The Home Tech Revolution Could Change Everything — Again

The shift toward home technology, accelerated by COVID-19, could have a long-lasting impact both for users and businesses.
Headshot of Ben Goldman
Benjamin Bertram Goldman
Expert Columnist
October 27, 2020
Updated: October 28, 2020
Headshot of Ben Goldman
Benjamin Bertram Goldman
Expert Columnist
October 27, 2020
Updated: October 28, 2020

This year, the number of smartphone users hit 3.2 billion, nearly half the global population. Mobile has propelled companies like Apple and Google to become some of the biggest businesses in the world, and resulted in the creation of an entirely new category of products and services that have transformed our relationship with technology and the world.

But while the smartphone has defined the last decade of consumer technology, there is good reason to believe that it won’t be what defines the coming decade. After years of accelerating sales starting in 2007, the smartphone market officially began to plateau around 2013. By the second quarter of 2019, the market was in decline, falling 1.7 percent, according to a report by Gartner.

Then came the coronavirus pandemic. Stay-at-home orders took effect worldwide, forcing the closure of offices, schools and businesses. In a matter of weeks, the entire concept of being mobile became less relevant. The market for smartphones dropped by more than 20 percent worldwide, according to the same Gartner report.

Just as the mobile market has leveled out, a different sector has entered a new era of growth: home technology.

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The Coming Home Technology Revolution

As more people spend time indoors, they’re increasingly turning their attention to the technology in their homes, not in their pockets.

In the first months of the pandemic, PC sales spiked by 11 percent compared to a year earlier. Meanwhile, sales of TVs — most of which are smart TVs — shot up an incredible 86 percent. And both Microsoft and Sony are gearing up to launch a new console generation that will put the equivalent of a high-end PC in the living room of millions of homes. From home networking equipment to over-the-top (OTT) streaming devices like Amazon’s Fire stick and Apple TV, nearly every area of the home is being revamped with powerful new devices.

This shift toward home technology, though supercharged by the pandemic, could have a long-lasting impact on consumer technology both for users and businesses.

 

What It Means for Users

From a user’s perspective, the shift to home technology has an upside. While smartphones have played a critical role in connecting more of the world to always-on internet access, it is inherently a technology defined by its constraints. Chief among these being the only non-negotiable characteristic of a smartphone: its size.

Because of the small-sized screen, and the assumption that a mobile user is “on the go,” simplicity and ease-of-use is prioritized above all. Compare any mobile app or website to its desktop counterpart, and what you’ll often find is a streamlined — read simplified — version of the experience. Information density is reduced, features pared down, and capabilities are limited to better suit the tiny palm-sized device. Even the long-hyped arrival of 5G internet speeds won’t change this one basic constraint.

In this way, mobile could be considered a step back in humankind’s relationship with technology. Rather than deepening our mastery over technology, mobile moves in the opposite direction — trading depth of experience for breadth of access.

While this is a trade the market has been eager to make, it’s not been without consequences. One report out of Australia pinned the blame on mobile devices for a decline in computer literacy among school-aged children back in 2015. A separate 2019 report by Common Sense Media highlighted that, despite today’s kids and young adults spending upwards of seven hours on smartphones a day, “use of digital devices for reading, writing, video chatting, or creating content remains minimal.” Rather, the vast majority of that time is spent watching videos, playing games, and interacting with social media.

This highlights a fundamental problem with mobile — due to its size constraints, smartphones encourage consuming, rather than creating. Eben Upton, technologist and founder of the Raspberry Pi Foundation, described the problem in an interview with the BBC by saying a mobile device “[doesn’t] encourage real computer literacy because there are missing rungs on the ladder between being a consumer and being a producer.”

As more users shift their time toward home computers, it could help restore some of the digital literacy that’s been conceded to mobile. And it could drive demand for more powerful, sophisticated, and enriching digital experiences at home — much in the same way that the possibilities of smartphones created a new market for mobile apps, products, and services.

 

Risks and Opportunities for Business

For businesses, the growth of home technology carries both risks and opportunity. After enduring a decade of digital disruption at the hands of mobile devices, many brands and businesses are only now beginning to develop confidence in their digital capabilities.

But the home technology revolution could generate another wave of disruption — and set off yet another mad scramble to compete on a new technological frontier. If the exponential curve of technological progress holds true, this frontier could again alter the power balance in the market while simultaneously opening up a vast new landscape of opportunity for those savvy enough to navigate it.

An industry that many are keeping an eye on is the nascent market for virtual reality (VR). Though VR has thus far failed to catch on in a mainstream way, that could change as a result of the COVID-19 pandemic, according to industry analysts. “I think we may look back on this and see it as an inflection point for the sector,” said interactive entertainment lawyer Kirk Soderquist in an interview with CNBC.

Behind their optimistic projections is the understanding that the increased time spent at home could change the equation for VR. Just as mobile makes the most sense for on-the-go users, VR makes the most sense for in-the-home users. It requires a level of immersion that simply isn’t feasible in public spaces. Similarly, many of its most compelling use cases — such as job training, live events, and even home fitness — make sense mostly if in-person isn’t an option.

But with more people spending time at home, and as the technology matures, many of VR’s use cases have become more relevant. “I definitely think COVID has shifted my outlook on some of this,” said Mark Zuckerberg in an interview with The Verge, shortly after the announcement of its Oculus Quest 2 VR headset. “The concept of remote presence with video is now much more mainstream than it was before.... And over the next few years, I think [VR is] going to just grow significantly faster.”

 

Entertainment Industry Likely the First to Be Disrupted

Like previous technological disruptions, the impact of the shift to home technology is likely to be felt first in the entertainment industry. As movie theaters remain closed around the world, companies like Disney and ViacomCBS have already announced ambitious reorganizations that will prioritize streaming.

But perhaps the biggest beneficiary will be gaming companies. Gaming has already experienced a boom during the pandemic, and both Sony and Microsoft are preparing to launch their next-generation game consoles into the market, just as the global population stares down a long winter indoors.

“As the ninth generation of consoles approaches,” wrote Kellen Browning of the New York Times, “the cancellation of in-person events has created a surge of interest in gaming and is likely to juice their sales — even as their availability is expected to be limited by supply chain problems caused by the pandemic.”

If gaming undergoes a period of exponential growth and development, the effects could spill over to impact the larger landscape of brands and businesses, especially if the recent trend toward more “metaverse”-style virtual experiences holds true.

The idea of the metaverse originated in science fiction, most notably Neal Stephenson’s Snow Crash, describing a parallel virtual world in which users inhabit their own avatars. But many Silicon Valley thinkers believe it to be the inevitable evolution of the internet. If attending school remotely, why navigate a clutter of apps, menus, Zoom calls, and Google Docs? Why not attend school as a virtual avatar, sit in a classroom alongside peers, and watch your teacher deliver a lecture “in person”? When shopping for new clothes, what if instead of browsing a website, you could try them on in a virtual mall?

The relationship between home technology and the metaverse is a strong one. At its essence, the metaverse is a more human and immersive conceptualization of the internet, one that makes the most sense when accessed from the controlled environment and powerful hardware of one’s home. And PC computers, game consoles, and VR headsets — all home technology — are more likely to provide the fidelity of experience necessary to make a metaverse appealing to early adopters.

And already we see some of the early signs that the metaverse may be coming to fruition. Epic’s hit game Fortnite, which started as a battle royale online multiplayer game, has since evolved to support its own marketplace, currency, and large-scale virtual gatherings — such as Travis Scott’s in-game concert, which drew in 12.3 million players. Epic CEO Tim Sweeney has not been shy about his ambitions to pivot Fortnite into a fully fledged metaverse. And the recent moves by several of the world’s largest companies into gaming — including Google, Amazon, and Facebook — hint at their interest in the future of the industry.

“Anyone raising an eyebrow that such serious uses for simulated worlds come from not-so-serious gaming roots should perhaps bring to mind the words of Chris Dixon of Andreessen Horowitz,” wrote The Economist in a multi-page feature. “‘The next big thing will start out looking like a toy.’”

Whether or not the metaverse is what emerges from the shift toward home technology, it is a strong example of the new types of paradigms that could be made possible. Home technology provides users with more depth, control, and immersion than what can be achieved on mobile. And there awaits a world of opportunity — and uncertainty — when the potential of these new technologies is finally realized.

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