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issue: May 2003 APPLIANCE European Edition

Guest Editorial
Europe’s Multidevice Brand Battle

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by Paul Jackson, analyst, Forrester Research

Today’s consumers often buy technology as single items, and each device comes with its own uses, benefits, and brands. However, tomorrow’s consumers will look holistically at their technology buying: An increase in communication between devices will drive a blurring of physical device boundaries. Sony is the only major brand manufacturing and marketing a multidevice vision today, but even Sony’s strategy won’t be enough to win the hearts, minds, and wallets of tomorrow’s multidevice consumers.

Paul Jackson, analyst, Forrester Research

Five years ago, sending e-mail via TV or using a PC to play DVD-based movies was science fiction, but this functionality is now commonplace. This blurring of device use will increase as more and more devices work together or have overlapping functionality. This creates flexibility but, critically, makes buying decisions and brand loyalty much harder for consumers. The future will see more consumers buying technology that fits into their overall technology universe rather than following the device-by-device buying decisions made today.

For now, we can broadly group consumer technology into three segments: mobile technology and telephony; TVs and home entertainment systems; and PCs and peripherals. Few of today’s consumers (9 percent) own eight or more core devices from these three areas, and those that do exhibit typical early-adopter characteristics are young, male, high-income technology optimists.

As technologies like wireless networking, mains ring networks, and Bluetooth become increasingly popular, interconnections between devices will increase. PCs will communicate with home entertainment systems; mobile phones will sync with iDTV sets; and digital home hubs will seamlessly distribute content—be it a TV program, MP3, or address book. The result: Consumers will look at technology buying holistically, selecting technology brands that fit into their technology universe.
When positioning consumer technology holistically today, Sony stands out as a clear leader in terms of both technology portfolio and consumer trust. Sony has near universal recognition, the highest trust rating, and is second only to Philips for ownership.

Sony has good coverage in each of our three segments. Although mobile used to be the weak spot, the Sony Ericsson alliance has considerably strengthened this position. Compare this with Philips—Sony’s closest rival in Europe—which has stronger coverage in the TV and home entertainment world but little presence in the PC or mobile business. No other tech manufacturer measures up to Sony on both portfolio breadth and consumer trust.

In addition to running highly successful marketing and advertising campaigns for distinct brands like PlayStation, WEGA, Walkman, Discman, Cleo, and VAIO, Sony drives an overarching vision under its “Go Create” banner. This is aided by its emphasis on the virtues of connecting technologies like the multiproduct memory stick storage device or iLink connectivity, Sony’s version of Firewire.

Even Sony doesn’t hold all the cards needed to win the minds of future multidevice consumers—yet. All manufacturers, including Sony, will have to convince skeptical mainstream consumers that they can deliver on the promise of an interconnected “digital home.” As well as having implications for the design, packaging, and deployment of the technology itself, this battle will also extend into the control of digital content—playing to consumers’ ultimate use of digital technology. Future multidevice visions will need to be based on the following four core principles: use easy interconnection and standard formats; develop and deploy new devices quickly; offer easy creation and distribution of content; and give mainstream consumers feature/price tradeoffs.

Partnerships between manufacturers can just as easily win the multidevice technology brand battle by combining the core principles with the following vision. The ability to bring the right combination of features and price to market—based on all-important open standards for interconnection and content distribution—will be crucial for winning mainstream multidevice consumers. Best-of-breed manufacturers in mobile, TV, and PC technology must bring their individual manufacturing and product design expertise together to meet these needs.

First and foremost, brand partnerships need to be built on trust—between the manufacturers and their consumers. By analyzing the trust consumers place in major technology brands and looking at the shared trust consumers have in groups of brands, synergistic partnerships emerge.

Philips, Siemens, and HP make the strongest three-way team. This combination of brands from each of the three core product categories yields one of the highest combined trust scores. The presence of two strong European brands is a particularly compelling aspect of this partnership for European audiences.

Nokia and Philips have the best chance of pulling off a duet. Philips and Nokia would be a pairing that consumers would trust to bring an overarching multidevice brand to market. The potential downside here is that both of these manufacturers are light in the PC space. However, they could use a new multidevice brand to launch a white-label PC portfolio that could fill this gap.

Many superficially attractive combinations will never fly. A grouping like Apple, Nokia, and Panasonic—for example—has all the consumer technology needed to build a multidevice portfolio, but deeper investigation uncovers very little shared trust among consumers. PC brands like Apple are among the brands least trusted by European consumers; despite Apple’s focus on design, quality, and innovation.

About the Author

Paul Jackson is a senior analyst for Forrester’s European Technographics group based in Amsterdam. He focuses on understanding how European consumers perceive, adopt, and utilize new technologies. Prior to joining Forrester, Mr. Jackson worked for HHCL Ltd., a full-service advertising agency in London, and also spent 5 years as a management consultant with Deloitte Consulting and Logica Business Consulting.


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