Consumer Purchases of Smartphones Expected to Rebound This Year, Accenture Survey Finds

Services powered by artificial intelligence also gaining wider acceptance

Price and security concerns hurting demand for smartwatches and fitness
monitors

NEW YORK–(BUSINESS WIRE)–After dropping to a three-year low last year, consumer purchases of
smartphones are expected to rebound this year, fueled by better
security, new functions, improved performance and device refresh
schedules, a global Accenture (NYSE:ACN) survey finds.

The survey of 26,000 consumers in 26 countries – whose findings are
summarized in Accenture’s new Dynamic
Digital Consumers – reveals consumer demand for specific types of
connected devices, such as smartwatches and fitness monitors, will
remain sluggish this year due to high prices and persistent concerns
about the security and privacy of their personal data. The survey also
shows consumers are increasingly embracing artificial intelligence
capabilities such as digital voice assistants.

Resurgence of Smartphone Market

More than half (54 percent) of consumers surveyed said they plan to buy
a smartphone in the next year, up from 48 percent in last year’s survey.
Chinese consumers are the main drivers of this upturn, with
three-quarters (74 percent) of respondents in China saying they intend
to purchase a smartphone in the coming 12 months, up from less than
two-thirds (61 percent) in last year’s survey. The number of respondents
in India and the United States who said they plan to buy a smartphone in
the coming 12 months also increased by double digits over last year, to
79 percent in India (from 68 percent last year) and 52 percent in the
United States (from 38 percent last year).

Among all consumers surveyed, the leading driver of purchase intent is
the ability to access the newest and most innovative features and
functions, cited by 51 percent of respondents in this year’s survey,
compared with only 41 percent last year. Another reason consumers are
opting to buy new smartphones is inadequate performance of their
existing devices, cited by 45 percent of customers this year – up from
33 percent last year.

“Improved features and falling prices are key reasons consumers around
the world are signaling a desire to buy new smartphones,” said David
Sovie, global managing director for Accenture’s Electronics and
High-Tech business. “Growing acceptance of services powered by
artificial intelligence, such as voice assistants, is also fueling this
market upswing. 2017 will be the year when artificial intelligence goes
mainstream in consumer devices.”

Strong interest in AI-powered devices and services

For the first time, the annual survey polled consumers about their
intentions to buy digital voice-enabled assistants such as Amazon Echo
and Google Home. Powered by artificial intelligence, the products
recognize a human’s voice commands, such as ‘Turn on the light’ and
‘Play music’ and answer questions such as ‘What time is it?’ and ‘What
is the temperature outside?’ While only 4 percent of the respondents
said they own such a device today, two-thirds (65 percent) of owners
said they use their device on a regular basis, showing strong acceptance
of this new technology.

Voice assistants on smartphones are also becoming increasingly popular
as the AI technology powering these services has improved dramatically.
Younger consumers are leading the adoption, with more than four in five
(84 percent) of 14-to-17 year olds saying they either use this
technology today or are interested in doing so.

Consumers are also willing to embrace a wide array of potential
AI-powered, personalized services, with a majority of respondents saying
they are interested in personal health assistants (cited by 60 percent),
smart trip assistants (59 percent) and entertainment advisors (51
percent).

Personal data concerns are widespread

Many consumers remain uneasy about securing their personal data, much of
which is housed on smartphones or in the cloud. Nearly nine in 10
respondents (87 percent) said they are concerned about the security of
financial transactions such as buying online. Similarly, 89 percent are
uneasy that companies or systems they have not approved would get access
to their financial information.

The encouraging news for smartphone manufacturers is that consumers
trust device manufacturers with their personal data more than they trust
telecom providers, banks and search-engine companies. More than
one-third (37 percent) said they trust device manufacturers, up from 31
percent last year. By contrast, 36 percent trust telecom providers with
their data – a drop from 42 percent last year, and only 13 percent trust
search engine providers, down from 23 percent last year.

Stalling demand for connected devices

Although smartphone purchase intent is on a growth trajectory this year,
the same does not hold true for other connected devices. For example,
only 14 percent said they plan to buy a wearable fitness monitor and
smartwatch this year, virtually unchanged from last year (at 13 percent).

“The ‘insecurity of things’ is a major industry challenge,” added Sovie.
“There are widespread consumer concerns about the privacy of their
personal data being stolen or compromised. And relative to the value
delivered, prices of these connected devices remain too high. Market
momentum for these devices will stall unless the industry overcomes
these obstacles. If that happens, market demand could accelerate
quickly.”

The survey findings provide evidence that this could happen for
connected devices. Nearly half (46 percent) of respondents said they
plan to buy a home connected surveillance camera within the next five
years, compared with only 10 percent who said they plan to do so in the
next year. In addition, 44 percent intend to buy a wearable fitness
monitor in the next five years, versus 12 percent who said they will do
so in the next year, and 42 percent said they plan to buy a smart home
thermostat over the next five years, compared with only 8 percent who
said they will do so this year.

Methodology

Between October and November 2016, Accenture conducted an online survey
with approximately 26,000 consumers in 26 countries: Australia, Brazil,
Canada, China, Czech Republic, France, Germany, Hungary, India, Ireland,
Italy, Japan, Mexico, Netherlands, Poland, Romania, Saudi Arabia,
Singapore, Slovakia, South Africa, Spain, Sweden, Turkey, United Arab
Emirates, the United Kingdom and the United States. The sample in each
country was representative of the online population. Ages of respondents
ranged from 14-to-55 and over. The survey, and related data modelling,
quantify consumer perceptions of digital devices, content and services,
purchasing patterns, preference and trust in service providers, and the
future of their connected lifestyles.

About Accenture

Accenture is a leading global professional services company, providing a
broad range of services and solutions in strategy, consulting, digital,
technology and operations. Combining unmatched experience and
specialized skills across more than 40 industries and all business
functions – underpinned by the world’s largest delivery network –
Accenture works at the intersection of business and technology to help
clients improve their performance and create sustainable value for their
stakeholders. With more than 394,000 people serving clients in more than
120 countries, Accenture drives innovation to improve the way the world
works and lives. Visit us at www.accenture.com.

Contacts

Accenture
Charles Hartley, + 1 973 590 9920
charles.hartley@accenture.com
@charleshartley
or
North
of Nine
Anthony Suarez, + 1 212 614 4331
anthony.suarez@nof9.com