Table of Contents
Executive Summary
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- Impact of COVID-19 on technology
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- Figure 1: Short-, medium- and long-term impact of COVID-19 on Technology category, April 2020
- The market
- Positive year for the technology sector despite early shocks to shipments and consumer confidence
- Service providers see continued slowdown in revenues despite increased importance in pandemic
- Bundles suffer due to falling prominence of fixed and mobile voice
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- Figure 2: Market size and forecast for technology service providers, 2015-25
- Spending on digital goods and services soared to new highs in 2020
- Gaming enjoys a strong year on back of robust console sales
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- Figure 3: Market size and forecast for digital goods, 2015-25
- New gaming console releases demand outstrips supply
- Disruption in chip manufacture also set to put a dent in the market
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- Figure 4: Market size and forecast for technology hardware, 2015-25
- The consumer
- One in five bought a smartphone during the pandemic
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- Figure 5: Technology devices bought since COVID-19, April 2021
- Technology enabled modification of behaviours during COVID-19
- 2020 was the year of the video call
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- Figure 6: Technology activities undertaken since COVID-19, March 2021
- Spike in sales of home office essentials triggered by new stay-at-home routines
- At-home lifestyles drive wireless headset purchasing
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- Figure 7: Technology purchasing habits pre and post-COVID-19 March 2021
- COVID-19’s legacy will be more interaction with health and wellness technology
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- Figure 8: Interest in future use of technology apps, services and devices, March 2021
Category Winners and Losers
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- Software and digital services played a significant role during the pandemic
- Gaming consoles saw dramatic increase powered by flagship console releases
- Spike in sales of devices to aid working from home routines
- Wearable tech and online fitness services benefit as gyms shut
- Voice controllers benefit from stay at home routines
- Digital payments and QR codes beneficiaries of a non-tactile world
- Smartphone market suffers slowdown due to closed retail opportunities
- Mobile network providers also see drop-off in revenue
- Despite reliance on broadband during pandemic bundled communication providers did not see much benefit
How The Pandemic Unfolded
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- Phase 1 – January-March: Consumers go into lockdown
- Phase 2 – March-June: Adapting to life in lockdown
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- Figure 9: Recorded daily number of confirmed cases of COVID-19 and deaths registered as relating to the virus, 31 December-5 November 2020
- Phase 3: Emerging from the initial lockdown
- Phase 4: Rise of the next wave
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- Figure 10: Recorded daily number of confirmed cases of COVID-19, 30 January 2020-28 March 2021
- Phase 5: January-March – Winter lockdown and vaccine rollout
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- Figure 11: Cumulative number of first and second vaccines delivered in the UK, 10 January-9 May 2021
- Phase 6: March onwards – The Roadmap out of lockdown
The Post Pandemic Outlook for Technology
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- Ongoing supply chain issues will hamper technology market’s recovery
- Apple’s rebound in 2021 shows signs of pent-up demand being realised
- PC and laptop market can remain buoyant on the back of strong finish to 2020
- TVs have a timely opportunity for boosting sales
- Niche technologies can see greater prominence in a post-pandemic world
- Online learning and EdTech can see further growth
- Increase in pet ownership during pandemic can create valuable opportunities for pet tech
- COVID-19 can help propel more streamlined and mindful use of technology
- Relaxation of restrictions on real world activities could see tech take a back seat
The Economic Impact
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- A record drop in economic activity…
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- Figure 12: Annual percentage change in GDP, 2007-25 (fore)
- …as COVID-19 restrictions caused a severe fall in spending
- Consumer spending is heavily dependent on the path of the pandemic
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- Figure 13: Household consumption index, 2019-25 (scenario forecasts)
- Furloughs have saved millions of jobs…
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- Figure 14: Number of employments furloughed, time series, March 2020-February 2021
- …but unemployment is forecast to rise when state support ends
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- Figure 15: Quarterly unemployment rate, Q1 2008-Q1 2026 (fore)
- Under-25s have taken the brunt of COVID-19 job losses
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- Figure 16: Change in number of employees on payroll, by age, February 2021 vs February 2020
Market Size and Performance
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- Effect of COVID-19 on the technology sector
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- Figure 17: Short-, medium- and long-term impact of COVID-19 on Technology category, April 2020
- Positive year for the technology sector despite early shocks to shipments and consumer confidence
- As the pandemic wore on, returning consumer confidence helped technology sector rebuild
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- Figure 18: Market value of technology hardware, 2015-25
- Figure 19: Market value of digital goods, 2015-25
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- Figure 20: Market value of technology service providers, 2015-25
Market Forecast
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- Service providers see continued slowdown in revenues despite increased importance in pandemic
- 5G’s slow burn may mean chances of growth inhibited
- Despite greater reliance on broadband, revenues were likely flat during 2020
- Bundles suffer due to falling prominence of fixed and mobile voice
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- Figure 21: Market size and forecast for technology service providers, 2015-25
- Spending on digital goods and services soared to new highs in 2020
- Gaming enjoys a strong year on back of robust console sales
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- Figure 22: Market size and forecast for digital goods, 2015-25
- Hardware sales remained resilient despite stock shortages and store closures
- New gaming console releases - demand outstrips supply
- Disruption in chip manufacture also set to put a dent in the market
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- Figure 23: Market size and forecast for technology hardware, 2015-25
COVID-19 Scenario Performance
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- Mintel’s approach to predicting the impact of COVID-19
- Fundamental differences in how COVID-19 is affecting consumer markets
- The risk of vaccine-resistant strains of COVID-19 adds huge uncertainty
- COVID’s trajectory unlikely to have a great effect on market value of technology service providers
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- Figure 24: COVID-19 scenario forecast for technology service providers, 2015-25
- Prolonged COVID disruption could see digital goods’ prominence continue
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- Figure 25: COVID-19 scenario forecast for digital goods, 2015-25
- Rapid COVID recovery could foster a tech sales spike
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- Figure 26: COVID-19 scenario forecast for hardware, 2015-25
- COVID-19 market disruption: risks and outcomes
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- Figure 27: Summary of Mintel scenario expectations and the impact on the consumer technology market, March 2021
Consumer Concerns over the Impact on Health
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- Exposure anxieties align with case numbers
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- Figure 28: Mintel COVID-19 exposure anxiety and lifestyle impact index, 28 February 2020-26 March 2021
- Exposure anxiety typically higher among over-55s
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- Figure 29: Proportion of adults indicating higher levels of anxiety (‘4’ or ‘5’) towards being exposed to the coronavirus, by age, 28 February 2020-26 March 2021
- Middle-age band fear transmitting virus
Consumer Concerns over the Impact on Lifestyles
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- Concerns about lifestyles impact outweigh exposure fears
- Consumers react to unprecedented lifestyle restrictions
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- Figure 30: Mintel COVID-19 exposure anxiety and lifestyle impact index, 28 February 2020-12 March 2021
- Lifestyle impacts concerns high across all age groups
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- Figure 31: Proportion of adults indicating higher levels of anxiety (‘4’ or ‘5’) about how the outbreak could impact their lifestyle, by age, 28 February 2020-26 March 2021
Impact on Household Finances
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- Financial wellbeing has hit new heights despite the crisis…
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- Figure 32: The financial wellbeing index, January 2015- March 2021
- …but many still feel worse off than a year ago
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- Figure 33: Changes in household finances, January 2015- March 2021
- One in six have been furloughed at least once
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- Figure 34: Impact of COVID-19 on employment and working patterns, February 2021
- Income trends point to a two-track crisis and recovery
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- Figure 35: Impact of COVID-19 on personal income, February 2021
- Cuts to discretionary spending have kept household finances afloat…
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- Figure 36: Impact of COVID-19 on household debts and spending, February 2021
- …and led to a record savings boost
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- Figure 37: Impact of COVID-19 on the value of savings in different products, February 2021
- Most are optimistic about the year ahead…
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- Figure 38: The financial confidence index, January 2015-March 2021
- …and looking forward to getting back to experiences
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- Figure 39: Financial priorities when COVID-19 is no longer a concern, February 2021
- As pandemic’s threat subsides, intention to spend on technology stays stable
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- Figure 40: Spending intentions compared to the start of the outbreak, technology and communications,
How the Pandemic Shaped Consumer Behaviour
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- One in five bought a smartphone during the pandemic
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- Figure 41: Technology devices bought since COVID-19, April 2021
- New smartphone purchasing down on previous years in 2020 though overall demographic penetration up
- Games consoles and TVs could see further sales boost in 2021
- Next generation consoles can drive 4K TV sales
- A marquee year of delayed sporting action can be another boost to the TV market
- Summer of sport can be a driver of TV upgrades
- Consumers’ financial situations can be a springboard for big tech purchases
- Technology-enabled modification of behaviours during COVID-19
- Smartphones’ ubiquity meant it was a key platform for consumer spending
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- Figure 42: Smartphone and tablet behaviours, April 2019,- September 2020
- Older consumers will be more important targets for tech brands post pandemic
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- Figure 43: Trends in consumer behaviour in the pandemic, April 2020- April 2021
The Consumer – Key Takeaways
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- 2020 was the year of the video call
- Uptake in smart speaker sales also contributed to increased connectivity
- Spike in sales of home office essentials triggered by new stay-at-home routines
- COVID-19’s legacy will be more interaction with health and wellness technology
- Younger people and those struggling financially may benefit from tech that helps with mental health
Technology Activities During COVID-19
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- 2020 was the year of the video call
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- Figure 44: Technology activities undertaken since COVID-19, March 2021
- Still scope for simpler solutions for older disengaged tech audiences
- Video calling as an experience will likely become more refined and personal
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- Figure 45: Use of video calling since COVID-19 by generation, March 2021
- Technology services help provide a local connection for communities during COVID-19
- Local focus will continue to be important for brands
- Voice search can open up possibilities for local businesses
Technology Purchasing Pre and Post COVID-19
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- Spike in sales of home office essentials triggered by new stay at home routines
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- Figure 46: Technology purchasing habits pre and post-COVID-19 March 2021
- Office peripherals bounce likely to be sustained in 2021
- At home lifestyles drive wireless headset purchasing
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- Figure 47: Wireless headset or headphones purchasing habits post-COVID-19 March 2021
- Stay-at-home routines likely to drive further interest in smart home devices
Post Pandemic Technology Habits
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- COVID-19’s legacy will be more interaction with health and wellness technology
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- Figure 48: Interest in future use of technology apps, services and devices, March 2021
- Health monitors for vital signs can draw in older audiences longer term
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- Figure 49: Interest in future use of health apps and services, by age, March 2021
- Technology will have a role to play in battling COVID’s lasting impact on mental health
- Younger people and those struggling financially may benefit from tech that helps with mental health
- Online tools can help consumers proactively manage their mental health
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Central Forecast Methodology
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- Market forecast and prediction intervals for the Technology sector
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- Figure 50: Lower bound, central and upper bound forecast for technology Service Providers, 2020-25
- Figure 51: Lower bound, central and upper bound forecast for digital goods, 2020-25
- Figure 52: Lower bound, central and upper bound forecast for hardware, 2020-25
- Covid Scenario Performance Methodology and Assumptions
- Scenario Performance for Technology Service Providers
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- Figure 53: COVID-19 scenario forecasts for technology service providers, 2020-25
- Scenario Performance for Digital Goods
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- Figure 54: COVID-19 scenario forecasts for digital goods, 2020-25
- Scenario Performance for Hardware
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- Figure 55: COVID-19 scenario forecasts for hardware, 2020-25
- Rapid COVID recovery, central and extended COVID disruption scenarios outline
- Scenario Methodology
- Market drivers and assumptions
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- Figure 56: Key drivers affecting Mintel’s market forecast, 2020-24 (prepared 12 March 2021)
- Forecast methodology
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