While the availability and speed of internet service can vary from state to state or country to country, there are a number of technology devices that have reached parity levels among connected households in rural and urban markets in the United States. These include TVs, game consoles, smartwatches, activity trackers, and tablets, according to the NPD Group. However, the latest Connected Intelligence Broadband America Consumer Report reveals wider gaps exist in ownership levels of devices that are more dependent on an internet connection to reach their full potential. Examples include 4K TVs, where a broadband connection is required for high-definition streaming, and smart home devices, where higher download speeds are needed for live video streams.
In the U.S., 50% of households do not currently have a broadband connection (i.e., 25Mbps per second download speed or greater). In addition, 15% of homes in the U.S. have no internet access, while 10% use a smartphone-only solution. Based on NPD’s findings, this lack of internet access or lack of internet speed has the biggest impact on rural markets. As a result, in rural markets ownership of 4K TVs and home automation products have trailed ownership levels reported in urban areas.
While other factors also influence this ownership gap, such as income levels, one theme that is consistent across 4K TV ownership for connected households in rural and urban markets is that as home internet download speeds increase, so too do household ownership levels. The same can be said of smart home devices, like internet security cameras that require higher download speeds. Conversely, ownership of DVD and Blu-ray players decline, as internet speeds grow because consumers are more likely to stream content when higher internet speeds are available.
“Consumers often experience buffering, when streaming in high definition without broadband access. As a result, homes with slower internet speeds have less incentive to purchase 4K TVs. In the case of smart TVs, while consumers may purchase them regardless of their internet connection, consumers with low internet speeds have lower usage, which presents a challenge for manufacturers that need usage data and advertising revenue to help sustain manufacturing,” said Eddie Hold, president of NPD Connected Intelligence. “The internet is essentially the lifeblood of all consumer electronics products. Understanding where coverage gaps exist can help explain trends and identify future opportunities.”