Are we suffering a confidence gap?
Posted by Jon Peddie on November 9th 2013 | Discuss
We seem to be an industry of extremes, and short memories
When Apple started the tablet craze, the industry was doubtul. The commenting classes dismissed it as a big iPhone and called it a loser, until they didn’t after seeing the phenomenal sales. Proving once again the pundits don’t really know what consumers want after all, despite all their authoritative statements.
Now they tell us the PC is dead, PC gaming is dead, consoles are dead, TV is dead, and as far as I can tell, everything except smartphones are dead or dying. Never mind that millions of the dead things are being built every month.
But it’s not about the numbers, which reflect what was shipped, it’s about the trends. That’s what the pundits and Wall Street sharpshooters are interested in.
To predict a trend (which is usually done by looking at what was shipped), one has to have confidence. Confidence in themselves to be able to make, and defend a prediction, confidence in the technology’s ability to meet the needs and aspirations of consumers, confidence in the manufacturing and supply chain for the product or category, confidence in the economy, and confidence in the consumer’s behavior. That’s a lot of confidence needed to predict a trend.
It’s not just pundits and reporters who predict trends, though; manufacturers and resellers have to make predictions about the products they introduce to the market. And consumers have to make predictions because they want to buy products that will make sense into the future. The builders and resellers back up their predictions with money— they buy parts, hire labor, and open factories. The resellers buy inventory, build display rooms and warehouses, and hire people.
Consumers predict trends in forums, in social media, email, and tweets. The consumers seldom get it right when they are predicting other people’s behavior, and often do just the opposite of what they predict. And yet, they are usually so confident of their predictions they put their own money down for a product.
There’s also a confidence index, where consumers and businesses are surveyed about how they feel about their lives and the economy. That index has an interesting positive feedback aspect to it in that it becomes somewhat self-fulfilling. If the confidence index is reported as being up, then it makes people feel more confident about the economy and so they spend a bit more than they might have otherwise.
As of right now, U.S. consumer confidence is at a six-year high, and Europeans are also more upbeat. The U.K. in particular is very upbeat right now, predicting it will have the fastest growth in the West.
So with all that confidence, and trend-spotting, why are our industry publications still predicting doom and gloom for everything except smartphones? I think it’s a lack of confidence. Confidence in the sectors, in the companies, and in the consumers. I also think many of our trend-spotters and soothsayers are stuck in 2013 and not really looking forward, they’re looking backward. At best, they are not looking far enough forward.
So my advice is to ignore the bone-rattlers and tea-leaf readers and trust your instincts. Do you feel confident about the economy, the industry, and the upcoming holiday season? Are you in the market for a new convertible tablet/notebook, a new phone, a new game console, a new 4K TV, or maybe even a new desktop/side PC? Do your research, then go with that feeling and don’t wait for “the right moment.” There will always be a right moment in the future, and if you keep waiting for it you’re not going to get anywhere. Have some confidence in your confidence.