Longer CE Product Lifecycles Need Not Mean Less Revenue

The days of consumers upgrading their devices for more storage, more megapixels and more features are coming to an end (see Exhibit 1). Ushering in this change is ubiquitous connectivity—a trend Yankee Group refers to as Anywhere— that provides manufacturers with a distribution channel for software and fi rmware upgrades to their installed base of products. In many cases, CE manufacturers have served as stewards for this, introducing CE devices powerful enough to encourage satisfi ed users to make those connectivity-enabled upgrades for years to come.

Yankee Group believes that form factor will continue to play a primary role as a competitive differentiator—not an upgrade motivator. Instead, attractive, connected, storage-rich devices that consumers can upgrade to the most cutting-edge user experience and applications will fi nd the most success with buyers seeking more than entry-level products.