For technology-based products, the product life cycle — from birth to decline — tends to be finite. Indeed, industry trends often affect individual companies. For further insights, we examine the shifting consumer electronics marketplace.
To learn more about industry cycles, click here.
Phones and Music: The Shifting Consumer Electronics Marketplace
In this post, we review two industries under pressure from evolving technology. (1) Landline phones. (2) CD music. Within both sectors, declining sales continue. Due to smartphones and music streaming. Despite the current declines, landline phones and CD music witnessed a great run.
During the 20th century, landline phones accounted for most telephone equipment usage. However, in the 21st century, landline phone use keeps falling. As Felix Richter reports for Statista:
Smartphones have become a constant companion for most people in the United States. As a result, landline phones are rapidly losing their relevance. In 2004, more than 90 percent of U.S. adults lived in households that had an operational landline phone – now it’s less than 40 percent. That’s according to data provided by the Centers of Disease Control and Prevention, which has been tracking phone ownership in the U.S. as a by-product of its biannual National Health Interview Survey since 2004. If the trend towards mobile phones continues, and there’s little reason to believe it won’t, landline phones could soon become an endangered species, much like the VCR and other technological relics before it.
Furthermore, even though smartphones dominant the telephony marketplace, the following Statista infographic shows slowing U.S. growth.
The popularity for the format of the music we listen to has certainly changed over the years. If you are old enough ( 😉 ), you remember AM/FM radio, records, eight-track tapes, cassettes, satellite radio, and more. All of which preceded the CD, widely introduced in 1982. In its hey day, CDs were extremely popular. Now, listeners emphasize music streaming rather CDs.
Amid all the talk of music streaming and the renaissance of vinyl, the continued plummeting of CD sales hasn’t been getting a lot of attention in recent years. According to the Recording Industry Association of America (RIAA), CD album sales in the United States dropped by 97 percent since peaking in 2000. They currently sit at their lowest level since 1986, when Whitney Houston’s self-titled debut album topped the Billboard charts. Having been hit by the rise of filesharing and MP3 players in the early 2000s, CD sales nearly halved between 2000 and 2007, which is when smartphones and the first music streaming services emerged to put the final nail in the compact disc’s little round coffin.