Archive for February, 2008
Last month’s unveiling of Apple’s MacBook Air unleashed a torrent of consumer passion, both pro and con. That Apple’s innovative design could peak so much consumer interest is not surprising. But the MacBook Air added a new wrinkle: it is one the most compromised laptops Apple has created since the launch of the original Mac Portable.
Like mobile phones, laptops are quickly becoming an extension of one’s persona. They’re such an essential part of the consumer’s communication toolbox that users now refer to their notebook computers as “my lappy.” The computer has evolved into a digital pet of sorts, one deserving its own diminutive.
ASUS fueled the mini-laptop trend last June with its Eee PC. Less than a year later, a host of marketers are launching their own offerings. HP’s Mini-Note ($500) has all the usual laptop features in a size deserving of the “lappy” nomenclature.
IDC expects notebook shipments to rise 26% in 2008, reaching about 137 million shipments worldwide, up from 109 million in 2007. Desktops shipments, meanwhile, totaled 151 million in 2007, essentially flat at 4% growth.
While laptops now make up 42% of global shipments, at its current growth pace, laptops will surpass desktop sales by 2009. The result will be a vastly expanded marketplace presenting new opportunities for innovative marketers.
The shifting landscape has already changed the rules of the game. Dell, for example, has seen its share wither as the need to touch and feel notebooks before buying has become more important than was the case with desktop PCs.
And because the consumer is now at the forefront of computer trends, big business no longer dictates market direction, which also affects the performance of vendors like Dell who specialize in selling to businesses.
It also explains why the debate surrounding the MacBook Air’s introduction was at times so heated that many “hate” threads surfaced in user forums, a phenomenon first seen with the launch of the iPhone. Still, the market is poised for growth, particularly in these emerging segments:
Subnotebooks
The Apple MacBook Air ($1,800-$3,100) reflects a downsizing trend. Four years ago, the industry was awash in “desktop replacements.” Now, the market is steadily moving towards thin-and-light notebooks, which are defined as those weighing three pounds (1.4kg) or less.
Fashionista laptops
It used to be that laptops could either be had in black or, heaven forbid, beige plastic. Apple’s white iBook changed all that so now most manufacturers offer colors, metals and textures, as evidenced by one of Sony’s latest 2.6-pound (1.2kg) VAIO TZ92 models, which comes in black carbon-fiber “Mode Mesh.”
Luxury lappys
The luxury laptop trend got a turbo boost in January with the release of the first Penryn-based ASUS Lamborghini VX3, which boasts a 45-nanometer architecture to improve performance and battery life. The partnership between a luxury brand and a computer maker is a rare occurence today but is sure to grow as users begin to demand “where’s my Louis Vuitton lappy?”
Both the Apple MacBook Air and Sony TZ boast a new storage standard, an optional SSD (Solid State Drive or flash storage), which is on a trajectory to overtake hard drives within two years, primarily due to its lack of moving parts, a feature that increases speed and reliability.
Another trend, as exemplified by the ASUS VX3 pictured above, will be the quality and branding of accessories included with laptops. As manufacturers draw closer on the feature side, expect innovative brands to appeal to consumers with more eclectic packaging, giving lappy lovers one more reason to fall in love.
Ubertrends: Digital Lifestyle, Generation X-tasy
Value Propellants: Mobility, Connectivity, Convenience, Convergence, Freedom, Indulgence
February 25th, 2008
The death of Maharishi Mahesh Yogi on February 6 was a singular reminder of the magical transformation that has taken place over the western world’s meditative landscape since the Beatles discovered this remarkable mystic in the late 60s.
It was during the Maharishi’s early rise to fame that small yoga ads started appearing in such local alternative weeklies as The Village Voice in New York City. Fast forward to the decade of the aughts. After bubbling under the surface for more than 30 years, yoga’s popularity is surging.
Vancouver-based lululemon athletica, whose wares have been featured on “Desperate Housewives,” has seen sales double every year since it was founded in 1998, reaching $149 million for the 12 months ending January 2007. Its Omega logo is now the “Louis Vuitton” equivalent of yoga.
In a time-compressed world, its meditative powers are now appreciated by an estimated 16.5 million Americans who practice this 5000-year-old art, according to a February 2005 Yoga Journal/Harris Interactive study. That’s more than triple the number a decade earlier when a 1994 Roper poll found 6 million yoga practitioners.
Yoga has gotten so big there’s a demographic audience dubbed “Yoga Mamas” – a desirable marketing target due to its heavily networked nature, both in social and technology terms. Yoga Mamas and other devotees helped create a $1 billion yoga fashion apparel market.
The mainstreaming of yoga “street fashions” has floated the boat of lululemon athletica, the premier yoga apparel brand. On July 27, the company raised $328 million from Canada’s largest initial public offering in 2007. lululemon’s shares rose 56% on the first day of trading, jumping $10 to $28 on Nasdaq, giving the Vancouver-based company a market value of $1.9 billion. Its shares (LULU) now trade at $32, as this story is written.
That’s not a surprising given that women make up 77% of yoga practitioners. Young women also are the fastest-growing segment of yoga newcomers, according to a November 2004 Yoga Journal poll, with 18-to-24-year-olds who practice yoga rising 46% between 2003 and 2004.
This past June more than 800 yoga fans took part in the fifth annual “Mind over Madness” yoga spectacle in New York, proving that sanctuaries can be built even in the midst of turbulent Times Square.
Yoga retreats have become big business too. In New York, the Dream Hotel became the first hotel to feature a Deepak Chopra yoga studio directly attached to a hotel. Meanwhile, many resorts around the globe, like Mexico’s Maya Tulum, now offer yoga getaways for those who like to practice in exotic locales.
Vikram Chatwal’s Dream Hotel in New York offers a Deepak Chopra yoga studio for hotel guests. In 2006, Chatwal opened a second Dream in Bangkok.
Americans spend some $3 billion annually on yoga classes, equipment, clothing, vacations, videos and more, according to a Yoga Journal magazine study, fueled in part by aging baby boomers seeking less aggressive ways to stay fit. The trend has even spread to Apple’s iPod, which now adds appropriate music to your routine:
Yoga on your iPod? Why not? With PumpPod PumpedAsanas Level 3 (US$29) you can strike a warrior pose and learn its Hindu term to the beat of your favorite playlist. With more than 100 million global yoga practitioners and 120 million iPod and iPhone users, there’s bound to be a big intersection.
With the western world’s 450 million baby boomers increasingly looking eastward for contemplative inner peace, and Generation X and Y joining the flow, the yoga culture is certain to spread in decades to come.
Ubertrends: Fountain of Youth, Time Compression
Value Propellants: Strength, Flexibility, Youth, Relaxation, Escapism
February 18th, 2008
In 2003, The Yankee Group predicted in a report – entitled “The Death of the 30-Second Commercial” – that 11%, or $5.5 billion, of the $50 billion spent on TV advertising would be wasted, thanks to Digital Video Recorders (DVRs or PVRs).
“I think [TV advertising] really starts to be less effective as PVR penetration takes off, which we’re anticipating will occur over the next two years,” Aditya Kishore, The Yankee Group’s analyst who authored the report, was quoted as saying.
This week, The Nielsen Company said that playback from DVRs is actually increasing the amount of time people spend watching television, with viewing increasing 3% at 9:00 p.m. and 5% between 11:00 p.m. and midnight.
The periods compared were November 2005 and November 2007, during which time the DVR penetration level in Nielsen’s sample nearly doubled from more than 11% to nearly 22% in U.S. households.
TiVo, the company most identified with the DVR trend, has been unable to capitalize in any significant way on surging DVR sales. But its vaunted interface recently launched on Comcast cable TV in the Boston area, bringing hope to TiVo aficionados everywhere.
While Nielsen has yet to specify how much advertising DVR users are skipping, it appears that rumors of TV advertising’s imminent death may be premature.
February 14th, 2008
While it seems that every self-anointed sage and her brother had a list of predictions for 2008, savvy trendwatchers know that trends don’t adhere to calendar years. There’s one trend, however, that will reshape the U.S. market in the next year: HDTV. Most trends are initiated by human- or technology-related events, but this decade’s biggest media revolution is propelled by none other than the U.S. government.
The Federal Communication Commission (FCC) mandated that U.S. analog television broadcasting cease by February 17, 2009. Worried that unwitting consumers might be caught unprepared by this digital switch, the FCC also instructed stations to air ads to notify viewers of the impending change.
As a result, consumers will not be able to watch TV without hearing about the digital TV transition, and the remote possibility of losing reception after the switch.
A few days before the start of the Las Vegas Consumer Electronics Show (CES), Warner announced that it would support the Blu-ray format exclusively, virtually sealing the fate of HD-DVD and unlocking more hi-def sales. This will help such new players as the Philips BDP7200, which ships any day now for $400.
We say remote because the transition will only directly affect the 12% of U.S. TV households, about 13.5 million homes, that receive over-the-air broadcast signals, according to The Nielsen Co. The Consumer Electronics Assoc. (CEA) reported on December 28 that 50% of U.S. households, or 56 million, already own a digital TV set, virtually all of whom likely receive TV via cable or satellite.
Households that potentially could “go dark” have an option: continue watching an older TV with analog tuner and buy a converter box. The U.S. government will help people pay for converters, offering all households as many as two coupons, worth $40 each, to cover some of the price.
It’s a trend that perhaps arrived with the supermodels but thin is in. One big flat-screen phenomenon this year is the “thin bezel.” As the Toshiba XF550U shows, thinner bezels result in more attractive sets that offer far smaller footprints, another major motivation to upgrade.
So, it’s a safe bet that sales of digital TV converters will explode by year-end. Yet despite the fact that most U.S. households will be insulated from the February 2009 digital switch, the sheer noise generated by the media about the impending “death of analog” will lead many to consider buying a new digital TV or upgrading existing gear.
Surveys show that less than 20% of Nielsen’s 112.4 million U.S. TV households, some 18 million homes, actually watch HDTV today, either due to the complexities involved or because HDTV owners believe that watching DVDs constitutes “HD.” The media’s educational campaign is likely to help change that scenario, which is good news for marketers and broadcasters alike.
Marketers will profit because they will finally have an incentive to produce all their commercials in HD. Despite the fact that it’s not a technology player, Target was the first company to broadcast a TV commercial in native hi-def on January 23, 2005 during an episode of Desperate Housewives. Apple followed with an iPod ad in February, proving that being a trendsetting company does not a pioneering marketer make.
Next year, Pioneer plans to sell plasma displays that borrow ideas from this prototype shown at the Consumer Electronics Show this past January. The next-generation Kuro shown was 9mm deep, 2mm thinner than the iPhone.
The Super Bowl points to the shifts taking place due to HDTV’s growing popularity. The 2005 Super Bowl featured 28 high-definition TV commercials by our count. A year later that figure rose slightly to 30 HD spots, according to SPOTBOWL. In 2006, HDTV-native advertising made up 45% of Super Bowl advertising. By contrast the 2008 Super Bowl featured only four national TV spots broadcast in SDTV, out of a total of about 60 network TV commercials shown.
Surprisingly, one of the laggards included Victoria’s Secret, a company that could have materially benefited from an HD spot, given its superb placement in the final moments of a close game. A new U.S. consumer survey discovered that 5.5 million households purchased an HDTV set for the first time during the 2007/2008 holiday and Super Bowl season, boosting U.S. household penetration with at least one HDTV set to 25%, or 28 million.
Welcome to the real trend of 2008.
Ubertrends: Digital Lifestyle, Voyeurgasm, Generation X-tasy
Value Propellants: Experience, curiosity, convergence, indulgence, performance, reality
February 4th, 2008
