It seemed like everything was going so well. Holiday mall traffic was said to be brisk, consumer sentiment seemed to be thawing a bit, even the unemployment numbers made a U-turn just before critical mass and started heading nicely downward. Then came reports of exceptions to the general rule of an improving U.S. consumer economy in Q4 2011, most notably from big-box retailer Best Buy, which reported lower same-store unit sales for the quarter and flat revenue.
So what happened; did a piece of the sky fall and someone forget to blog about it? Some clues came this morning from analyst firm NPD Group, which reported a 6% overall drop in holiday consumer electronics sales compared to the same period in 2010. Sales were sharply lower for MP3 players, digital picture frames, point-and-shoot… whoa, whoa, wait a second! MP3 players? What decade are we talking about again?
A 20.5% decline in MP3 player sales in the period from from November 20 to December 24, versus the same period in 2010, was one contributing factor to NPD’s sales decline figure. Add to that a 32.6% decline in stand-alone GPS device sales, a 42.5% decline in camcorder sales, and a 20.8% decline in point-and-shoot camera sales should be an indicator of something.
You’d think it would be on the tip of everyone’s tongue. Tongue, tongue… maybe something else starting with “t?” Nope. The message this morning was doom and gloom in advance of the first official (public) day of CES 2012 festivities. Desperately trying to recover from the agony of a gospel choir failing to lift the spirits of the last Microsoft keynote, attendees awoke this morning to TV reports that the holidays were actually a bust for retailers.
Hidden in the one place where no one reading Web articles looks any more (the first paragraph) was this bit of information from the NPD report: Its sales figures tracked only PCs and certain discrete CE items, and excluded two components which the firm tracks separately: smartphones, tablets, e-readers, and video games.
The four components of the CE economy which, by all accounts thus far, performed extremely well over the last quarter.
So, did tablet and smartphone sales end up cannibalizing desktop and notebook PC sales? Here’s where you would think someone would have spotted the good news, as articulated by NPD’s vice president of industry analysis, Stephen Baker: Revenue from both PCs and TVs outpaced the rest of the market. It’s these stand-alone, discrete-function devices that people just aren’t buying any more. “The accelerated rate of decline in older technology categories such as DVD, GPS, and MP3 players put a ceiling on how well the industry could perform during the holiday,” said Baker.
Um… yea. That makes perfect sense, doesn’t it? So any retailer that experienced a downturn over the holidays probably had too much invested in these discrete-function devices. With one exception: Hard disk drive sales dropped 25.1% annually in the sample period. Of course, that was due to the global hard drive shortage and subsequent price spike, on account of the Thailand floods knocking out manufacturers.
So why doesn’t NPD discontinue tracking CE market segments that have already atrophied? Baker and his colleagues are at CES as we speak, and were unable to provide comment by press time, though his statement this morning does speak to this question somewhat: “Many newer technologies posted strong gains, although most of those products, such as streaming devices, still generate volumes too small to impact the overall market trend. These newer technologies are likely to be the ones to watch in 2012 as the industry continues to search for high growth opportunities to replace aging product segments.”
Research firm Gartner has come out with its third quarter global mobile sales numbers and overall, the industry grew 5.6% from the same period last year. About 440.5 million cellphones were sold, with 115 million of those being of the smart variety, a 42% growth rate from Q3 2010 but only 7% growth from Q2 2011. The feature phone market is being buoyed by emerging markets while most of the smartphone growth was in Russia and China. Many other markets have stalled in smartphone growth.
Gartner says the slowdown of smartphone growth in markets such as the United States and Western Europe was due to consumers waiting for flagship devices to be released, such as the newest iPhone, the Samsung Galaxy Nexus and the HTC Rezound. Nokia is still No. 1 in the world in overall sales while another study shows that the best selling single devices in the U.S. are Apple’s variety of iPhones.
iPhone Tops U.S. Wishlist
A study done by The NPD Group released yesterday showed that in the U.S. market favors older devices that have fallen in price. The best selling smartphones in Q3 2011 in the U.S. were, in order: iPhone 4, iPhone 3GS, HTC Evo 4G, Motorola Droid 3, Samsung Intensity II.
This matches well with the global Gartner numbers. Three out of the five phones on that list are Android even though many individual users may prefer the iPhone. Overall, Android crushed the rest of the market in sales to end users, with 52.5% of all smartphones sold in Q3. Apple sales fell to 17.295 million, well of projections but most people that wanted to upgrade to a new iPhone were waiting for the supposed iPhone 5 before the iPhone 4S was announced. As we reported in October, 4S sales are breaking Apple’s records so watch out for a big jump by Apple in Q4 results.
Apple may jump a lot more than even the analysts think when the Q4 numbers come out. Android has beaten Apple across the world by having devices on the shelves of every carrier across the world at price points and styles that appeal to just about everyone. Apple’s iPhone line has now reached a critical mass where it can do the same thing with the 3GS now free under a two-year contract, the iPhone 4 at $99 and the 4S at $199. Add an extra carrier to the U.S. mix for the 4S and, finally, Apple has a channel strategy that can compete with Android. Consumer probably would have preferred to new phones (say, a 4S and a 5), but ultimately they are not that picky and will just grab whatever iPhone fits their price structure.
Nokia Holding To Spot, Holds Off Samsung … For Now
Nokia held the top spot among global OEMs at 23.9% of the market, ahead of Samsung at 17.8%. Nokia’s top spot is still based on its line of feature phones in emerging markets. Symbian, its sort-of smart platform, has fallen precipitously in the last year with nearly 10 million less sales than the same quarter in 2010. See the chart below.
Samsung is the top smartphone vendor in the world with 24 million devices sold, thanks mostly to the Galaxy series. Samsung overtakes Nokia for the first time in smartphone sales though, as we have noted with the Windows Phone 7 coming to the U.S., Nokia has some ideas up its sleeves as well.
So, what do users want? They want smartphones at good prices available where they are. That is what Android has shown us and what Apple will see the benefits of later this year.
Why did you buy your smartphone? Did you want the operating system, like and iPhone or and Android? Or did price push your decision? Availability? Let us know in the comments.
It’s an argument that the music industry likes to make: go after P2P file-sharing sites, sue them, shut them down, and as a result we’ll have less music piracy. But is that really the case?
According to a study released today by the market research company NPD Group, a market research group, it is. The company contends that since a federal judge ordered that the peer-to-peer site Limewire shut its doors in the fall of last year, that the peer-to-peer filesharing of music – both the number of files downloaded and the number of users of the P2P sites – has declined.
The NPD reports that the percentage of Internet users in the U.S. that are using P2P services for music has fallen from a high of 16% in the fourth quarter of 2007 to just 9% in the fourth quarter of 2010. The average number of files downloaded declined from 35 tracks per person to 18 tracks per person over the same time period. There are now roughly 16 million P2P users downloading music, 12 million fewer than in 2007.
“LimeWire was so popular for music file trading, and for so long, that its closure has had a powerful and immediate effect on the number of people downloading music files from peer-to-peer services and curtailed the amount being swapped,” says Russ Crupnick, NPD’s entertainment industry analyst.
While the NPD statistics make the actions against LimeWire seem like a win for the music industry, but it’s worth scrutinizing the argument closely. LimeWire was used by about 56% of those using P2P services, NPD reports, but that doesn’t mean that those users simply stopped file-sharing. After all, while Limewire was shuttered, other P2P sites reported an increased usage.
Furthermore, over that same time period studied in the report – from 2007 to 2010 – a number of new options have become available for Internet users to get their music. Streaming and subscription services like Spotify and Pandora have changed the way that music is consumed online.
The NPD study was gathered from self-reported data, which also makes its findings a little difficult to say much about. But no matter the origin of the data here, it’s a bit of a stretch to contend that LimeWire’s closure means less piracy. Less file-sharing? Maybe. Less piracy? I’m not sure. Regardless of the accuracy, it’s likely we’ll see these statistics invoked by those that argue that going after P2P websites is a good move for the music industry.
The U.S. Environmental Protection Agency (EPA) on Wednesday announced an upgrade to its Energy Star requirements for televisions, and cable and satellite boxes. According to a press statement from the agency: Effective in September 2011, these products must be 40 percent more efficient than conventional models in order to win the Energy Star label. Energy Star expects to update 20-some other product requirements this year.
Manufacturers of TVs, cable and satellite boxes in the U.S. don’t have to comply with the new Energy Star standards — unless they want their products to be eligible for rebates, like those highlighted by regional availability on GreenOhm.com and a number of government websites run by states with rebate programs.
Television manufacturers do have to label their sets with information about how much energy they consume annually, and how that compares to a range of similar models, under the Federal Trade Commission’s Appliance Labeling Rule that takes effect on May 10, 2011.
According to market research by In-Stat (recently acquired by The NPD Group), set-top box shipments in North America slowed in 2010, and the trend is likely to continue this year. The NPD Group reported, however, that 2011 holiday sales of television sets, in particular:
“The 46-47-inch flat-panel TV segment was the fastest-growing for the holiday, increasing 31 percent in units. Sales of TVs above 50 inches also showed strong growth with volume jumping 21 percent propelled by exciting new technologies such as 3D, Internet connectivity, and LED backlighting.”
The FTC is still considering energy-related labeling requirements for manufacturers of personal computers, cable or satellite set-top boxes, stand-alone digital video recorders, and personal computer monitors .
Image: 1950s era television set, via John Atherton
By now many of you may have heard about the massive blizzard that is hitting the Northeast region of the United States over the next few days, bringing as much as two feet of snow to some areas. This, of course, is bad news for brick and mortar retailers, who have been advertising after-Christmas sales for some time now. The post-holiday shopping period has become as popular for massive discounts and sales for both online retailers and in-stores, similar to the period after Thanksgiving. The NPD Group’s retail analyst Marshal Cohen said today that it will take two to three weeks longer for retailers to recover from the loss of sales thanks to the snowstorm. He adds that with next weekend marking New Year’s day, more consumers are likely to be distracted from in-store shopping, also possibly causing a loss in sales.
The silver lining to all of this is that online retailers could see a significant boost in sales thanks to the snowstorm. Home-bound consumers who are still looking for post-holiday deals can access them on retailers online sites or on e-commerce platforms like Amazon or eBay.
And blizzard conditions have proven to help online retailers boost sales. Last year, a snowstorm hit the East Coast of the United States the weekend prior to Christmas (which is always a busy weekend for brick and mortar stores), and online retailers saw a 13 percent boost in sales during that time period.
Of course, consumers who are looking to return items will be forced wait until the snow clears.
Online retailers have seen fairly strong results this holiday shopping season, with total sales up 12 percent to over $28 billion so far. Total sales for the full holiday season are expected to reach $32.4 billion this year, up 11 percent, but this number could be buoyed by snowed in consumers looking to find deals this week.
You don’t need to wait for Google or Apple to bring apps to your HDTV. Samsung’s been serving up custom-made apps via their connected HDTVs for some time now and just hit the 1 millionth downloaded app. That’s a mighty fine milestone for a platform not heavily discussed or marketed. Impressive, yes, but even so that this mark was hit with only 200 available apps, which seems to state that Samsung knows how to curate and approve quality applications. They seem to have all the big ones: Netflix, Hulu Plus, Twitter, Pandora, Blockbuster, Vudu. There’s even a fine selection of low-cost games although that doesn’t include Angry Birds.
Samsung introduced the connected TV back in 2007, but the apps didn’t debut until CES 2010. Before these apps, on-screen widgets were all the rage, but their functionality was limited along with the selection of apps. Within the last few years Samsung has always been at the top of the sales charts for flat panels, but the company is dominating the web-connected segment with a 66% marketshare according to NPD Group. That’s beating out everyone from Vizio, Sony, and Panasonic with these Samsung Apps estimated to be on 50% the company’s TVs sold in 2010.
So what about that Google TV rumor? Something about Samsung introducing a Google TV-powered HDTV at CES 2011? Possible?
It sounded strange weeks ago when the rumor first appeared and it possible sounds even more out of place after learning about this milestone. Samsung, as stated above, already has a significant chunk of the connected TV marketshare and soon their supposed to launch what amounts to a competing series? It just doesn’t sound right, but it’s still possible. Sony did just that.
Sony also has a line of app-ified HDTVs, but that didn’t stop them from bringing Google TV — without Sony’s app ecosystem — to two separate product lines. The HDTV and Blu-ray player are both heavily marketed, even more though than Sony’s standard line it seems. The Samsung model would likely compete, not with its Samsung brethren, but with the Sony Google TV instead.
Either way, both companies have their own Internet-connected HDTVs to fall back on if the Google TV venture doesn’t get out of first gear. Samsung, it seems, is already racing forward without any help from Google TV.