The great global thirst for IoT devices may be over – report

5 Jan 2016

iPhone 6s and Samsung Galaxy S6 Edge+. Image via Luke Maxwell

What seemed like a ravenous thirst for all things connected, a technological virus spreading from one corner of the zombified globe to the other, may be heading for an understated end.

That’s according to a new report from Accenture that looked at what many thought was a global desire to add internet to everything from our smartphones to our bras.

But it turns out consumer suspicions of insecure networks, a saturated smartphone market and growing privacy concerns are now starting to influence the average shopper.

Surveying thousands of people in dozens of countries, Accenture’s report (given the somewhat leading title of Igniting growth in consumer technology) found that half of us cite those three issues as concerns obstructing our purchase of more gadgets.

To quit, or not to quit

Almost one-fifth of the 28,000 people surveyed said they’ve quit using their IoT devices, or ended their contracts, until safer guarantees are provided.

This figure seems somewhat surprising, although, it’s important to note just how many people share these concerns, but are barely flinching in their use of connected devices.

More than two-thirds of those who plan to buy devices this year said they know that these products are capable of being hacked and, therefore, can result in stolen data or device malfunctions.

Understandably, the number of those looking to buy smartphones this year is down on this time last year (from 54pc to 48pc).

This is echoed by a recent IDC report, which cited global smartphone sales slowing to below 10pc for the first time since their creation.

Smartphones losing their sheen

IDC said that growth is slowing in Asia-Pacific, Latin America and western Europe, with the only growth markets remaining being Japan and the Middle East and perhaps India.

China’s faltering economy can take the credit for a lot of this slowdown.

Historically, the key driver for this industry is cheap phones with short lifespans, attracting swathes of consumers in emerging markets. IDC’s Ryan Reith noted in December that phones that cost less than $100 employ components that would struggle to last two years, thus starting a cycle of constant repurchasing.

But now, IDC feels “affordable high-value handsets” will become the market mainstays, instead.

That’s partly to do with pricing but also looking at the trend of phones currently being bought – in established markets, the devices are lasting longer, meaning they are replaced less frequently. Trade-ins may be manufacturers’ only response.

Slowdown across the board

Accenture’s report, though, goes further, claiming that 30pc of those looking to buy a new TV or tablet is down almost one-quarter on last year – not quite end of days, but certainly a regression.

“The slowdown in the consumer technology market is irrefutable, serious and global,” said Sami Luukkonen, global managing director for Accenture’s electronics and high-tech group.

“The market is not about the glitzy gadgets anymore – rather, it’s about providing secure, innovative and practical digital services and more open collaboration.

“As device demand tapers off, the industry needs to make a sharp turn toward providing innovative, value-added services that consumers are able to use with confidence.”

Gordon Hunt was a journalist with Silicon Republic