One of the best things about the Connections Conference is the quantity and quality of primary research data presented by Parks Associates. Tricia Parks, Founder and CEO of Parks Associates, gave a speech titled, The Consumer Purchase Process – Evolution and Curved Roads, in which she provided an overview of some of their primary research regarding broadband customers.
The key takeaway is that broadband households are drivers of consumer electronics spending. US Broadband households, which represent 54% of the population, purchased 66 to 72% of all consumer electronics. 50% of the broadband households bought a PC in 2007. Another related driver is that households with kids spend more per year on consumer electronics ( $2,124 versus $1,734) as compared to households without kids.
Connecting the various devices that people are purchasing was the subject of a panel led by Rob Gelphman of the Multimedia over Coax Alliance [a Viodi View sponsor]. The home network, at least of the wireless version, is still not plug-and-play, as evidenced by the high return rates of between 18 to 20%. Less than 1% of these returns are for defective units, while most of the returns is incompatibility or difficulties with installation, according to Daniel Wong of D-Link. Self-install of networking devices are still a challenge for the average consumer as evidenced by the high return rates for these devices.
RyanTykwinski of Best Buy stated that the feedback from customers is that WiFi quality of service isn’t good enough. Further, 802.11g wasn’t a big improvement over 802.11a/b, so there is hesitancy among consumers to move to 802.11n. New customers don’t have a compelling reason to expand their wireless network. Notebook computers have been a driver for wireless, but Tywinski suggested that this segment is saturated and that new potential customers of wireless don’t have a compelling reason to upgrade.
At the same time, Daniel Wong of D-Link suggested that Powerline or MoCA solutions still haven’t come down enough in price at the consumer level to create a demand similar to wireless. Wong also mentioned that return rates for WiFi routers are between 18 to 20%, while less than 1% of these returns are for defective units. The problems tend to be with installation and incompatibility between devices.
Actiontec has taken an approach of working with Communication Service Providers, such as Verizon, Qwest and TDS, to promulgate MoCA technology inside their residential gateways. They clearly see the value-add in working closely with these operators to introduce technology to consumers, so as to reduce customer troubles.
Along these lines, one of the more interesting demonstrations at the show was a demonstration of a Smart Home concept using 4Home software integrated into one of their routers. From a PC or mobile web browser, it was possible to control lights, set alarms and remotely video monitor through multiple cameras, a real live home. The thing that was impressive about this home is that it is a 60 year old home, lived in by real people (more on this in a future issue). From a telco perspective, the smart home router could provide a relatively inexpensive way to upgrade a household from broadband to a smart broadband home.