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Saturday, July 02, 2005

The Emerging Digital Consumer Technology Trends

We recently covered Rich Karlgaard's views technology products now enter the market differently from the past. It used to be that the coolest products (i.e., the most expensive) were those sold to businesses or to rich people who could afford them. Copiers, personal computers and cell phones entered the market that way. It would then take a few years for unit volume to kick up and prices to fall. Eventually the masses could afford to buy these products. But now the coolest products are being aimed at the masses from the get-go--iPods, DVDs and gigabyte memory sticks, not to mention terabytes of Google-accessible free content. Even software is following this trend. A generation ago the Sabre airline-seat yield management system, written for a few dozen carriers, was the neatest trick in the travel industry. Now it's Orbitz, aimed at billions of consumers. Google saves tens of millions of dollars by using cheap.consumer-class servers-more than 100,000 of them, actually-to power its search algorithm.

A recently released forrester research report sees paaterns of success in consumer technologies -encapsulated these insights into three rules. To determine if a new technology will succeed, shows:
1.Lower costs and immediate benefits win - At $1,000 in 1997, a DVD player wasn't worth the benefit for most consumers. In 2005 at $100 or less, it's well worth it. Even at $5,000, an insulin pump that frees diabetics from the needle is well worth the effort. But benefits must be immediate. Short-term benefits sell eg - wireless home networking, Long-term benefits - like the abstract lure of a "digital home" - rarely attract consumer investments.
2. Extensions of existing behaviors wins - An iPod creates new flexibility in music listening, but it builds on existing behaviors like storing digital music on PCs and mobile music listening. TiVo takes television viewing and adds time-shifting. Home automation using a computer to manage functions like home security and lighting hasn't caught on with the mainstream as it puts the home computer in an unnatural position
3.Technology that requires technical prowess out of proportion to its benefit never catches on.
My Take: Good insights - we are actually witnessing massive shifts in tastes, expectations and real urge to have things usable immediately and at an affordable price - gone are the days to wait for seasonal sale periods for lifestyle purchases and also gone are buying the next version products - with changes happening on multiple fronts - choices are plenty in front of the customer.
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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
"All views expressed are my personal views are not related in any way to my employer"