Mobile innovation will drive digital market
The digital market, which includes IT, telecommunications companies and consumer electronics, will be driven by advancements in virtual reality (VR), smart home technology, connected cars, wearables and mobile payments in the next few years.
This is according to J"urgen Boyny, market research company GFK's global director for consumer electronics.
He shared his insights with over 300 journalists at the pre-IFA 2017 press conference this weekend in Lisbon. IFA will take place in September in Berlin and is the biggest consumer electronics trade show in Europe.
Boyny says the digital market was worth $948 billion in 2015 and will grow to $954 billion by 2020. He says it is a vital market dominated by new innovative products but at the same time plagued by fading out technologies.
At the moment, Boyny says the main driver of the market is mobile connectivity with the smartphone at the centre. It is used by an increasing number of people as their primary way to navigate the digital world.
There are five areas where companies in the digital space can expect disruption within the next few years, all controlled primarily by the smartphone.
The first is mobile payments.
Boyny says being able to make payments without the need for infrastructure is a revolution for store owners: "Suddenly, all that is needed is a smartphone, an app and an Internet connection.
"This makes things much easier, and more things possible," he says.
Mobile payments take the form of built-in solutions made by smartphone manufacturers like Apple Pay or Samsung Pay (not available in South Africa yet) or with a small affordable add-on device like the locally produced iKhokha or Absa Pebble.
The second driver will be using smartphones to access virtual reality.
A study done by GFK in the UK showed 70% of people surveyed have plans to buy a VR headset this year for gaming or entertainment.
"This is the year that VR and augmented reality will start to achieve mass market success," says Boyny. He says other applications beyond entertainment will also begin to emerge.
The third driver is smart home technologies and hardware which are all controlled through an app on a smartphone.
While smart home gadgets may have been seen as complicated and unnecessary until now, Boyny says this will change when millennials start buying homes.
"Millennials are the most important market for smart home manufacturers, as these will be the people who will want to build their homes smartly from the get-go."
The fourth driver is the connected car.
Boyny says it will be a long and winding road to mass adoption of fully autonomous cars, but the modern car is already connected to users' smartphones. He says this connection will continue to develop.
The last main driver of digital market growth, according to Boyny, is the wearables market.
He says wearable are an extension of the smartphone's basic features to a place where it is always in view. More and more people will soon own a wearable in one form or other, says Boyny.
He notes 117 million units were sold last year worldwide and there is an expected growth of 37% for the wearables market this year.