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.

Service Providers at risk of losing their customers

The survey also revealed that if a global digital giant such as Google or Amazon launched an offer comparable to their mobile operator, 44% of respondents would leave their provider, forming a gloomy outlook for communications service providers (CSPs).

The introduction of the eSIM also brings new challenges for CSPs as switching between providers becomes even easier. The survey found that 68% of online consumers would be interested in using a device with an eSIM with 50% saying it was because of the ability to switch from one provider to another more easily and quickly to get a cheaper call or data plan, accelerating the race to the bottom for data and connectivity and further commoditizing CSPs’ core business.

Methodology: Between October and November 2016, Accenture conducted an online survey with approximately 26,000 consumers in 26 countries. 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.

Adapted from articles by businesswire.com and itonline.com | photo: pixabay