By Lisa Johnston
New products on display at the American International Toy Fair, held in N
LAS VEGAS – Smartphone, smart watch and tablet suppliers will tote new products to International CES to leverage market growth and target market-expanding niches.
Cellular signal-booster companies will also go to CES to launch the first consumer cellular-signal boosters certified to meet the Federal Communications Commission’s new performance specifications, which go into effect on March 1 to prevent cellular-network disruptions.
The booster companies forecast growing signal-booster sales given the rise of households that rely on cellphones as their primary homes phone.
In the smartphone segment, companies will focus on product differentiation, higher performance and large screens of 5 inches and larger to gain share in a maturing U.S. market that will continue to grow in 2014 but at a slower pace.
Some smartphone suppliers will focus on market-expanding niches, such as kids’ smartphones as well as high-performance but low-priced smartphones targeted to price-conscious consumers who subscribe to prepaid services that don’t subsidize handset costs. These include smartphones lacking 4G LTE but incorporating HSPA+21 data. Some of the smartphones on display will include the first model with octa-core CPU and at least one new model with dual-window multitasking. The industry’s first curvedscreen phones from LG and Samsung are also expected to go on display for the first time in the U.S.
In the smart watch segment, more companies will enter the fledgling market. Big names such as Samsung, Sony and Qualcomm have already entered the market, as has start-up Martian Watches, which is also exhibiting. These names will be joined by at least four more new smart watch vendors, including tablet maker E-Fun, which markets Nextbook- brand tablets and is bringing the smart watch to market under the E-Fun name. At least one more company will expand its smart watch selection. Qualcomm’s model will also be on display at a CES for the first time after having become available in December. It will be in the WristRevolution pavilion in the show’s Tech Zone.
In the tablet market, the show will play host to multiple launches by small companies, which are collectively gaining market share as they satisfy demand for lowprice models and fill in fledgling niches such as the children’s market. Many of these companies will flex their muscles at International CES, with at least seven lesser-known brands launching new Android products.
Other small tablet players that recently entered the market include Monster and E&S International Enterprises, which licensed Pioneer name for a $99 7-inch tablet launched on Walmart.com in late 2013.
Canalys sees such small companies gaining share in the Android tablet market. “The rise of small- to micro-brand vendors has proved that there is a demand in for entry-level Android tablets in every country and in every region,” said Canalys analyst James Wang. “With the cost and time-tomarket advantages afforded by their Chinese supply chain, these small- to micro-brand vendors are eating up tablet market share. Vendors such as Nextbook in the United States and Onda and Teclast in the People’s Republic of China ship more units than some of the major international top-tier vendors in their home countries.”
In the smartphone market, though the market is maturing, there’s still a potential for “plenty of growth,” consulting company Chetan Sharma said. Almost 90 percent of handsets sold in the U.S. in the third quarter were smartphones, helping boost smartphone penetration of the cellular subscriber base to 64 percent. But there’s still plenty of growth potential because the 64 percent of phone users who use smartphones is concentrated in only 40 percent of households, the company said.
In a maturing market, said Juniper Research, “differentiation becomes vital to continued success.”
IDC forecasts that North American smartphone shipments will grow between 2013 and 2017 at a compound annual growth rate of 7.8 percent, with average selling prices rising 2.1 percent to $567 from 2013’s $531.
The smart watch market is far from mature, but it has its own challenges, namely turning products from a niceto- have device into a must-have device, analysts said. That means better design, more apps, and a lower price, analysts said.
“For wearables to be successful, they need to add to the user experience by complementing and enhancing what other devices already offer,” said Gartner research VP Carolina Milanesi. “They also have be stylish yet practical and most of all hit the right price point.”
In the short term, she said, “we expect consumers to look at wearables as nice to have rather than a must-have, leaving smartphones to play the role of our faithful companion throughout the day.”
Smart watches are not only in their infancy in sales but also in capabilities, adds Chetan Sharma Consulting. Most wearable smart devices “are where smartphones were in the late nineties — basic, functional and full of possibilities,” the company said. The evolution of wearables, however, “will be much quicker,” the company added.
For her part, principal Gartner analyst Annette Zimmermann cited “several significant barriers to mainstream adoption, including low interest and awareness among consumers, poor design and price.” Although leaving a larger-screen phone or tablet in a handbag or pocket “is something that users can relate to and probably recognize its value,” Zimmermann explained, “users expect more than just more convenience from a new product category that claims to be innovative and priced at $200 to $300. That amount of money pays for a basic tablet with a good feature set, she noted.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.