At CES last week, I took to one of the many stages upstairs inside the North Hall of the Las Vegas Convention Center for a panel dubbed "Argue The Future." Joining me for the discussion was our site's managing editor Nilay Patel, alongside representatives from HTC, Samsung Mobile, and Microsoft. The point of the conversation was to talk candidly and openly about where we were heading as an industry — and the responses were revealing.
Amongst other topics, I pressed the companies on whether or not technology manufacturers were simply producing too many gadgets, outpacing real consumer demand with iterative, insubstantial changes. "Are we creating demand where there isn't any?" I asked. Though reluctant, Samsung's Ryan Bidan agreed that the current rate of production "[Is] not optimal, but I think the reality is that this is the industry we're in at the moment." Bidan added, "There should be a drive towards optimization, the sheer SKU proliferation is a problem." HTC's Drew Bamford was more direct. "It's a goal for us," he said.
Those statements mirror what Motorola Mobility chief Sanjay Jha told us rather forcefully earlier in the week. The company has plans to trim its production of smartphones this year, spend marketing dollars more wisely, and slow the "incremental innovation" he currently sees in the market. And it's not just in the mobile space. PC-maker Acer plans to cut its production of laptops by two-thirds in 2012.
It's an attitude that seems to be gaining traction throughout the industry. Gizmodo writer Mat Honan bent his CES 2012 experience into something just shy of beat poetry, but there were simple truths in the twisting prose:
I try to remember all the products I've talked about that I won't even bother to cover—and that nobody's going to buy.
Nowhere is that deluge of products more visible — literally — than at CES. The millions of square feet on the LVCC's show floor are jam-packed with model after model of what could easily be the same product. HDTVs line booth after booth, sprout up towards the ceiling, and tumble over garish, elaborate displays. Smartphones and their accessories (mostly docks) dot outlines and make paths through massive Sony and Samsung micro-worlds, while the smudged glare of anonymous Android tablets greets you at every new spectacle. Nothing seems original.
For a journalist, it's daunting — for shoppers, it's starting to seem impossible.
Gartner technology analyst Michael Gartenberg agrees that the influx of products is creating a growing problem for consumers. "There are too many products coming to market too quickly," he says. "Consumers are starting to become overwhelmed by the rate and pace of releases making it hard for many products to differentiate themselves in a meaningful way," adding, "the net result is shorter life spans for many products."
Those shorter life spans are putting a pressure on consumers that has worked in the short term technology boom of the last few years, but seems to be faltering as the economy sputters, consumer awareness expands, and choices become overwhelming. According to market research firm NPD, television, laptop, and digital camera sales have all been flat or down year-over-year. The company's Executive Director and Principal Analyst in the Connected Intelligence division, Ross Rubin, had this to say: "The slowdown in major categories is due to increasing saturation and a shift to replacement cycles as these categories mature." Rubin adds that companies are attempting to regain some of that ground by adding connectivity and refining designs, but says that NPD is "seeing consumers shift their electronics spending to new, more versatile and more mobile products such as tablets and smartphones."
Even though smartphone sales have rocketed in 2011 (NPD notes a 41-percent gain in smartphone sales), it's telling that major manufacturers of handsets want to scale back their selection over the coming year. Consumer fatigue and market saturation is clearly a concern.
As Chris Ziegler noted in this editorial, these iterative updates don't seem to have a clear impact, and in fact can actually hurt consumers. As differentiation between like-minded products becomes smaller and smaller, and the market stratifies around specific platforms or standards (iOS and Android in the case of smartphones), buyers seem to be finding the myriad selection distracting or upsetting instead of exciting or enticing. Anyone who's been in a cellphone shop lately can probably tell you this.
With a reduction in product lines, consumers will need to think more wisely about where they spend their money — and what they get for it. The end result will likely be fewer products in the marketplace, but bigger technological leaps between launches. Apple releases a single iPhone and iPad per year, but the differences between models (in both software and hardware) tend to be significant. As Samsung's Ryan Bidan put it to us on stage at CES, "Things will level out. Elegance will replace brute force."