The Changing Face of What We Own
CTA recently published its 17th Annual Ownership and Market Potential Study full of incredible insights into the technology U.S. households own.
Device ownership among U.S. households is always in flux. At any given time, device ownership will be growing, declining or growing but at a declining (i.e. slowing) rate so that ownership rates are likely approaching an inflection point. Inflection points generally indicate lower ownership rates in the years to come. In the following, I’ll outline device categories that fall into each of these categories and discuss relevant market dynamics.
Consumers think about use cases, not devices. Many areas of ownership decline are driven by shifting patterns of use among households. DVD and Blu-ray players were collectively owned by some 94 percent of U.S. households in 2010 but household ownership rates have fallen to 77 percent in 2016. We’ve also witnessed a subtle decline in the average number of units per owning household—a classic sign that household ownership rates will decline further.
Smart TVs and digital media streaming devices have all seen sizable growth over the 2010–2016 time horizon. Given the expectation for continued growth for these categories and a decline in the sales of DVD and Blu-ray players, consumers’ shifting use patterns away from physical media devices show no signs of abating.
A continued shift in use patterns and growth in adjacent categories has also impacted other legacy product categories like digital cameras and camcorders. Eighty percent of households owned a digital camera in 2010 but today only 61 percent of households own a discrete digital camera. In 2010, about half of households owned a camcorder, but today only 27 percent report owning one. Clearly, the growth of smartphones, with their convenient photography capabilities, is evident here.
Loading Ownership Growth
Today, half of households report owning a connected TV—up from 43 percent last year and just three percent in 2011. One in three households also now own digital media streaming devices—up from eight percent in 2011.
Bluetooth audio saw a significant increase in reported ownership rates in 2016. U.S. household ownership rates for Bluetooth wireless over-the-ear headphones increased by nine percentage points in 2015 (to 37 percent of households) and ownership rates for portable Bluetooth wireless speakers increased 10 percentage points (to 35 percent of households). U.S. household ownership of soundbars is now 20 percent—up from just six percent in 2010.
New and nascent device categories are growing but still have relatively low ownership rates. These include fitness trackers, smart home devices, smartwatches, drones and smart thermostats. However, with a relatively high percentage of households reporting they plan to own these technologies in the coming years, these categories show strong signs of potential.
Slowing Ownership Growth
Now let’s look at categories that are growing, but at a declining rate. These are categories showing signs of what I’ll call “near-term saturation,” where ownership rates are likely stabilizing. As I’ve illustrated, use patterns shifting to technologies like smartphones has impacted numerous categories, like standalone digital cameras.
Smartphone household ownership has grown from 33 percent in 2010 to 74 percent this year. But it is up just two percentage points over last year. One of the things we tend to see with maturing categories is a higher percentage of non-owning households that plan to buy the technology in the next year compared to those that plan to ever own it. We also tend to see a very low share of first-time buyers among households that plan to buy the technology in the coming year. Both of these tendencies are evident in smartphone ownership.
A second slowing category is tablet computing. While ownership rates increased in 2016 by some five percentage points, household adoption growth is slowing and household density rates appear to have stabilized.
Shawn DuBravac, Ph.D., Chief Economist and Sr. Director of Research, Consumer Technology Association (CTA)™