Consumers feel perils of connectivity: Page 2 of 6

January 18, 2016 // By Junko Yoshida
Earlier this month, Nest’s smart thermostat reportedly stopped working, leaving many users frustrated and their homes freezing cold.
Between a rock and a hard place

The Accenture survey places the current consumer electronics industry between a rock and a hard place. The research indicates that “consumer demand is sluggish across a number of categories from smartphones to tablets and laptops. And unfortunately, demand for the next generation of devices enabled by the Internet of Things (IoT) is not growing fast enough to offset declines in traditional categories,” according to Accenture.

It’s important to note that today’s CE vendors can no longer depend on the growth of smartphones to pull themselves up. Supposedly a vast Chinese market isn’t going to help them, either.

Curran said, “the most sobering view of where we are today is captured by a sharp drop of the purchase intent of smartphones among Chinese respondents.” Globally, the purchase intent for smartphones is declining. Only 48% of consumers plan to buy a smartphone in the next 12 months. The drop is sharpest in China, down from 82 percent last year to 61 percent this year.

As for IoT devices, Curran said the good news is that those who faced problems in “connecting and using it decreased from 83 percent last year to 64 percent in 2015. The bad news is that still two out of three people are finding it “challenging” to use an IoT device, he said. “Sure, progress is being made, but still we face a lot of work.”

How do you inspire confidence?

Be it a health/wellness device, autonomous car or smart home thermostat, consumers, when using a new category of consumer products, generally worry about two things: loss of control [over the device], and lack of productivity.

Asked what connected device vendors could do to avoid creating consumer distrust, Curran simply said: “transparency.”

He explained that vendors, first, need to be able to articulate “what data is collected, why it is shared, what benefits consumers are going to get from it.” Communicate this in “clear declarations,” instead of in complicated legalese.

Second, “You should let consumers make a decision, so that consumers are back in control,” Curran said.

Third, “You should be talking about all those steps you are taking – for privacy and security.” Previously, vendors have been reluctant to engage in such conversations, he added. “That should help alleviate consumers’ concerns and inspire confidence.”

In the following pages, we share highlights of Accenture’s consumer technology survey.

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