also reached the following conclusions:

                    ·        Awareness of the term “Ultra HD” is much higher than either “4K TV” or “UHD”

·        Awareness of Ultra HD declines with age and increases with income

·        Two thirds of higher income households would be willing to buy an Ultra HDTV

·        Intention to buy Ultra HDTV peaks in the 25-34 age group

·        Other indicators of intention to buy Ultra HDTV are number of children in the household and ownership of surround sound systems

David Mercer


January 12, 2014 19:28 dmercer

Amongst the many TV-related themes at CES 2014 was the widespread entry of curved TV screens. Widespread, at least, in the sense that most major TV vendors were showing curved models, without necessarily committing to launch dates or pricing. This included many Chinese brands, who demonstrated their growing strength in global CE markets not only by building bigger and more impressive CES booths every year but also by getting ever closer to catching up on the technological leadership of traditional Korean and Japanese competitors.

There was a lot of anecdotal debate during CES, both in panels and on the show floor, regarding the merits of curved displays. I should confirm at this point that Strategy Analytics has not yet conducted its own user experience research on these displays and until we do, or until the market begins to provde concrete evidence of their appeal, the jury will remain undecided. Nevertheless I can say that we are probably starting from a position of broad scepticism regarding the proposed benefits of this technology. Most CES booths displayed some kind of quasi-technical explanation, usually involving themes such as immersion and fields of view. One major vendor assured us that its own internal user testing had proven beyond doubt that people preferred curved to flat displays.

There is a slight point of irony, of course, in that the CE industry had worked hard for many years to deliver flat displays, after spending the first few decades offering rounded (convex) screens using CRT technology. Flat-ish screens were first achieved by Sony with its famous Trinitron technology, something which helped to secure Sony's leadership in TV back in the 1980s and 1990s. Those displays were flat vertically but curved horizontally. I have no doubt that Sony at that time presented compelling user evidence and technical explanations why that display type was the best for viewing television images.

Rear projection TVs had been flat since the 1970s but these offered poor quality images compared to CRTs and never caught on outside the US. Once flat panel technologies started to penetrate the large screen TV market in the late 90s and 2000s the mass market era of the true flat display had finally arrived. Consumers switched quickly once prices fell, although the thinness and convenience of flat panels was as much a factor in CRT's demise as their flatness.

Now the industry is telling us flat is not good enough. Time will tell. I have been around long enough to know that the cool factor can be enough to drive demand for technologies which may have a relatively weak technological grounding. I would just voice one note of concern after a visit to Samsung's booth. Samsung was showing a side-by-side demonstration of flat and curved TVs, which, I was assured by one representative, were identical in every respect except for the fact that one was curved. The curved display had noticeably improved colour depth and I was told that this was entirely a visual effect caused by the screen's curvature. Unconvinced, I approached a second Samsung representative who confirmed that curved TV did indeed incorporate Samsung's video processing technology Auto Depth Enhancer. While relieved that my ageing eyes had not completely deceived me, I was naturally concerned that such poor information was being given to visitors to Samsung's booth. Not only that, but while I was viewing the demonstration Samsung was interviewing other visitors on their perceptions of the two displays. It will clearly be inadvisable to rely too much on the results of that research if it is intended to demonstrate the benefits of curved v. flat in isolation.

David Mercer



January 8, 2014 11:14 dmercer

Hot off the press Strategy Analytics' new ConsumerMetrix survey carried out over the past few weeks with 2024 US consumers found very strong interest in UHD TV. 19% of people said they would be very likely to buy a UHDTV and 37% somewhat likely within the next two years. Only 24% said they would be unlikely to buy one.

The survey question was phrased as follows:

Ultra HD or 4k TV is a new type of TV which offers significantly improved images compared to today's HDTV. Assuming the price elsewhere of an Ultra HD or 4k TV was acceptable to you, and assuming the image quality was as good as is claimed, how likely would you be to buy a new Ultra HD or 4k TV within the next two Years?

This looks like great news for the CE vendors introducing new UHD models this week. If they get the pricing right UHD could provide a significant business uplift over the near to medium term.

David Mercer

January 8, 2014 00:51 dmercer

New terms often emerge in order to encapsulate hot new technology trends which are less than clearly defined in the specifics or the implications. One such current trend is the Internet of Things, or Everything if you prefer, terms which may be meaningful or empty depending on individual taste. Whatever IoT or IoE ultimately mean or become, there is a strong sense at CES 2014 that their commercial impact is becoming real in some form or other, rather than simply visions on Powerpoint slides.

As an example, the smart home era is now clearly upon us, after emerging as a strong  future trend at CES over the past couple of years or so. IoT discussions generally include the apparent arrival of smart home technologies into mainstream products and services as one piece of evidence that IoT is real. It extends beyond home control and automation, of course, and wearables are the latest incarnation of the broad IoT trend. CES 2014 is littered with wristbands, headbands and other wearable technology products of various descriptions, many of which will no doubt fail commercially. Again, there is a strong sense that out of this emerging, fragmented primordial soup of innovation and ideas a few big winners will emerge in years to come. They may or may not include the smart mug (sic) displayed on Intel's booth, a porcelain coffee cup incorporating Intel's latest thumbnail-sized microprocessor.

Beyond consumer and B2C models, however, the impact of IoE will embrace industry and public services in general, and this is the foundation of Cisco's new strategy. John Chambers regards this year as one of his famous inflexion points where things come together and future concepts suddenly switch from excited chatter to real business decisions. According to Cisco IoE has moved rapidly in recent months to become central to board-level and high level government debates, and Cisco is doing its best to pull together multiple players in the ecosystem to persuade both industries and government bodies that the opportunity is real. It is targeting vertical industries but also the public sector, where Cisco's Joe Bradley discussed the opportunities and challenges in a round table with myself and other analysts. Bradley claims that Cisco has developed at least 40 use cases which show authorities how they can improve the way things are done and save money. One that was emphasised was improvements in how people find parking spaces using sensor networks, perhaps not the most exciting example but one which it is claimed could save many millions of dollars, euros or Yen.

However much Cisco focuses on these B2B strategies, and however much industries and governments start to take IoE seriously, it seems vital that the interests of the end user should not be forgotten. It's clear from this CES that there is a wealth of new connectivity-based experiences coming down the pipeline over the next few years, many of which will challenge traditional norms of behaviour as well as the way that traditional customer-supplier relationships work. Data security is clearly a critical element but in my view the biggest challenges will not be technical but social. The importance of Trust, not just for consumers but for everyone in the ecosystem, should never be forgotten as IoE creates  fundamentally new ways of going about business and government.

David Mercer

Client reading: Intel Sets Sail For Post-PC Era, But Don't Call It That


January 6, 2014 15:36 dmercer

One day in at CES and the key trends in TVs for 2014 are beginning to emerge. 4k was the expected one, and LG did not disappoint, announcing that they would offer 12 UHD models during 2014 from 49-105", including three UHD OLEDs. Panasonic announcements by comparison were rather flat, and the company seemed to be on the defensive after confirming its exit from the plasma business. Rather strangely

 it suggested that it's new 4k LED TVs would offer equivalent quality to plasma. Since plasma only ever offered 1080p this does not strike me as an example of progress.

The other broad trend of note is in user experience, where voice control and user recognition are becoming widely deployed. Panasonic's 2014 TVs will recognise users as they enter the room and learn viewer interests to make programme recommendations. 


It seems the TV manufacturers are anticipating potential threats from innovations like Xbox One and some of the more advanced pay TV services. They still face the challenge that most consumers access TV services through a secondary device like a set top box, so getting them to use the features built into the TV is always going to be a challenge.

David Mercer

January 6, 2014 15:36 dmercer

One day in and the key trends in TVs for 2014 are beginning to emerge. 4k was the expected one, and LG did not disappoint, announcing that they would offer 12 UHD models during 2014 from 49-105", including three UHD OLEDs. Panasonic announcements by comparison were rather flat, and the company seemed to be on the defensive after confirming its exit from the plasma business. Rather strangely

, it suggested that it's new 4k LED LED TVs would offer equivalent quality to plasma. Since plasma only ever offered 18th this does not strike me as an example of progress.


The other broad trend of note is in user experience, where voice control and user recognition are becoming widely deployed. Panasonic's 2014 TVs will recognise users as they enter the room and learn viewer interests to make programme recommendations. 

December 24, 2013 07:32 dmercer

If you want the definitive Strategy Analytics predictions on tablet and smartphone futures you should of course examine the forecasts from our respective industry experts. So the health warning comes up front: what follows is based on recent comments from my personal family and friends and may not bear any relation to what eventually happens in the market as a whole.

First, the teenage view on smartphones. This is not good news for Samsung. The word on the street is that there is significant dissatisfaction with Samsung’s recent devices, notably the S3 Mini, which have shown alarming tendencies to crash and require re-setting all too frequently. The good news, as far as Nokia and Microsoft are concerned, is that a teenage girl of my lifelong acquaintance started using a Nokia Lumia 720 for the first time a few weeks ago and simply loves it, finding it superior in nearly every way to the Samsung device she was using previously and, significantly, unconcerned with the supposed paucity of apps on the Windows platform.

Second, a friend a generation removed who has used Apple devices devotedly for a decade or more, was quoted as saying he would love to “get away from Apple”, citing the incompatibility of old and new versions of Numbers as an example of where the company has gone wrong. The one thing stopping him right now is iTunes and the impossibility of accessing his music from other platforms. I couldn’t help notice his interest in the availability of Samsung’s 7” Tab 3 at £89 from a major UK retailer.

All of which is just to say that today’s leaders cannot rest on their laurels, however strong their positions are today. It may seem like the Samsung v. Apple story will dominate all things smart for many years to come but the greater probability is that we are at the peak of this two-way mega-battle. Each company faces its own set of challenges and, however likely it may seem at the end of 2013, competitors are waiting in the wings to take their place as soon as the slightest opening appears.

I’ll be examining our new ConsumerMetrix survey data closely to see if any of these anecdotes are evident across the wider market. Best wishes in the meantime for a restful holiday.

David Mercer

July 22, 2013 08:53 dmercer

The “games console war” topic invariably attracts more attention from passionate supporters and opponents than most other media technology issues, so we are standing by to be flamed, even if we all get swamped by Royal Baby coverage, as we publish today the latest findings from our ConsumerMetrix survey of 6000 people across the US and Europe on the new generation of games consoles from Sony and Microsoft which is set to reach the market later this year.

The survey ran in June, shortly after Microsoft announced the name and details of its Xbox 360 replacement. Sony had announced its PS4 earlier in the year, so we should allow for the fact that it has had more time to build awareness. Nevertheless this is the first major consumer survey to assess the current standing of the two platforms.

Across our sample 14.2% of people said they were very or somewhat likely to buy a PS4 during the coming 12 months, compared to 9.5% who said they would buy an Xbox One. If these results were translated into actual sales performance that would represent a lead of nearly 50% for Sony over Microsoft. The PS4 led the Xbox One in each country in the survey: the US, France, Germany, Italy and the UK. Like all consumer surveys the results should be treated with some caution as an indication of actual future sales, but they do seem to reflect the consensus opinion after this year’s E3, where Sony’s performance was widely accepted as superior to Microsoft’s.

For reference the Wii U came in third place at 8.6%, which if anything is a more disturbing finding for Nintendo than the previous result is for Microsoft. Having led the previous generation by a wide margin with the original Wii, Nintendo still appears to be struggling to reignite the magic which helped it revive the company in the late 2000s.

Of course, everything is still to play for: Microsoft already made changes to its Xbox One strategy after E3 in response to multiple criticisms, and still has enough strategic firepower in its armoury to give the PS4 a run for its money. But Sony will be quietly encouraged at these findings and more than 20 years after entering the console business the Japanese firm will be hoping that the PS4 will propel the company back to the number one spot it used to call its own.

David Mercer