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June 07, 2002
Accenture Study Reveals Battle for the "Networked Home" Must Take New Direction

NEW YORK; June 7, 2002 As the battle for the living room heats up, more than half of tech-savvy consumers in the U.S. say they are currently indifferent to the enhanced experience that a networked home may offer, according to an Accenture study.

Rather than connecting all the groups of devices throughout their homes, consumers are much more interested in the immediately realizable benefits of stand-alone devices, as well as greater interoperability between devices that perform related functions, especially in the home entertainment and home office areas. These are among the key findings of a survey of approximately 4,500 consumers conducted by Accenture to gauge consumers’ values, attitudes and adoption of home electronics.

The study defines the "networked home" as a series of devices, like a PC or TV, and services, like Internet access or cable service, all in the home, that are linked together through a common network, either wired or wireless, and ubiquitously interact with each other. According to the survey, customer readiness lags behind the technology:

  • 57 percent say they don’t have and don’t want a wired home network
  • 66 percent say they don’t have and don’t want a wireless home network

More than half (57 percent) expect the introduction of many new electronic products they will want in the next two years, and 88 percent say it is important for new devices to connect easily with their existing home electronics.

"Although consumer optimism around new product introductions suggests that the environment may be ripe for the move toward a networked home, it’s not going to happen overnight," said Charles Roussel, partner in Accenture’s Electronics & High Tech group. "Consumers are shying away from cost and technical complexity."

According to the study, consumers are very dissatisfied with costs:

  • 88 percent are dissatisfied with satellite and cable costs
  • 62 percent are dissatisfied with PC costs
  • 54 percent are dissatisfied with game console costs
  • 49 percent are dissatisfied with TV costs

Contributing to consumers’ indifference is that most (60 percent) make home electronics purchasing decisions based on the best current value for their money. In other words, they are willing to pay for benefits they can enjoy immediately. They are not willing to pay for the value that a device may offer in the future.

"The real market opportunity over the next couple of years is to help consumers connect easily within groups of devices, before connecting across groups and throughout the home," said David B. Rich, global managing partner of Accenture’s Electronics & High Tech group. "The future is bright for consumer adoption of the networked home, but more work needs to be done around defining the total customer ownership experience."

Most consumers (61 percent) have many sophisticated electronics in their homes. They are generally satisfied with what they currently have, and see no compelling reason today to embrace the idea of the networked home.

  • 92 percent have at least one PC
  • 58 percent have a scanner
  • 48 percent have a DVD player
  • 41 percent have a digital camera
  • 31 percent have a home theater
  • 30 percent have a multifunction printer

The study also suggests that companies must focus on increasing consumer value and enhancing interoperability among devices. Specifically, companies should focus on creating new applications within device clusters that address consumers’ core values of lifestyle fit, ease of use,performance and functionality, and low cost.

Methodology
Accenture conducted an online consumer survey to explore preferences, values, attitudes and brand perceptions and identify obstacles to consumer adoption of home electronic devices and services today and in the future. Accenture distributed the e-mail survey to 40,000 online households in Spring 2002 and received almost 4,500 responses.

About Accenture
Accenture is the world’s leading management consulting and technology services organization. Through its network of businesses approach – in which the company enhances its consulting and outsourcing expertise through alliances, affiliated companies and other capabilities – Accenture delivers innovations that help clients across all industries quickly realize their visions. With more than 75,000 people in 47 countries, the company generated net revenues of $11.44 billion for the fiscal year ended August 31, 2001. Its home page is www.accenture.com.

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