Customers now wary of security holes in connected devices, survey finds

We’re reaching the saturation point on smartphones, demand for tablets and TVs has turned sluggish, and people have grown concerned that connected devices (the so-called “Internet of Things”) may lay bare their personal data.

Those are the findings of a global survey of 28,000 consumers in 28 countries by management consulting company Accenture.

“The slowdown in the consumer technology market is irrefutable, serious, and global,” said Sami Luukkonen, the global managing director for the company’s Electronics and High Tech group, in a prepared statement. “The market is not about glitzy gadgets any more … As device demand tapers off, the industry needs to make a sharp turn toward providing innovative, value-added services that consumers are able to use with confidence.”

That last factor — confidence — is important in a vulnerable market, the company noted. Nearly half of the survey’s respondents (47 percent) said security concerns and privacy risks rank among the top three things keeping them from buying IoT services and devices, including smart watches, fitness monitors, and smart home thermostats.

Even those who choose to buy the devices say they feel they’re taking a risk. More than two-thirds (69 percent) said they know the products could potentially be hacked.

Among those who either own an IoT device or plan to buy one this year, more than a third (37 percent) report that they’ve decided they’re going to be more cautious in how they use them. Almost a quarter (24 percent) chose to postpone buying one as a result of security concerns. Nearly a fifth (18 percent) said they have stopped using their IoT devices because of these concerns.

As a result, Accenture said, the IoT market is largely flat. Just 13 percent of those polled said they planned to buy a smartwatch this year, an increase of just 1 percentage point from last year. Demand for a host of other gadgets has also stalled; about 9 percent of respondents said they planned to buy fitness monitors or other health devices, thermostats, or connected surveillance cameras — about the same as last year.

“Despite all its promise, the Internet of Things market has revealed itself to be a double-edged sword,” Luukkonen said. “The market opportunity is enormous, but security and ease-of-use concerns are hindering its near- and long-term potential.”

IoT device sales aren’t the only ones stagnating, the survey said, painting a grim picture of the mobile market, which the company says will continue to weaken throughout 2016. Less than half of survey takers (48 percent) said they plan to buy a smartphone this year (down six points from last year). Less than a third said they planned to buy a TV or tablet PC (30 percent and 29 percent, respectively). Those numbers were both down from 38 percent last year.

Above: The top four reasons consumers say they don’t plan to buy a smart phone this year in Accenture’s survey.

Image Credit: Accenture