Dealer Data: How to Identify the Next Big Product

Dealer Data: How to Identify the Next Big Product

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A popular contest held each year at CES tries to identify the one product out of all the thousands with the greatest chance for success. Long before submissions begin flooding in, annual research conducted by the CEA Market Research gives us an idea of the types of products consumers might consider future blockbusters.

In CEA’s 9th Annual Household CE Ownership and Market Potential Study, we not only gauge what consumers own now but what they plan to own in the future. This research reveals two categories of products I find especially interesting. For simplicity, we’ll refer to them as the “next-next” and the “potential.”

Next-next products are those that have a low ownership rate, but a high percentage of homes plan to buy those products in the next 12 months. These are the products that will be best sellers in the next year or two. Potential products are devices showing low penetration and a low percent of households planning to buy the device in the next year. These products could eventually fizzle, but could also move into the next-next category and become tomorrow’s blockbusters.

From a select group of products, we find dedicated photo printers and high-definition TVs (HDTV) in the first camp. While HDTV hardly seems a technology of the future given its mass appeal, it is still 41 percent more likely to be owned by early adopters. Today, HDTVs show-up in roughly 30 percent of households but have a market potential of nearly 80 percent, while 15 percent of non-owning households plan to purchase an HD set over the next 12 months. The appearance of dedicated photo printers in the next-next category is just another sign of the DIY movement enabled by the digital world. Today, 19 percent of households own a dedicated photo printer and about 13 percent plan to own one in the next year.

In the potential category we find portable gaming and portable GPS devices, which highlight the popularity of mobility. Portable gaming devices show up in 26 percent of homes, but CEA research reveals a potential twice as large. Although less than six percent of households plan to by a portable gaming device in the near-term, the product category could show great promise in the next two to three years. A similar story holds for portable GPS devices. With only 11 percent of households owning one and with only seven percent planning to buy one in the next 12 months, you’d think portable GPS would die out? Despite those low numbers, CEA research suggests a potential market five times the current size.

The future of technology is before us. It is emerging through trends such as high-definition, DIY and portability. These will continue to garner attention and usher in a plethora of new products to serve tomorrow’s consumer.

Shawn DuBravac, CFA,is the economist for the Consumer Electronics Association.

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