Consumer electronics, as illustrated at the recent International Consumer Electronics Show (CES), is increasingly about experiences rather than just devices. This mirrors IDC’s new approach to consumer market research where coverage is aligned with lifestyle or experience categories rather than with device silos.
IDC still covers gaming, wearables, phones, tablets, PCs, AR/VR and the smart home as deep dive subject matters, but IDC’s new Future Consumer research practice uses a framework in which consumer experiences (comprising devices, services, business models, and more) are broken down into eight categories. These categories are Entertainment, The Home, Travel and Dining, Personal Mobility, Money, Shopping, Lifelong Learning, and Wellbeing. These categories were reflected, to different degrees, in the floor plan organization of CES, which took place in Las Vegas during the first week of 2023. The LVCC North Hall, for example, featured exhibits categorized as Digital Health, Advanced Mobility and Fintech (although Fintech was poorly represented).
Entertainment, The Home, Personal Mobility, and Wellbeing were dominant facets of CES vendor exhibits. On the other hand, consumer experiences enabled more purely through services such as Travel and Dining, Money, Shopping, and Lifelong Learning were not well represented on the show floor.
Entertainment experiences at CES included the obligatory large flat panel television screens featuring the latest display technologies and highest resolutions. However, whereas televisions dominated the central hall booths of leading consumer electronics vendors in years past, in 2023, television was part of a much broader story of connected devices and experiences. Most of the large consumer electronics vendors pushed various smart home solutions as hard, or harder, than they pushed the next generation of large-screen TVs. So the Entertainment category featured a diverse range of consumer devices and services. Perhaps featured most prominently were gaming and the Metaverse.
Unfortunately, the designated Metaverse area of the show floor featured relatively lackluster demos that likely did little to convince CES attendees that the fully touted potential Metaverse experiences are anywhere close to coming to market. But various VR headsets and VR gaming experiences (notably a key focus for Sony), offered a more near-term incremental step toward a more robust and all-encompassing “Metaverse” experience. Microsoft featured gaming, along with its Surface tablet, but, along with other large exhibitors, failed to put forward a story that tapped into the growth of consumers as content creators.
Sony was a notable exception and specifically called out creators as a key customer segment with a selection of Sony tools, solutions, and devices ranging from entry-level for the beginning content creators to high-end for the advanced and professional creators. Sony articulated the notion of a technology roadmap of products that creators could use as they gain experience and demand more sophisticated content creation results. IDC believes it is a missed opportunity that other vendors did not mirror Sony’s focus as independent content creation continues to grow as a key facet of the consumer entertainment market.
IDC’s Consumer Market Model (CMM) forecasts demand for independent content subscriptions will grow to over 3.7 billion users worldwide in 2026.
Whereas in past years, entertainment devices seemed to dominate CES, in 2023 the torch was arguably passed to the smart home. Smart home experiences were highlighted throughout the LVCC Central Hall in the large booths of major CE vendors and the Venetian Expo show floor. While large vendors demonstrated whole-home connected experiences, smaller vendors tended to focus on specific products designed to integrate into the smart home.
Robot lawnmowers, pool cleaners, vacuums, and security guards were nothing new and were overshadowed by experiences such as smart baby nurseries, air quality management, and the connected kitchen. A key facet of these experiences is that the value proposition for consumers transcends just a single device and a single piece of smart home functionality.
IDC believes that such value propositions can help propel the smart home forward, but success depends on the proper go-to-market strategies by vendors to educate consumers and sell solutions rather than individual products. The volume of smart home solutions on display at CES illustrated industry belief in a robust smart home future, but the supply side of solutions needs to be coupled with effective consumer education to drive demand.
Other items highlighted on the show floor also bear watching. Wireless power solutions, for example, to keep smart home devices charged, were well represented on the show floor. And CES showed us that Matter has arrived; Matter feeds into the importance of interoperability in delivering on the promised experiences of tomorrow’s connected home, experiences that are personalized, proactive, predictive, and contextualized.
In terms of the volume of floor space allocated to a FC category at CES, Wellbeing may have trailed only The Home. Wellbeing devices, applications, and services encompassed sleep tech, health monitoring, fitness, and other market segments. Similar to the continued development of robust multifunction smart home solutions, Wellbeing solutions have moved well beyond fitness trackers and increasingly into health monitoring. And the range of solutions available to consumers in this category is vast, ranging from urine test applications to detect a host of health attributes to technologies designed to provide therapeutic activities for brain health.
All of these empower consumers at home with convenient access to the means to track, detect, and diagnose health and wellness issues, offering consumers more independence from costly in-person medical care. For insurance companies, one can see how many of the tools could be leveraged to decrease the need for in-person office visits and thereby reduce costs. Notable at CES was the AARP (American Association for Retired People) booth in which vendors were aggregated to demonstrate how tech can be employed to address aging, with a particular focus on items such as social engagement and brain function health.
The demand-side outlook for Wellbeing solutions is strong as IDC’s Consumer Market Model projects 1.5 billion users of sleep tech and 2.7 billion users of online fitness services worldwide in 2026.
Motorized bikes and scooters were on display from many vendors throughout booths at both the LVCC and Venetian. Perhaps ironically, many motorized bikes and scooters were featured just steps away from the designated areas for sports tech and wellbeing solutions in the LVCC North Hall.
One of the most notable announcements during the show was the unveiling of branding for a combined effort between Sony and Honda to bring a next-generation electric vehicle to market. The car looked promising, but the name, Afeela, left us scratching our heads. Broadly speaking, however, the trend towards electric transport has moved downstream from cars and other large vehicles to personal mobility items such as scooters and bikes. They indicate the degree to which small electric vehicles can transform consumer experiences within the Personal Mobility segment.
Key Future Consumer Themes to Watch
- A key theme we’re monitoring is the impact of younger Millennials and Generation Z on the tech landscape. These consumers are typically digitally self-sufficient, having grown up with smartphones and connected experiences. They often behave far differently than older generational cohorts and vendors across the B2C landscape (tech and non-tech alike) must understand the needs and wants of these consumers before it’s too late to react. IDC’s Consumer Pulse offers extensive analysis of how these consumers drive demand for new experiences and how their share of tech spending will grow in the decades to come.
- Consumers as creators and as consumers of independently created content is a trend that will disrupt major media, advertising strategies and spending, traditional content distribution, streaming services, and the social media landscape. The growth of services drives demand for enabling platforms, software solutions, connectivity, and monetization technologies. Moreover, it drives demand for creation tools ranging from phones to cameras to PCs and more. Understanding the demand growth sheds light on the vast scale of this opportunity, and understanding the needs of creators informs device and software strategies of vendors across the consumer tech ecosystem. And, the growing power of AI is poised to radically redraw what it means to create content.
- Hyper-personalization at scale brings the personalized experiences consumers have been promised. Personalization will impact all eight of IDC’s Future Consumer framework categories. Personalization changes the dynamic between consumers and vendors, creating challenges and opportunities. The creation of new types of data collection and processing will necessitate a willingness on the part of vendors to find a balance between trusting the data and the knowledge and intuitions of the human team. For consumers, it has the potential to drive greater trust in and affinity for brands or damage previously earned trust. AI will be a major force in personalization.
- Everything-as-a-service is a theme that is increasingly coming to the consumer market as a shift to “as a service” models can benefit both consumers and vendors. Consumer benefits include lower up-front costs, more knowable long-term costs, an improved user experience that evolves and gets better over time, and one-on-one relationships with trusted and admired vendors. Vendor benefits include more predictable refresh rates, opportunities to upsell services that improve experiences, recurring revenue streams that can fund long-term product development, and high-touch interactions with consumers which shift the sales model from transactions to trusted relationships.
The impact of the Future Consumer will be felt everywhere. It’s not just how consumers engage, for example, with social media, but also how non-tech consumer brands must leverage specific social media applications to reach consumer segments. The impact transcends the consumer market. Consumers are also buyers of B2B services and corporate devices in their professional capacities. The behaviors of consumers, therefore, particularly among younger generation cohorts, will also permeate business environments. And the growth of new consumer services will drive demand for infrastructure, tools, software solutions, connectivity, and more as businesses evolve and transform.
As IDC articulated in its breakfast briefing presentations at CES, we are seeing the rise of the Future Consumer. Are you ready for the seismic shift? Learn more about with IDC’s Future Consumer research and services and how you and your organization can prepare.