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NPD: Internet Access, Speed Impact Consumer Electronics Ownership, Including Smart 4K TVs
February 9, 2023
Internet access and speed are key to determining the amount and type of consumer electronics devices in U.S. homes, including connected 4K UHD TVs, according to new data from The NPD Group.
While household internet and speed can vary widely from state to state, or even county to county, there are a number of consumer electronics devices that have reached parity levels among connected households in rural and urban U.S. markets. Those include TVs, video game consoles, smart watches, activity trackers and tablets, according to NPD.
However, NPD found that wider gaps exist in ownership levels of devices that are more dependent on an internet connection, such as 4K UHD TVs, where a broadband connection is required for high-definition streaming, and smart home devices, where higher download speeds are needed for live video streams.
In the United States, 50% of households do not currently have a broadband connection (25Mbps per second download speed or greater). In addition, 15% of homes in the United States have no internet access, while 10% use a smartphone-only solution. Based on NPD’s findings, this lack of internet access or lack of internet speed has the biggest impact on rural markets. As a result, in rural markets ownership of 4K TVs and home automation products have trailed ownership levels reported in urban areas.
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While other factors also influence the CE ownership gap, such as income levels, one theme that is consistent across 4K TV ownership for connected households in rural and urban markets is that as home internet download speeds increase, so too do household ownership levels. The same can be said of smart home devices, such as internet security cameras that require higher download speeds.
“Consumers with slower internet speeds have less incentive to purchase 4K TVs,” Eddie Hold, president of NPD Connected Intelligence, said in a statement.
Hold said consumers with slow ISP speeds present a challenge for manufacturers that need usage data and advertising revenue to help sustain manufacturing.
“The internet is essentially the lifeblood of all consumer electronics products,” he said. “Understanding where coverage gaps exist can help explain trends and identify future opportunities.”