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Show review: impressive tech from IFA 2019

PCR IFA blog

Wow, what another great IFA. In its 59th year, the show exceed last year’s 1,800+ exhibitors and 244,000+ attendees and continued to be cemented in the calendar as the leading showcase of the technology industry for trade and consumers.

The consumer goods market in Europe is significant and for the first half of 2019 was worth €450bn, down 2% and forecasted to remain flat in the second half at €1.011tn. However, the stats still define Europe as the second largest technology market with a 25% share, behind China at 27% with North America third with a 19% share.

The speed of change in product innovation, and the increase in channels to sell these products in line with customer needs, is not losing pace. While there was no great fanfare of a new technology announcement, what was evident was how innovation and invention are evolving into the mainstream. This included the next generation of Web Operating Systems, 5G devices and AI developments, all designed to achieve a more proactive ecosystem which enables all devices and appliances in the home to be connected more efficiently.

One of the key focuses this year more than ever was the prevalence of voice control / AI controlled products. Almost every brand and category has either one or both of the two leading voice assistants becoming inbuilt and connected, increasing the smart home ecosystem across almost every device, MDA and wearable.

The adoption of AI amongst all age groups is on the increase with 31% of millennials owning three or more connected devices and rapidly increasing across all generations as ‘our’ trust increases in the technology and privacy fears are addressed through tougher regulatory measures. Apparently it would take you on average 73 days to read all the Ts & Cs you’ve signed up for online and even then we don’t have a clue what we’ve agreed to. Tougher regulation is essential to protect our data and how brands use the data we willingly offer up.

The smart home market is growing, but for many, the smartphone is still key when controlling smart home elements. However, when looking at energy and lighting controls, 32% use a smart speaker. Whilst 15% of UK consumers say it is “essential” for new smart home devices to connect with a smart speaker/ home hub, 32% say “I would be open to trying shopping via voice and a smart speaker”, whereas only 20% say “shopping by voice with a smart speaker would be much more convenient than the ways I shop currently”.

JBL who have shipped over 100 million speakers globally and launched the #100mSmiles campaign made clear their intentions to dominate by understanding the market better than many, having identified that 70% of consumers would like an audio device with the possibility to control their environment to create the right ambience while listening to music. They also had a nod with ‘green’ credentials in the smart device category, which may be a first, launching the Flip 5 Ocean & Forest, a connected speaker made from 90% recycled plastic.

LG were really rather forward thinking at this year’s IFA Future Talk and identified the ‘silver generation’ as a potential growth area for technology, however it accepts that trust within this generation is a barrier. It also focused on the need for simplicity, which is self-evident from products that were once considered cutting edge and are now defunct. Thinking about how difficult it was to program a VCR. It was a challenge and now this challenge is eradicated because we just talk to the devices to fulfil the same function.

The connected market is on the increase, no question and this extends to white goods with 11.4% of all MDA’s sold in Western Europe being connected, up from 4.8% in the same period back in 2016. When you consider that in Q4 2018 connected MDAs in Asia Pacific accounted for 26.5% of all MDAs sold, there is still growth opportunities for brands and retailers in the European market.

There’s been a lot of hype around 5G and this was also evident at IFA 2019, and while autonomous vehicles will rely on the technology in the future, more immediately 5G is a transformative technology for the home. As it’s spearheading a multi-dimensional world connecting appliances, brands and people in real time with its fast bandwidth and reduced latency. Take a look around your home. There’s already numerous appliances that rely on a strong wireless connection to work, from virtual assistants to laptops – and without it everything comes to a halt. 5G will provide an alternative to fixed wireless internet making things connect quickly, nicely and simply. From rural areas where broadband speeds are poor to urban areas where speeds can suffer from congestion; 5G will enhance the possibilities for a smarter home, streets, towns and cities.

Autonomous vehicles were more evident this year and as we draw closer to the reality that we may get driven rather than drive ourselves, acceptance is increasing. In essence cars will become more than a means to get from A to B, enabling the passenger to do more. An interesting take on this reality, again by LG, was asking what are we going to do with our time whilst being transported? Well LG want to entertain you by making that now redundant windscreen become a TV screen that you can cast to and watch, work, play or shop. Imagine being driven autonomously and be surrounded by the convenience of technology that enables you to carry on as you would do at home or in the office. The safety concerns are evident as highlighted by Tyron Louw, Research Fellow at the Institute for Transport Studies, University of Leeds: “Nobody knows for sure how the world will look in five years, yet we are all under pressure to prepare for that future. Driverless cars merge two imperfect systems – humans and automation – to anticipate new types of road accidents.”

However, with the advent of 5G, autonomous vehicles on our streets, not just in major cities, is certainly not fantasy and definitely reality within the next decade.

The consensus at SHIFT, the two-day convention at IFA Berlin exploring the Future of Mobility was clear: “Electric vehicles will be a key part of the future of mobility, but they are not the only solution. Instead, smart cities and autonomous vehicles will be key components of our “mobility-as-a-service” future, where cars are just one component of a broad mix of transport modes that we are using.

“While there was no doubt among participants that autonomous vehicles would soon become reality, they were split on how this would affect the world’s car culture.”

Other trends away from true innovation saw many brands tapping into the increasing esports market. Acer launched Planet9, an open gaming community platform and others have negotiated tenuous link ups such as Beko with League of Legends and Samsung with Fortnite. All no doubt designed with a view to ride the increasing esports wave and appeal to Millennials and Generations Z and Alpha. The global market for gaming hardware is on the rise as a result of its appeal and new ease of access assisting in a forecasted 14% increase in 2019 with an estimated value of €12.4bn.

Whilst IFA is all about innovation and showcasing the future, I must admit I do enjoy a bit of nostalgia and my favourite throwback product came from Sony with the Walkman 40th Anniversary edition. A welcome reminder from Sony on how they as the innovators once changed how we listened on the move and created a category in the process that everybody copied and developed to be better or worse depending on your opinion.

IFA is not just about showcasing technology, it’s also about defining how we as human beings could or will live better lives through the adoption and acceptance of innovation. Long may IFA continue to enable and encourage the creativity of brands to define the technology of the future.

To read the full article please visit PCR.
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Tapping into the booming esports market

PCR BLOG

In July 2019, spanning three days, the largest gathering of gamers from around the world – 40 million – took part in the Fortnite World Cup tournament. Hailed as a monumental moment for esports, the winner, a 16-year-old, took home £2.42 million. The prize sum overshadowed the £1.6 million Shane Lowry won at this year’s Golf Open Championship in Portrush. The esports industry is becoming increasingly popular, rivalling many traditional sporting events with the Fortnite tournament watched by 23,000 people in a sold out New York stadium and millions more through live streams.

This highlights how the gaming industry and its place in culture has evolved, with gamers stepping away from their own consoles to watch others play their favourite games. And not surprisingly, this is reflected in the size of the gaming market which continues to grow rapidly. According to Newzoo, there are reportedly 2.3 billion active gamers globally and 46% of those (1.1 billion) spending, the financial impact to the establishment is significant. More so with the forecasted growth of gaming from $137.9 billion in 2018 to more than $180.1 billion by 2021. Looking just at the UK, the gaming market is now worth a record £5.7 billion thanks in part to the strong foundations in place for innovative games and entrepreneurial developers.

The next 12-18 months looks set to be a very interesting for the sector with some of the big names in gaming hardware expected to reveal their next generation platforms. Expectation is that Sony, who have sold 525 million consoles since launching PlayStation in 1994, will start to ship their latest console in the second half of 2020. And of course both Nintendo and Microsoft will be in the mix too. Microsoft officially announced its next generation hardware, codenamed Project Scarlett, during its E3 2019 conference and it’s due for release in time for “Holiday 2020”.

Before that is the exciting debut of Stadia in Q4 this year which may be a potential fly in the ointment for the established gaming brands. Google’s launch of Stadia is a game-changer, and a move that will have Nintendo, Microsoft and Sony quite concerned. No downloads, no patches and no console makes this the cloud gamers dream, and Google is delivering this incredible service without compromising on graphics quality.

As Phil Harrison VP and general manager at Google stated when launching Stadia: “It’s a new generation platform, rather than a next generation platform”. In evolving the concept of platforms, rather than recreating them, Stadia will be a tough act to follow, with sharing options via YouTube, which has 63 million daily viewers worldwide, Google Assistant built in, 4K resolution games at 60 frames per second with HDR (High Dynamic Range), and a plan to support 8K resolution in the future.

The excellent features are great news to those who have grown up used to on-demand web-based entertainment, app-based games and instant updates to technology, but for generations who are familiar with buying physical consoles and games, this could be a transition they may not make because nostalgia can come into play. Owning a console and saving up to buy the latest must have game and completing it before trading it in to buy the next release, has been a pleasure to many.

The generational changes in consumers has seen Millennials identify with nostalgia and they recapture their youth through console gaming just as they have been doing for over 20 years. There is a shared enjoyment amongst social groups in getting together and playing a multiplayer game on Mario Kart on the original Wii. It’s also interesting to see how the retro gaming sector tapping into this and making headlines. Available to buy this Christmas will be a reimagined full-sized reissue of the Commodore 64.

Giving this generation a chance to either buy or play the consoles and games of their youth could open up a new opportunity for gaming retailers, because a streaming service is not great news for those retailing the hardware to eager gamers needing to upgrade to access the dream being sold by the platforms. Indeed, GAME has been battling tough high street conditions and has seen in the past three months a successful take over by Sports Direct. The British sports gear retailer said it did not believe that, as a standalone business, GAME was “able to weather the pressures that it is facing”.

Furthermore, the introduction of streaming could see the resale market suffer too, again a blow to high street stores such as GAME and CEX.

This is an evolving and exciting market with opportunities and pitfalls for the whole supply chain. I started this piece discussing the phenomenon that was the Fortnite World Cup and for retailers, this presents a huge opportunity to tap into this ‘experience’ economy and revive their fortunes by using empty high street spaces to create purpose-built gaming arenas for live gaming where the community can come together. But there’s no doubt that we’re going to see a ferocious battle between Stadia and the console manufacturers – so let the games begin.

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