NOP’s exclusive research into computer and Internet usage, conducted for the third year running, has thrown up potentially disturbing news for the booming industry. Although consumer ownership and usage has continued to grow, the rate of increase has slowed dramatically, and development is concentrated on Internet access and utilisation, rather than expansion in the foundations of the market.
By the third quarter of 1999, 49 per cent of the adult population (aged fifteen years or over) used a computer regularly – a rise of only one per cent from the same period in 1998. This compares with an eight per cent increase between 1997 and 1998. More people use a computer at home than at work, and domestic usage was the only category to grow in 1999. A third of all adults – compared with three out of ten in 1998 – now use a computer at home; 28 per cent use one at work, and nine per cent at school or college.
In line with home usage, home ownership is also rising, albeit slowly compared with previous years. Of all adults, 46 per cent now have a personal computer at home, a rise of four per cent in the past year – but this is only half the increase in domestic ownership which took place between 1997 and 1998. However, the PC market is performing better than the related hi-tech area of games consoles; there, ownership remained static at 38 per cent of adults, compared with last year’s growth of 6 per cent.
Although computer usage and home computer ownership showed little increase, growth in Internet coverage was far healthier. NOP’s 1999 research found 41 per cent of all adults with some Internet access, either at work, home or at school or college, compared with three out of ten in 1998; in the past three years, the number of people surfing the net has more than doubled.
Access from home and from work have grown in parallel, both rising from 15 per cent to 21 and 22 per cent; school or college access remained at ten per cent. Although numerically the smallest sector, connection through an educational establishment reached a very high proportion of its target. Of 15-24 year olds – who make up nearly three-quarters of school or college users – 42 per cent accessed the Internet with these facilities.
The Internet is still set to grow. Seven per cent of non-users at home intend to connect in the next three months, and another seven per cent within the next year. However, as slightly over half of these potential users already have a PC at home, the actual numbers are probably nearer ten to 11 per cent – still a healthy overall increase of about 33 per cent in home connections.
Taken together, the expansion in home computers and Internet access pose an interesting question about the future development of the market. Domestic Internet growth – which presupposes the presence of a home PC – has increased more than overall ownership in enabling equipment. This means that there are two possible ways that the market is developing: by “churn” or by replacement and upgrading.
“Churn” – meaning customers dropping out of the market and being replaced by other users not previously involved – seems unlikely. The demographic profile of the market has not significantly changed, and so in this space of time, it is unlikely that there has been significant consumer substitution, nor is there any anecdotal or trade evidence for the phenomenon. This favours the second possibility: that existing home computer users are responsible for most of the Internet growth – after all, only about half of home computer owners are currently online – and that home computer sales are more attributable to experienced owners up-grading and expanding their existing capacity, than to people entering the market for the first time.
This in turn has serious implications about likely limits to the expansion of the market under current conditions, which make home computing and access to the Web fall far short of the universality envisaged by some commentators.
The wired and the unwired
Computer and Internet access are predicated by age, and, even more, by social class. The youngest age group, the 15-to 24-year-olds, have by far the highest rate of computer use in general, although much of this is attributable to use in schools or colleges. The link with education is even more marked in terms of Internet access. Although 75 per cent of 15-to 24-year-olds use the Internet in total, their home access is far more in line with the general population.
In stark contrast, the computer revolution has left the over-55-year-olds behind. Only a fifth have a home PC, six per cent have home Internet access – and only four per cent intend to connect in 2000.
But social class is an even more important factor for computer involvement. Leaving aside workplace exposure, where professional and office workers are, unsurprisingly, more likely to use computers than manual workers, home use is predominately upmarket.
A quarter of all people who have a computer at home come from the most prosperous social group, the ABs, although they make up 17 per cent of the population. The C1s, white-collar workers – 28 per cent of adults – have a third of all home PCs.
The imbalance is even more striking in Internet access. A third of the online consumer base comes from the ABs, and slightly more – 37 per cent – from C1s, compared with less than a third from the C2DEs. Overall, nearly two-thirds of ABs have a home PC, and four out of ten are online at home; more than half – 56 per cent – of C1s have a home computer, but only three out of ten home Internet connection. Far fewer – 38 per cent – of the C2DEs have a home computer, and only a fifth have Internet access – although ownership of games consoles is the same in all three groups.
Until recently, suppliers of hardware and computer services had little need to concern themselves with the social imbalance of the market. But if ownership continues to stabilise, growth will have to come from outside the current core of consumers – or fail to achieve its mass-market potential.
ANALYSIS: The Human Factor
Contact: Elaine Hunt
Telephone: 01993 83120
NOP Research Group interviewed a sample of 998 adults over 15-years-old using its Weekend Telephone Omnibus
CONTACT: Roger Fisher-Payne on 0171-890 9228