Information overload forces an IT reboot

In a saturated market consumers have to choose from a bewildering range of gadgets. But manufacturers must soon raise their game - and bring down prices.

The IT and communications industry fears the information backlash will affect the consumer electronics market.

Today's smartphones, music players, tablet computers and netbooks will soon join Sony Walkmans, Palm Pilots and flip-top phones in the rubbish heap of technology history.

It is, of course, inevitable that in a fast-developing industry such as IT, consumer tastes will be dictated by a fickle sense of fashion. But the question the IT and communications industry is starting to ask itself is how soon will its customers decide that carrying around a growing collection of the latest high-priced personal IT gadgets is no longer quite so cool.

There are already indications that technology users are becoming frustrated at having to cope with a deluge of information, fuelling fears that consumers may one day cut back on their personal electronics expenditure to save money and protect their privacy.

According to an international survey of 1,700 white-collar workers conducted by the market research agency WorldOne this month on behalf of LexisNexis, part of the publishing and information group Reed Elsevier, professional users are already experiencing tech nology fatigue.

A majority, 62 per cent, of the professionals surveyed said they found it difficult to focus on the task at hand because they were distracted by a constant torrent of e-mails and other information. Almost three-quarters admitted disregarding and deleting information they had not had time to read.

While advancement of technology has made it easier for white-collar professionals to stay connected, they see "real time" communication as a double-edged sword.

About 45 per cent say that being constantly accessible by mobile phone, e-mail and other means makes it harder to do their job.

Rob Farquharson, director of LexisNexis Connect, says: "Fears of a technology backlash are being fuelled by the fact that people are feeling more stressed because of an information overload."

Mr Farquharson adds the scale of information overload has increased as a result of the global downturn.

"It is very much the case that people are suffering from information overload," he says. "This situation has become more acute since the start of the financial downturn. Staff cutbacks mean a smaller number of people are having to cope with roughly the same information flow."

Mr Farquharson also says the information backlash faced by professionals is also filtering into the consumer space.

"There is a continual blurring of work and non-work as a result of people carrying devices such as smartphones around with them," he says. "This appears increasingly to be the norm in professions such as the law and accountancy."

The big fear in the IT and communications industry is that the information backlash will affect the consumer electronics market. As long as sporting the latest must-have smartphone or tablet computer remains fashionable, the industry is assured of rising sales and bumper Christmases.

But there are now concerns that people might cut back on their personal digital electronics budgets. There is also the fact that the industry has no reliable data on how much consumers are actually prepared to spend on such devices in these circumstances.

According to Tony Cripps, a researcher at the analyst Ovum: "The industry still has no clear idea about how much of their limited expendable income consumers are prepared to spend on communications, digital media and services."

Mr Cripps says some big IT companies are further courting consumer dissatisfaction by building their own exclusive communications platforms.

"What major players such as Apple and Microsoft are trying to do is to provide an end-to-end communications, applications and content platforms to control the distribution and access channels for consumers, developers and content providers alike," he says. "However, these platforms are competing with each other for the best services and consumers."

This degree of competition may further alienate consumers by forcing them to do without services they need, or to start carrying around even more devices.

"This is leading to a difficult situation further down the line where consumers may have to make the decision to buy into a number of different eco-systems and may need to carry a number of devices to have access to all the services and applications they require," says Mr Cripps.

The industry has always fervently believed that, even if one region becomes saturated with too many products and services, another will always be ready to increase sales figures.

But with so many developed markets already approaching saturation, what is often still called "the developing world" is being asked to buy into unrealistically highly priced devices and services. To tempt another billion users worldwide into buying into the digital dream, makers may have to drop their prices dramatically.

"If the mobile industry is serious about addressing a further 1 billion customers, as Nokia, for one, has stated as an objective, it will have to reduce the price of mobile communications both in the developing and the developed worlds," says Mr Cripps.

Although the industry would like to imagine that it can maintain regional price differentials indefinitely, globalisation has coupled with the downturn to produce a situation in which consumers expect value for their money.

With Asian companies increasingly competing directly with the western IT giants as well as making many of their components, prices for basic communications devices and services are set to drop worldwide - and not only in the "developing" regions - making it increasingly difficult for western manufacturers.

The information overload and resulting technology backlash now coming from western users is also likely to affect other regions, such as the Middle East.

Mr Farquharson says: "Information overload is also set to have an adverse impact on the Middle East as the region grows its knowledge economy and attracts industries such as financial services.

"The region will have to face the same challenges that have now arisen in western markets."