Forrester Research: Consumer Electronics Not Just About Cool Products Anymore

Forrester Research has issued a new report that finds "the same consumer technology industry that is selling digital devices at a record rate is failing miserably at selling the additional products, services, and content that bring those devices to life."

According to the report, "consumer technology companies today are leaving $3.8 billion in lost revenue on the table." Forrester advises the industry to "stop selling standalone products and start selling digital experiences that integrate products, services, and content in a way that's easy for consumers to buy, install, and use. This strategy has the potential to provide an additional $13 billion in revenue in 2010."

Data illustrating the gap between owning a device and powering it with services and content include:

80 percent of the 18 million Web-enabled mobile phone households don't buy data services. The revenue gap by 2010: $5 billion.
50 percent of consumers who own HDTV sets don't subscribe to HD programming. The revenue gap by 2010: $3.4 billion.
Only one in four consumers who own an MP3 player buys music online. The revenue gap by 2010: $3 billion.
One in three digital camera owners doesn't print these photographs anywhere. The revenue gap by 2010: $1.6 billion.

Ted Schadler at Forrester Research said, "Consumer technology sales are broken. Consumers are being forced to assemble the different components of their digital lifestyle themselves, and they're not equipped to do it. Retailers' traditional approach of lining up racks of products at the lowest price isn't cutting it. Digital experiences are too complex, and technology is changing too rapidly."

Forrester cites Apple as "unique in being able to control software, hardware, and content," and thinks other companies such as "AT&T, Best Buy, Hewlett-Packard, Tweeter, and mobile retail newcomer IMO beginning to offer other digital experience solutions."

Schadler remarked, "Apple's legacy is not just about cool products; it's about recognizing the need for an end-to-end digital experience. The iPod's impact is reverberating across every sector of the consumer technology industry."

Forrester then goes into some examples of what it believes is "the most promising opportunity for selling digital experiences." Forrester calls these "solution boutiques" and looks at retailers like Starbucks, Apple and Best Buy.

Schadler said, "Every consumer technology company — manufacturers, service providers, installers, and retailers — has a role to play in delivering end-to-end digital experiences. Product-service bundles, global media and technology standards, and nonprofit certification groups that implement and test standards are all critical to bringing digital experiences to life for all consumers."