2021
9
UK COVID-19 and Technology: A Year On Market Report 2021 Report
2021-06-29T04:03:43+01:00
OX1044913
2195
139822
[{"name":"Technology","url":"https:\/\/store.mintel.com\/industries\/technology"}]
Report
en_GB
“The pandemic has demonstrated the convenience and efficiency digital technologies can provide across consumers’ work, entertainment and shopping routines, and 2021 can cement their place as digital habits are maintained.

UK COVID-19 and Technology: A Year On Market Report 2021 Report

£ 2,195 (Excl.Tax)

Report Summary

Providing the most comprehensive and up-to-date information and analysis of the COVID-19 and Technology: A Year On market, including the behaviours, preferences and habits of the consumer.

Time spent at home during the pandemic has increased the consideration given to technology products, including those that many people may not have previously considered buying, such as smart home devices. Just 10% say they owned a smart thermostat prior to the pandemic, however 16% who don’t own one think they would be interested in buying one in the next 12 months.

Similarly, 8% say they owned a smart home security product (eg a Ring doorbell) before COVID-19, but 19% say this is something they would consider buying in the next 12 months. Although the closure of retail had a detrimental effect on purchasing, with consumers unable to see devices in person for long periods during the pandemic, digital services such as mobile apps for commerce and gaming have seen greater traction. Meanwhile, video calling was instrumental in connecting friends and families in lockdown. The pandemic has ushered in a new era of digital literacy, and tech adoption, especially for older consumers, which can be a platform for technology products and services to build on with this demographic.

However, COVID-19 saw supply chain issues such as factory closures in the early stages of the pandemic impact on sales of devices such as computers, TVs smartphones, and there is a legacy of ongoing disruption in the form of a global shortage of semiconductors used in electrical goods and technology as a result of that early disruption and increased demand throughout the pandemic. This will likely continue meaning the supply of PCs, Laptops, phones and gaming consoles will still suffer through 2021 and potentially could mean higher prices for consumers at the checkout.

Time spent at home has meant technology products and services have had an increased importance in people’s lives. From voice interactions to online shopping, usage of technology can grow from a platform of increased confidence and habitual use. This can be a driver to add additional tech products to the household such as smart home devices as well as drive digital upscaling, for instance moving to faster broadband connections. Health and wellbeing will also be at the forefront of people’s minds, meaning tech supporting these areas such as wearables and apps and services will continue to gain in popularity.

Read on to discover more details or take a look at all of our Technology market research.

Quickly understand

  • The impact of COVID-19 on the technology market and what the sector’s recovery will look like.
  • How COVID-19 shaped consumer behaviour.
  • Who the winners and losers were from the pandemic.
  • How the pandemic will shape consumers’ behaviour and their future technology purchasing habits.
  • What products and services consumers used during the pandemic and which products and services will see greater use and prominence post pandemic.
  • COVID technology report.
  • Technology market trends.

Covered in this report

Brands: Apple, ARCall, Amazon, WhatsApp, Facebook, Google.

Expert analysis from a specialist in the field

Written by Joe Birch, a leading analyst in the Technology sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The pandemic has demonstrated the convenience and efficiency digital technologies can provide across consumers’ work, entertainment and shopping routines, and 2021 can cement their place as digital habits are maintained. Demand for technology hardware such as smartphones, computers and gaming consoles has been high, despite chip shortages affecting supply; a factor that will continue to affect the sector through 2021, as manufacturing struggles to keep up with demand.

Joe Birch
Consumer Technology Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: Market context
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • Impact of COVID-19 on technology
      • Figure 1: Short-, medium- and long-term impact of COVID-19 on Technology category, April 2020
    • The market
    • Positive year for the technology sector despite early shocks to shipments and consumer confidence
    • Service providers see continued slowdown in revenues despite increased importance in pandemic
    • Bundles suffer due to falling prominence of fixed and mobile voice
      • Figure 2: Market size and forecast for technology service providers, 2015-25
    • Spending on digital goods and services soared to new highs in 2020
    • Gaming enjoys a strong year on back of robust console sales
      • Figure 3: Market size and forecast for digital goods, 2015-25
    • New gaming console releases demand outstrips supply
    • Disruption in chip manufacture also set to put a dent in the market
      • Figure 4: Market size and forecast for technology hardware, 2015-25
    • The consumer
    • One in five bought a smartphone during the pandemic
      • Figure 5: Technology devices bought since COVID-19, April 2021
    • Technology enabled modification of behaviours during COVID-19
    • 2020 was the year of the video call
      • Figure 6: Technology activities undertaken since COVID-19, March 2021
    • Spike in sales of home office essentials triggered by new stay-at-home routines
    • At-home lifestyles drive wireless headset purchasing
      • Figure 7: Technology purchasing habits pre and post-COVID-19 March 2021
    • COVID-19’s legacy will be more interaction with health and wellness technology
      • Figure 8: Interest in future use of technology apps, services and devices, March 2021
  3. Category Winners and Losers

    • Software and digital services played a significant role during the pandemic
    • Gaming consoles saw dramatic increase powered by flagship console releases
    • Spike in sales of devices to aid working from home routines
    • Wearable tech and online fitness services benefit as gyms shut
    • Voice controllers benefit from stay at home routines
    • Digital payments and QR codes beneficiaries of a non-tactile world
    • Smartphone market suffers slowdown due to closed retail opportunities
    • Mobile network providers also see drop-off in revenue
    • Despite reliance on broadband during pandemic bundled communication providers did not see much benefit
  4. How The Pandemic Unfolded

    • Phase 1 – January-March: Consumers go into lockdown
    • Phase 2 – March-June: Adapting to life in lockdown
      • Figure 9: Recorded daily number of confirmed cases of COVID-19 and deaths registered as relating to the virus, 31 December-5 November 2020
    • Phase 3: Emerging from the initial lockdown
    • Phase 4: Rise of the next wave
      • Figure 10: Recorded daily number of confirmed cases of COVID-19, 30 January 2020-28 March 2021
    • Phase 5: January-March – Winter lockdown and vaccine rollout
      • Figure 11: Cumulative number of first and second vaccines delivered in the UK, 10 January-9 May 2021
    • Phase 6: March onwards – The Roadmap out of lockdown
  5. The Post Pandemic Outlook for Technology

    • Ongoing supply chain issues will hamper technology market’s recovery
    • Apple’s rebound in 2021 shows signs of pent-up demand being realised
    • PC and laptop market can remain buoyant on the back of strong finish to 2020
    • TVs have a timely opportunity for boosting sales
    • Niche technologies can see greater prominence in a post-pandemic world
    • Online learning and EdTech can see further growth
    • Increase in pet ownership during pandemic can create valuable opportunities for pet tech
    • COVID-19 can help propel more streamlined and mindful use of technology
    • Relaxation of restrictions on real world activities could see tech take a back seat
  6. The Economic Impact

    • A record drop in economic activity…
      • Figure 12: Annual percentage change in GDP, 2007-25 (fore)
    • …as COVID-19 restrictions caused a severe fall in spending
    • Consumer spending is heavily dependent on the path of the pandemic
      • Figure 13: Household consumption index, 2019-25 (scenario forecasts)
    • Furloughs have saved millions of jobs…
      • Figure 14: Number of employments furloughed, time series, March 2020-February 2021
    • …but unemployment is forecast to rise when state support ends
      • Figure 15: Quarterly unemployment rate, Q1 2008-Q1 2026 (fore)
    • Under-25s have taken the brunt of COVID-19 job losses
      • Figure 16: Change in number of employees on payroll, by age, February 2021 vs February 2020
  7. Market Size and Performance

    • Effect of COVID-19 on the technology sector
      • Figure 17: Short-, medium- and long-term impact of COVID-19 on Technology category, April 2020
    • Positive year for the technology sector despite early shocks to shipments and consumer confidence
    • As the pandemic wore on, returning consumer confidence helped technology sector rebuild
      • Figure 18: Market value of technology hardware, 2015-25
      • Figure 19: Market value of digital goods, 2015-25
      • Figure 20: Market value of technology service providers, 2015-25
  8. Market Forecast

    • Service providers see continued slowdown in revenues despite increased importance in pandemic
    • 5G’s slow burn may mean chances of growth inhibited
    • Despite greater reliance on broadband, revenues were likely flat during 2020
    • Bundles suffer due to falling prominence of fixed and mobile voice
      • Figure 21: Market size and forecast for technology service providers, 2015-25
    • Spending on digital goods and services soared to new highs in 2020
    • Gaming enjoys a strong year on back of robust console sales
      • Figure 22: Market size and forecast for digital goods, 2015-25
    • Hardware sales remained resilient despite stock shortages and store closures
    • New gaming console releases – demand outstrips supply
    • Disruption in chip manufacture also set to put a dent in the market
      • Figure 23: Market size and forecast for technology hardware, 2015-25
  9. COVID-19 Scenario Performance

    • Mintel’s approach to predicting the impact of COVID-19
    • Fundamental differences in how COVID-19 is affecting consumer markets
    • The risk of vaccine-resistant strains of COVID-19 adds huge uncertainty
    • COVID’s trajectory unlikely to have a great effect on market value of technology service providers
      • Figure 24: COVID-19 scenario forecast for technology service providers, 2015-25
    • Prolonged COVID disruption could see digital goods’ prominence continue
      • Figure 25: COVID-19 scenario forecast for digital goods, 2015-25
    • Rapid COVID recovery could foster a tech sales spike
      • Figure 26: COVID-19 scenario forecast for hardware, 2015-25
    • COVID-19 market disruption: risks and outcomes
      • Figure 27: Summary of Mintel scenario expectations and the impact on the consumer technology market, March 2021
  10. Consumer Concerns over the Impact on Health

    • Exposure anxieties align with case numbers
      • Figure 28: Mintel COVID-19 exposure anxiety and lifestyle impact index, 28 February 2020-26 March 2021
    • Exposure anxiety typically higher among over-55s
      • Figure 29: Proportion of adults indicating higher levels of anxiety (‘4’ or ‘5’) towards being exposed to the coronavirus, by age, 28 February 2020-26 March 2021
    • Middle-age band fear transmitting virus
  11. Consumer Concerns over the Impact on Lifestyles

    • Concerns about lifestyles impact outweigh exposure fears
    • Consumers react to unprecedented lifestyle restrictions
      • Figure 30: Mintel COVID-19 exposure anxiety and lifestyle impact index, 28 February 2020-12 March 2021
    • Lifestyle impacts concerns high across all age groups
      • Figure 31: Proportion of adults indicating higher levels of anxiety (‘4’ or ‘5’) about how the outbreak could impact their lifestyle, by age, 28 February 2020-26 March 2021
  12. Impact on Household Finances

    • Financial wellbeing has hit new heights despite the crisis…
      • Figure 32: The financial wellbeing index, January 2015- March 2021
    • …but many still feel worse off than a year ago
      • Figure 33: Changes in household finances, January 2015- March 2021
    • One in six have been furloughed at least once
      • Figure 34: Impact of COVID-19 on employment and working patterns, February 2021
    • Income trends point to a two-track crisis and recovery
      • Figure 35: Impact of COVID-19 on personal income, February 2021
    • Cuts to discretionary spending have kept household finances afloat…
      • Figure 36: Impact of COVID-19 on household debts and spending, February 2021
    • …and led to a record savings boost
      • Figure 37: Impact of COVID-19 on the value of savings in different products, February 2021
    • Most are optimistic about the year ahead…
      • Figure 38: The financial confidence index, January 2015-March 2021
    • …and looking forward to getting back to experiences
      • Figure 39: Financial priorities when COVID-19 is no longer a concern, February 2021
    • As pandemic’s threat subsides, intention to spend on technology stays stable
      • Figure 40: Spending intentions compared to the start of the outbreak, technology and communications,
  13. How the Pandemic Shaped Consumer Behaviour

    • One in five bought a smartphone during the pandemic
      • Figure 41: Technology devices bought since COVID-19, April 2021
    • New smartphone purchasing down on previous years in 2020 though overall demographic penetration up
    • Games consoles and TVs could see further sales boost in 2021
    • Next generation consoles can drive 4K TV sales
    • A marquee year of delayed sporting action can be another boost to the TV market
    • Summer of sport can be a driver of TV upgrades
    • Consumers’ financial situations can be a springboard for big tech purchases
    • Technology-enabled modification of behaviours during COVID-19
    • Smartphones’ ubiquity meant it was a key platform for consumer spending
      • Figure 42: Smartphone and tablet behaviours, April 2019,- September 2020
    • Older consumers will be more important targets for tech brands post pandemic
      • Figure 43: Trends in consumer behaviour in the pandemic, April 2020- April 2021
  14. The Consumer – Key Takeaways

    • 2020 was the year of the video call
    • Uptake in smart speaker sales also contributed to increased connectivity
    • Spike in sales of home office essentials triggered by new stay-at-home routines
    • COVID-19’s legacy will be more interaction with health and wellness technology
    • Younger people and those struggling financially may benefit from tech that helps with mental health
  15. Technology Activities During COVID-19

    • 2020 was the year of the video call
      • Figure 44: Technology activities undertaken since COVID-19, March 2021
    • Still scope for simpler solutions for older disengaged tech audiences
    • Video calling as an experience will likely become more refined and personal
      • Figure 45: Use of video calling since COVID-19 by generation, March 2021
    • Technology services help provide a local connection for communities during COVID-19
    • Local focus will continue to be important for brands
    • Voice search can open up possibilities for local businesses
  16. Technology Purchasing Pre and Post COVID-19

    • Spike in sales of home office essentials triggered by new stay at home routines
      • Figure 46: Technology purchasing habits pre and post-COVID-19 March 2021
    • Office peripherals bounce likely to be sustained in 2021
    • At home lifestyles drive wireless headset purchasing
      • Figure 47: Wireless headset or headphones purchasing habits post-COVID-19 March 2021
    • Stay-at-home routines likely to drive further interest in smart home devices
  17. Post Pandemic Technology Habits

    • COVID-19’s legacy will be more interaction with health and wellness technology
      • Figure 48: Interest in future use of technology apps, services and devices, March 2021
    • Health monitors for vital signs can draw in older audiences longer term
      • Figure 49: Interest in future use of health apps and services, by age, March 2021
    • Technology will have a role to play in battling COVID’s lasting impact on mental health
    • Younger people and those struggling financially may benefit from tech that helps with mental health
    • Online tools can help consumers proactively manage their mental health
  18. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  19. Appendix – Central Forecast Methodology

    • Market forecast and prediction intervals for the Technology sector
      • Figure 50: Lower bound, central and upper bound forecast for technology Service Providers, 2020-25
      • Figure 51: Lower bound, central and upper bound forecast for digital goods, 2020-25
      • Figure 52: Lower bound, central and upper bound forecast for hardware, 2020-25
    • Covid Scenario Performance Methodology and Assumptions
    • Scenario Performance for Technology Service Providers
      • Figure 53: COVID-19 scenario forecasts for technology service providers, 2020-25
    • Scenario Performance for Digital Goods
      • Figure 54: COVID-19 scenario forecasts for digital goods, 2020-25
    • Scenario Performance for Hardware
      • Figure 55: COVID-19 scenario forecasts for hardware, 2020-25
    • Rapid COVID recovery, central and extended COVID disruption scenarios outline
    • Scenario Methodology
    • Market drivers and assumptions
      • Figure 56: Key drivers affecting Mintel’s market forecast, 2020-24 (prepared 12 March 2021)
    • Forecast methodology

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