Abstract
Mintel' s Special Report Series are unique research findings that shed essential light on British attitudes, hopes, fears and desires.
By providing a comprehensive picture of the UK consumer, Mintel' s special reports generally make newsworthy material for the national press, television and radio. Every report provides a thorough analysis of specialist sectors, breaking down often-complex sectors into easy to understand sections - analysed thoroughly to present the marketing opportunities and weaknesses.
Titles in this prestigious series include British Lifestyles, Sponsorship, Health & Fitness, Holidays and Consumer Shopping Habits.
Table of Contents
- Issues in the Market
- Main issues
- Definition
- Abbreviations
- Market in Brief
- Convergence field wide open...
- ...but the race will be a long one...
- ...with broadband the engine for all success
- Barriers to take-up led by cost, complexity and quality...
- ...with lack of back-up yet to raise its head
- Convergence or connection?
- Digital divide shifting from age to affluence
- Convergence bundled through the back door
- PCs may stay in the background
- TV leads through position, not power
- Games consoles underachieving
- Smart choices in the mobile sector
- Insights and Opportunities
- Compatibility, not competition
- Give remotes the simple touch
- Consoles need to hit the ' new game' button
- Don' t forget the home phone
- Internal Market Environment
- Key points
- Access to technology
- Figure 1: Availability of digital communications services, 2005 and 2006
- Britons spoiled for platform choice
- Take-up of technology
- Figure 2: Computer, Internet and broadband take-up, 2002-06
- Mobile gets head start in convergence stakes...
- ...but broadband set to put TV and PC back in the race
- Satellite v Freeview
- Barriers to use
- Risk of online traffic jams
- Figure 3: Estimated bandwidth requirements, by application
- Complexity of use
- The consumption environment
- Limited (battery) life-expectancy
- Technology issues
- Broadband connection speeds
- Internet capacity
- Spectrum access
- Next-generation Networks
- Wi-Fi and WiMAX
- Faster speeds, even wider coverage
- Service bundling
- Regulation and legislation
- Unbundling leads to bundling
- Broadening the spectrum for convergence
- Fights over rights?
- Price and competition
- Usage caps
- Broader Market Environment
- Key points
- Demographic trends
- Bridging the digital divide
- Figure 4: Trends in the age structure of the UK population, by gender, 2002-12
- Approaching a third aged 55+
- DTT an important technology for convergence among older groups
- Converging upmarket
- Figure 5: Forecast adult population trends, by socio-economic group, 2002-12
- Convergence flies the nest...
- Figure 6: Forecast adult population trends, by lifestage, 2002-12
- ...but smaller homes require fewer devices
- Figure 7: UK households and one-person households, 2002-12
- Economic climate
- Consumers have cash to spend on converged devices
- Figure 8: Trends in personal disposable income and consumer expenditure, 2002-12
- Lack of interest
- Consumer mobility
- Strengths and Weaknesses in the Market
- Strengths
- A connected country
- Development of wireless technologies
- Service bundling
- Growing technological awareness
- Strong consumer electronics market
- Weaknesses
- Vulnerability to technical failure
- Consumer caution
- Concerns over performance and complexity
- Digital divides
- Digital rights management
- PCs/the Internet
- Strengths
- Weaknesses
- Interactive television
- Strengths
- Weaknesses
- Games consoles
- Strengths
- Weaknesses
- Mobile phones
- Strengths
- Weaknesses
- Case Studies
- IPTV: Joost
- Track record and funding create a potential pace-setter
- Open access by year-end
- Demographic targeting of adverts
- A window on the TV world?
- Interactive television: Sky Active
- A video magazine
- An alternative model of convergence -- revenue convergence
- Games console: Xbox 360
- Connected hub or converged device?
- Re-inventing the walled garden
- Xbox versus Apple TV?
- Mobile phone: Nokia N95
- First sighting of GPS
- Web browsing and email
- Sound on vision...
- ...but mobile' s memory and life limits remain issues to resolve
- PCs and the Internet
- Key points
- The recent past
- OK computer -- consumers get with the program
- Figure 9: Computer, Internet and broadband take-up, 2002-06
- Internet age created the possibility of convergence...
- ...but broadband made it reality
- Escape from the bedroom
- Figure 10: Market size and forecast of the laptop market, by volume, 2001-11
- The present
- Download trends add video to audio
- Challenging the console: episode one
- Changing focus: from distribution to communication
- The future
- Broadband access to widen further...
- ...and sit at the heart of convergence -- on all devices
- Challenging the console: episode two
- Where next: Centre stage or behind the scenes?
- PCs and the Internet: the consumer
- Figure 11: PC ownership, June 2007
- No substitute for Internet access
- Consumers dislike being chained to their desk(top)
- Activities done through PCs
- Figure 12: Activities done through PC in the last 12 months, June 2007
- Not all Internet users are early adopters
- Some functions fit together better than others
- Future convergence: a two-way street?
- Figure 13: Activities done through PC in the last 12 months, by PC ownership, June 2007
- Laptops lead in convergence stakes
- Activities done through PCs by demographic analysis
- Figure 14: Activities done through PC in the last 12 months, by gender, age, region, socio-economic group, daily and Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage and mobile provider, June 2007
- PCs not doin' it for the kids
- Do women want divergence, not convergence?
- Broadsheet brands
- Older children hold their parents' hands
- Interactive TV
- Key points
- The recent past
- Rise of the red button
- Figure 15: Digital television penetration, October-December 2006
- Penetration driven by choice, not necessity
- Freeview growth shows price is still an issue
- New sets for new services
- The present
- iTV reaching those on the wrong side of the digital divide
- Some services more interactive than others
- iTV convergence centres on the living room
- Figure 16: UK television reception, by platform, October-December 2006
- The future
- Increased interactivity for DTT
- Putting the TV in IPTV
- Converge or die?
- Interactive TV: the consumer
- Figure 17: TV reception at home, June 2007
- Strong links between Internet and multichannel TV...
- ...and particularly cable
- Interactive activities done through the TV
- Figure 18: Interactive activities done through TV in the last 12 months, June 2007
- TV-based interactivity more ' passive' than ' active'
- New services gaining popularity
- Interactive activities by TV reception
- Figure 19: Interactive activities done through TV in the last 12 months, by TV reception at home, June 2007
- Cable viewers look most receptive to online convergence
- Most popular interactive activities through TV by demographic analysis
- Figure 20: Most popular interactive activities done through TV in the last 12 months, by gender, age, region, socio-economic group, daily and Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage and mobile provider, June 2007
- Next most popular interactive activities through TV by demographic analysis
- Figure 21: Next most popular interactive activities done through TV in the last 12 months, by gender, age, region, socio-economic group, daily and Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage and mobile provider, June 2007
- iTV can bring convergence to women...
- ...but not so much to the young
- Games Consoles
- Key points
- The recent past
- Expanding the field of play
- Consoles wield convergence clout
- The present
- Convergence now
- Unfulfilled potential
- Figure 22: Interactive activities done through games console, September 2006
- Price as important as capabilities
- The future
- More walled gardens?
- Static games consoles: the consumer
- Figure 23: Games console ownership and purchasing intentions, June 2007
- Focus on pure gamers obscures convergence potential
- Can Wii fix it? Maybe Wii can
- Premature ageing a problem for the sector
- Most important static console features
- Figure 24: Most important static console features, by platform, June 2007
- Little convergence interest among the current console crowd...
- ...but newcomers are even less convergence-aware
- Handheld games consoles: the consumer
- Figure 25: Handheld games console ownership, June 2007
- Handhelds more popular than statics
- More positive picture for PSP
- Super Mario Brothers to the rescue?
- Handheld console features
- Figure 26: Most important handheld console features, by platform, June 2007
- Music, video and gaming already converged -- and popular
- PSP for individuals, DS for communities?
- Mobile Phones
- Key points
- The recent past
- Market reaches saturation point
- UK goes 3G
- Operators cannot hold for call revenues
- Figure 27: UK mobile phone market, 2005 and 2006
- Demand for data gathering pace
- Figure 28: UK mobile phone revenue segmentation, 2001-05
- The present
- Internet goes mobile...
- ...as does TV...
- ...but relevance and cost remain barriers to growth
- The future
- Falling prices to boost data traffic
- 3G or not 3G?
- Convergence between the phone and PDA?
- Mobile phones: the consumer
- Figure 29: Activities done through mobile phone, June 2006
- Main functions widely used...
- ...but mobile users concerned about cost...
- ...and security
- Most popular activities done through mobile phones
- Figure 30: Most popular activities done through mobile phone, by gender, age, socio-economic group, region, daily and Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage and mobile provider, June 2006
- Next most popular activities done through mobile phones
- Figure 31: Next most popular activities done through mobile phone, by gender, age, socio-economic group, region, daily and Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage and mobile provider, June 2006
- Two types of mobile convergence -- business and pleasure
- Mobile convergence available to all...
- ...and on all networks
- The Consumer: Enthusiasm for New Technology
- Key points
- Type of technology buyer
- Figure 32: Type of technology buyer, June 2007
- Convergence set to be a slow sell
- Type of technology buyer by demographic analysis
- Figure 33: Type of technology buyer, by gender, age, region, socio-economic group, daily and Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage and mobile provider, June 2007
- Early adopters: young, male, affluent
- Replacers: older, female and skint
- Type of technology buyer by technology ownership
- Figure 34: Technology ownership, by type of technology buyer, June 2007
- Satellite today, Freeview tomorrow
- Early Adopters stand back in static console market
- Smart money on the smartphone
- Type of technology buyer by interactive activities done on TV
- Figure 35: Interactive activities done through TV in the last 12 months, by type of technology buyer, June 2007
- Type of technology buyer by activities done through TV
- Figure 36: Activities done through PC in the last 12 months, by type of technology buyer, June 2007
- Type of technology buyer by activities done through mobile phones
- Figure 37: Activities done through mobile phone, by type of technology buyer, June 2006
- The Consumer: In-home Convergence
- Key points
- Attitudes towards in-home technology
- Figure 38: Attitudes towards in-home technology, June 2007
- Benefits of convergence already understood
- Biggest barrier to take-up is not an insurmountable one...
- ...although consumer jury is still out on IPTV quality
- Targeting opportunities
- PC/Online Convergers
- Console Convergers
- Frustrateds
- Non-Convergers
- Target groups by demographic analysis
- Figure 39: In-home technology target groups, by gender, age, socio-economic group, region, daily and Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage and mobile provider, June 2007
- PC man is gadget fan
- Consoles strong on value
- Young not immune to frustrations of technology
- Non-Convergers older and mid-market
- Attitudes towards in-home technology by type of technology buyer
- Figure 40: Attitudes towards in-home technology, by type of technology buyer, June 2007
- Early adopters set convergence pace...
- ...with the Cautious and Replacers still waiting for results
- The Consumer: Mobile Convergence
- Key points
- Attitudes towards portable technology
- Figure 41: Attitudes towards portable technology, June 2007
- Significant resistance towards mobile convergence...
- ...with technical issues to the fore
- A solid core are pro-convergence...
- ...but non-core functions do not determine purchasing patterns
- Targeting opportunities
- Convergers
- Frustrateds
- Non-Convergers
- Portable technology target groups by demographic analysis
- Figure 42: Portable technology target groups, by gender, age, socio-economic group, region, daily and Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage and mobile provider, June 2007
- Affordability drives mobility
- Frustrated by static standards
- Non-Convergers worth pursuing
- Attitudes towards portable technology by type of technology buyer
- Figure 43: Attitudes towards portable technology, by type of technology buyer, June 2007
- Forecast of Consumer Demand for Converging Technologies
- Figure 44: Share of technology buyers, 2007
- Figure 45: Convergence in-home and/or mobile within buyers' profiles, 2007
- Nearly 100,000 ready for converging products in 2008
- Figure 46: Forecast of purchasers of converging technology, 2007
