Table of Contents
Executive Summary
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- Analyst perspective: Technology bridges the physical distance imposed by COVID-19
- Key takeaways
- Short-, medium- and longer-term impacts
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- Figure 1: Short-, medium- and longer-term impact of COVID-19 on technology hardware and digital services, May 2020
- Market performance and spending forecast
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- Figure 2: Consumer spending on technology – chart, by technology hardware and digital services, at current prices, 2010-25
- Segment performance: Technology hardware
- Segment performance: Digital services
Impact of COVID-19 on Consumers
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- COVID-19 concerns drive changes in behavior, increased reliance on technology
- Elevated stress is the norm, tech is part of the problem – and can be part of the solution
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- Figure 3: COVID-19 exposure and life disruption concern, March 4, 2020 – May 26, 2020
- Protective behaviors adopted during the short term will linger
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- Figure 4: COVID-19 lifestyle changes, March 4, 2020 – April 16, 2020
- Lessons from China: contact tracing may provide a solution for anxious consumers
- Mintel Trend Drivers
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- Figure 5: Mintel Trend Drivers
- Technology
- Wellbeing
- Experiences
- Rights
- Identity
- Value
- Surroundings
How a COVID-19 Recession Will Impact Technology
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- Market performance and spending forecast
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- Figure 6: Consumer spending on technology – chart, by technology hardware and digital services, at current prices, 2010-25
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- Figure 7: Consumer spending on technology – data table, by technology hardware and digital services, at current prices, 2010-25
- Surging unemployment will curtail discretionary spending
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- Figure 8: Monthly unemployment rate, December 2005-10 and March 2018-May 2020
- Downturn means spending decline for hardware, gains for services
- Replacement, innovation that meets new consumer needs underpin hardware spending during a downturn
- Looking back to predict what’s ahead
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- Figure 9: Consumer spending on select technology hardware, monthly, 2006-10
- Consumers unlikely to cut digital services budgets, even as they reduce spending in other categories
- Looking back to predict what’s ahead
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- Figure 10: Consumer spending on select digital services, monthly, 2006-10
- Expect ecommerce sales to continue accelerated growth trajectory
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- Figure 11: US ecommerce share of retail sales, 2009-April 2020
State of the Technology Hardware Market Before COVID-19
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- PCs, tablets, peripherals and software sales grow slowly, buoyed by software
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- Figure 12: Consumer spending on PCs, tablets, peripherals and software, annual, 2000-19 and Q1 2020
- Spending decline on video and audio equipment belies growth in volume sales
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- Figure 13: Consumer spending on video and audio equipment, annual, 2000-19 and Q1 2020
Impact of COVID-19 on the Technology Hardware Market
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- Figure 14: Short-, medium- and longer-term impact of COVID-19 on technology hardware, May 2020
- Meeting consumer needs in the short term
- Consumers work hard, play hard from home
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- Figure 15: Change in spending priorities due to COVID-19 – Technology and communications and Leisure/entertainment, April 16-May 26, 2020
- Short-term considerations
- Meeting consumer needs in the medium term
- Economic realities put pressure on consumers and technology hardware spending
- Medium-term considerations
- Meeting consumer needs in the longer term
- Innovation and fundamental shifts in behaviors as a result of COVID-19 will drive interests
- Temporary work-from-home situations have potential to become more permanent
- Microbial awareness could lead to cleaner consumers
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- Figure 16: PhoneSoap Facebook page, March and April 2020
- Wearable tech can shift from fitness to health
- Longer-term considerations
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Technology Hardware Market: Segment Performance
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- Home office – laptop, desktop and tablet computers, routers
- Increasing power and portability keeps laptops relevant
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- Figure 17: Laptop, desktop, tablet computer ownership and purchase intent, August 2019, February 2020
- Tablets have been a drag on unit sales growth – COVID-19 changes that in the short term
- Desktop PC market bifurcated: relegated to relic status vs elevated for niche interests
- Home entertainment – TVs, Blu-ray/DVD players, smart speakers, streaming media players
- High level of ownership for household entertainment devices will dampen need
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- Figure 18: Home entertainment electronics ownership and purchase intent, February 2020
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- Figure 19: UHD TV discount sale prices, Fry’s and Costco, April 2020
- Gaming consoles
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- Figure 20: Video game console ownership and purchase intent, August 2019 and February 2020
- Smartphones
- Pre-pandemic, longer purchase cycles sent smartphones on a downward trend
- Smartphones are essential, but current models are “good enough” to delay upgrades
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- Figure 21: Smartphone ownership and purchase intent, January 2019, August 2019 and March 2020
- Wearables
- Wearables have yet to reach widespread adoption; purchase intent shows promise
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- Figure 22: Wearables and wrist-worn wearable technology ownership and purchase intent, November 2019
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- Figure 23: TICWRIS-Smartwatch Facebook page, May 2020
- Figure 24: Oura-smart ring Facebook page, June 2020
- AR/VR adoption remains limited; COVID-19 to drive increased interest
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- Figure 25: AR/VR headset ownership and purchase intent, November 2019
State of the Digital Services Market Before COVID-19
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- Internet is essential
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- Figure 26: Consumer spending on internet services, annual, 2000-19 and Q1 2020
- Telecommunication services spending driven by cellular use
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- Figure 27: Consumer spending on telecommunication services, annual, 2000-19 and Q1 2020
- Video entertainment revenue grows, delivery methods evolve
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- Figure 28: Consumer spending on cable, satellite, other live TV; video/audio streaming and rental, annual, 2000-19 and Q1 2020
Impact of COVID-19 on the Digital Services Market
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- Figure 29: Short-, medium- and longer-term impact of COVID-19 on digital services, May 2020
- Meeting consumer needs in the short term
- Digital connection provides critical support during isolation
- Destinations turn to virtual visits to engage the public
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- Figure 30: Cincinnati Zoo & Botanical Garden ‘Home Safari Facebook Lives’ page, May 2020
- Short-term considerations
- Meeting consumer needs in the medium term
- Digital services will adapt to new social and economic landscape
- Medium-term considerations
- Meeting consumer needs in the longer term
- Role of digital services will continue to gain prominence in the longer term
- Longer-term considerations
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Digital Services Market: Segment Performance
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- Home internet and mobile service
- Internet even more critical during COVID-19 pandemic
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- Figure 31: Home internet source, July 2019
- Consumers won’t want to go back to data with limits
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- Figure 32: Attitudes toward mobile network plans – Data plans and speed, January 2020
- Social media
- Social media platforms face scrutiny about their role in sharing information
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- Figure 33: Top 5 ways to get the news, by age, May 2019
- Online gaming
- Digital distribution will be the new standard
- Streaming services
- Crowded market means streaming services will face consolidation in the longer term
- Free trials effective in the short term; longer-term success hinges on content quality
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- Figure 34: Streaming video behaviors, May 2020
- Communication apps – business and pleasure
- Virtual connections replace physical connections during COVID-19
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- Figure 35: Volume of mentions of #virtualhappyhour on social media by week, 2/2/2020 – 4/5/2020
- Figure 36: Growth of downloads of video conferencing apps (weekly average), March 15-21, 2020 vs Q4 2019
- Video conferencing services need to differentiate for longer-term success
- eCommerce
- Online shopping becoming increasingly normalized
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- Figure 37: Coronavirus behaviors and future activities, April 24-May 26 2020
- Mass store closures mean fewer options for in-person shopping
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer spending data
- Market data
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
- Abbreviations
- Terms
- Market performance and spending forecast data tables
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- Figure 38: Consumer spending on technology – data table, at current prices, indexed to 2010, 2020, 2025, 2010-25
- Figure 39: Consumer spending on technology – data table, by technology hardware and digital services, at current prices, 2000-25
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- Figure 40: Consumer spending on technology – data table, by technology hardware and digital services, at current prices, 2010-25
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