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Effect of the CE Digital Experience Gaps

Forrester Reserach notes that digital devices were a big hit over the holidays. Big-box retailers like Best Buy sold a boatload of HDTVs, digital cameras, and MP3 players. But consumers who purchase these products don't necessarily buy the content and services to accompany them, creating vast digital experience gaps that leave $3.8 billion in revenue on the table for CE companies.

The digital experience gaps faced by today's consumers mean unrealized revenue for technology manufacturers, service providers, and retailers, as well as frustration, confusion, and unrealized digital potential for consumers. While 14.6 million US households own HDTV sets, only 50 percent of them subscribe to HDTV service. This means that half of the households that are equipped to enjoy HDTV service have underused devices, and this translates into $876 million of lost revenue for firms. Similarly, 43 million US households own digital cameras, but only two-thirds of them print digital photos; firms lose $813 million from this digital experience gap.

According to Forrester, device manufacturers, service providers, and retailers must overcome three major flaws that currently cause these digital experience gaps:

* Manufacturers produce standalone products. Chances are high that consumers who reside in a digital home won't have bought all of their products from Sony, Apple, or Microsoft. The complexity of linking products -- from the same or different manufacturers -- and filling them with content or services means that a flummoxed consumer might just give up on product-service-content integration altogether.

* Service providers struggle to serve countless devices. Service providers that enter today's digital home will be faced with more devices than they can control via their proprietary network, and this problem will continue to worsen as consumers acquire more devices. Providers put the burden of service-device integration on the consumer, who is often ill-equipped or not motivated to deal with the process.

* Retailers sell devices, not solutions. Retailers -- especially the big-box variety like Circuit City and Staples -- most often sell products a la carte, rather than presenting them as a part of a whole, and these are the same products that manufacturers produce as standalone devices. Almost entirely ignoring the content, service, and connection components of digital device ownership, the retailers compete on providing low prices and a wide selection instead of providing digital experiences.

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