Insight

Tech & Teleco Category Insights

February 22, 2021
by FOX Portfolio Strategy & Solutions

Every month the FOX Portfolio & Solutions team will bring you strategic marketing intelligence, insights, and solutions that focus on your brand needs and marketplace trends. This month’s update focuses on the Tech & Teleco Industries and shares some key findings on the latest trends, biggest headlines, what’s new in the industry and how your brand can break through with the power of the FOX Portfolio. Below you’ll find the Tech & Teleco Category Insights Newsletter including:

  • 2020 Review
  • 2021 Outlook
  • Key Trends
  • CES 2021 Themes
  • New CES Products

2020 review

The tech & telecom industry fared relatively well, particularly those that benefited from the pandemic such as video, gaming, social media, cloud, and e-commerce. However, these gains did not translate to higher ad dollars.

Wireless

2020 was marked by share shifts in telecom. T-Mobile surpassed AT&T as the second largest carrier following the closing of the Sprint acquisition. Dish entered the market with the purchase of Sprint’s Boost Mobile and other prepaid brands. While still small, cable companies like Comcast and Charter are scaling their wireless offering by bundling it with their core broadband and cable services. The Big 3 wireless players (also the top category spenders) reduced their combined national TV spend by -26% YoY1 in 2020 in part due to COVID-19 and the retirement of Sprint brand.

Devices

Demand for PCs, tablets, TVs, and wearables surged with people stuck at home. Following three consecutive quarters of weak demand, US smartphone sales got a boost in 4Q with the launch of the highly-anticipated 5G iPhone 12 lineup. Google stayed relatively quiet in the hardware front, announcing its flagship phone Pixel 5 and the lower-priced Pixel 4A in October with very little national TV push. Amazon Echo only released a series of updated products although it continues to dominate the US smart speaker industry.

Consoles

Gaming not only became a very popular activity for many during quarantine, but Sony and Microsoft also ushered in their next-gen consoles. However, due to strong demand and major supply shortages, there was very little TV marketing for both the Xbox Series X/S and PS5.

2021 outlook

Stable Wireless

With the market shifting from four national players to three, overall competition could be less intense. Verizon and AT&T are expecting 2-3% wireless service revenue growth in 2021. The battle over 5G dominance should continue as the Big 3 articulate the benefits of their network and the need for consumers to upgrade. Prepaid market could see bigger changes with Verizon’s pending acquisition of the largest prepaid service, Tracfone, Dish’s entry into the market, and the recent sale of Consumer Cellular to private equity firm GTCR.

Better Productivity Tools

Zoom became the go-to video conferencing platform in 2020 but competition is heating up. Microsoft CEO Satya Nadella says 2021 will be the year of Microsoft Teams, with a vision to turn Teams into a “digital platform as significant as the internet browser.” Salesforce recently announced the acquisition of Slack.

Cloud Migration

While growth in cloud computing has been a trend over the past decade, the pandemic further drove enterprises toward cloud, cementing the clout of leading platforms like Amazon AWS, Microsoft Azure, and Google Cloud. Cybersecurity will be even more critical with increased cloud usage.

TV Dollars Rebound

Magna is forecasting Tech & Telecom national TV ad spend to grow +7% in CY2021, following a decline of -10% in CY2020.

CES 2021 Themes

Power of 5G

  • While 5G is still in the buildout phase, 2021 is expected to be an inflection year as network infrastructure is more developed, 5G devices become more available and software and service providers showcase business and consumer applications.
  • During his keynote address, Verizon CEO Hans Vestberg spoke about 5G use cases across sports, education, connected communities and live music by announcing partnerships with the NFL, UPS, Live Nation, The Met and the Smithsonian. For example, Verizon committed to deploying 5G Ultra Wideband in 28 NFL stadiums by the end of 2021. Skyward, Verizon’s commercial drone unit, is working with UPS Flight Forward to test 5G connectivity for delivery of retail products via drones after trials last year using 4G LTE.

Smarter Homes

  • With more time spent at home, the smart home category came into particular focus during CES. There were smart pillows, automated home recycling system, smart beds, touchless connected doorbells, and even more smart appliances.
  • With its vision of ‘Better Normal for All,” Samsung introduced innovations centered around personalized experiences to transform everyday life into an extraordinary experience. New products showcased include SmartThings Cooking app that pairs with Samsung’s Family Hub refrigerators, AI appliances and robotic house cleaners. It also expanded its Smart Trainer, a feature within Samsung Health that works with Samsung smart TVs and a webcam to track workouts.

Health Tech in Focus

  • The pandemic pushed the healthcare industry to accelerate the use of digital health technologies and remote care solutions. At CES, health and wellness offerings range from smart masks to health tracking apps and devices to remote patient monitoring.
  • Philips focused on solutions to better manage healthcare at home, including an app-connected Sonicare Prestige 9900 toothbrush, fetal monitors, and a sleep apnea support. LG showed a wearable air purifier and a lightweight air cleaner for a desk or car. Legacy companies like NordicTrack and Bowflex unveiled a new treadmill and a new
    smart mirror, respectively.

New CES Products 2021

Samsung held a virtual Unpacked event to launch its new flagship Galaxy line, the S21, S21+ and S21 Ultra 5G. The most notable difference from last year’s S20 is the $200 price cut. Starting at $799/$999, the S21/S21+ is designed “to empower you to express yourself and live your life exactly how you want” with a new immersive display, a pro-grade camera system and an all-day intelligent battery. The top-of-the-line S21 Ultra 5G (starting at $1,199) has a more powerful processor with an S Pen support. Samsung also announced the Galaxy Buds Pro, the next generation of earbuds with “the most intelligent active noise cancellation.”

Dell announced a flurry of new products centered around business clients, collaboration, productivity and gaming. The 2-in-1 Latitude 9420 adds a SafeShutter feature that automatically opens when webcam is in use and closes when logging out of video chat. Dell also introduced new monitors designed for video conferencing with dedicated Microsoft Teams button and a modular all-in-one PC (OptiPlex 7090 Ultra) that slips into a monitor stand designed to save space. In addition, Dell highlighted the sustainability of its product line. For 2021, the company is integrating bioplastics such as recycled carbon fiber and byproduct waste into the lids of its new Latitude 5000 series and Precision 3560.

With its CES theme of creating, collaborating and connecting people no matter where they are, HP announced new work laptops, monitors and its first wireless earbuds. The new Elite Dragonfly Max business laptop has a 5MP webcam and extra mics for better audio and video quality during video conference calls. A consumer laptop aimed at creatives, the refreshed HP Envy 14 laptop includes AI Noise Removal to intelligently mute background noise and Enhanced Lighting to brighten a person’s face in video calls.

LG teased the LG Rollable, a device whose screen can expand to a tablet and roll up to a standard-sized smartphone, with little information offered. LG also unveiled a transparent TV, a 55” OLED with 40% transparency that allows the display to be see through when on or off.

1Source: Lake 5 based on Nielsen + SMI

Be on the lookout next month for our Healthcare Update.

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