NPD Group Blog » Innovation=Optimism, But Products=Revenue

Innovation=Optimism, But Products=Revenue

Tuesday, January 19th, 2010
By Stephen Baker, Vice President, Industry Analysis

This year’s CES was four days of meetings, events, booth tours, and crowds as it is every year. But this year’s show was, unlike last year, imbued with a sense of optimism and opportunity that was absent in 2009. At times even the most innovative and interesting products can get lost in a sea of product demos, displays, and PR hype. And while knowing what is new and noteworthy is the first question people ask me, it is often the last thing I care about. Because, it’s not what’s on the show floor that’s always most important, it’s what ends up in consumers’ homes, sooner rather than later, that counts because that’s where the money is. And what’s new, innovative, and different at CES is often a bit away from hitting the store shelves or being relevant to a mainstream consumer.

For the industry the preliminary figures from CES are more attendees, more exhibitors, and more optimism this year than last and that is a good thing. But, of course last year’s bar is pretty low. And as we mentioned before new and interesting is great but, as the CE business matures that isn’t what pays most of the bills. Today’s challenges of driving revenue and volumes are a bit at odds with showing a Boxee Box or 7mm thick TV that won’t generate significant sales opportunities for years. Innovation is crucial but it pays next year’s bills, not this year’s.

And to reinforce that notion, this year’s trends were not products likely to pay the bills in 2010. In 2009 netbooks were all the rage and clearly they were focused on paying the bills that year. We didn’t have that focus this year. But for 2010 3DTV and tablets are not likely to be mainstream devices, although certainly tablets (in the broadest sense of the word) will be in more consumers hands by the end of the year than 3DTVs, and have more impact in 2010 as well. Longer term, a healthy TV hardware market, leveraging growing and innovative content, and distribution platforms will be the number one factor in returning the CE business to a more healthy and stable growth rate than we have seen in the past.

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