Article
Research: Kiosk industry in 'holding pattern,' but growth will return in 2010
In its annual report, Summit Research Associates Inc. depicts a stagnant kiosk landscape but says the outlook is expected to improve.
September 22, 2009
In spite of an economy that has many industries struggling, kiosk growth hasn't taken a negative turn, according to the latest version of Summit Research Associate Inc.'s annual report, "Kiosks and Interactive Technology – Global Statistics and Trends." But it hasn't skyrocketed, either.
"We have seen a significant change in the formerly impressive growth in projects across several market sectors," said Summit's founder, Francie Mendelsohn, in the report. "The state of the industry can be characterized as being in somewhat of a 'holding pattern.'"
But Mendelsohn says the near future is looking healthier for the kiosk industry. She predicts a return to a normalized level of deployments and pilot projects some time in 2010.
Installed base
According to Summit's research, the worldwide kiosk installed base reached 1.82 million in 2008 and is expected to grow only slightly to 1.85 million by the end of 2009. Summit forecasts that number will grow to 1.9 million by the end of 2010 and to 2 million in 2011.
North America — This region persistently dominates the global kiosk market, representing two-thirds of the installed base, with 1.2 million deployments in 2008. According to Summit's findings, the majority of these deployments continue to be in the United States.
"The U.S. market continues to overshadow every other region," the report states. "It accounts for 53 percent of all kiosks deployed today. The huge dominance shows no signs of change in the next three years."
Europe — With an installed base of 321,000 kiosks, European kiosk deployments represent 18 percent of the global market. According to Summit, the region's deployment figures last year had fallen to third place but have since recovered.
"Europe again has resumed its place as the second-most populated kiosk region," the report says.
In terms of the future, Summit anticipates a "renewed level of activity" in Europe, specifically in Russia, where there has been upswing in the deployment of financial-services kiosks.
Asia-Pacific — This region closely trails Europe, with 271,000 kiosks, or 15 percent of the global installed base. Summit reports that, despite Asia's smaller number of kiosk players, several large deployments will precipitate steady growth in the region.
"Eventually, the Asia-Pacific region will eclipse the other regions," Mendelsohn writes in her analysis. "Chaliyuan, the manufacturer of phone battery-recharge kiosks, (has) installed more than 65,000 units in Beijing alone. When projects of similar size and scope are launched in this region, they will become a worthy competitor to North American dominance, and there is little doubt that the A-P region will one day be the industry leader."
"ROW" — With only 33,000 kiosks installed, the rest of the world, or ROW, as the Summit report refers to it, represents only 2 percent of the global kiosk market.
Mendelsohn specifically discusses Africa, the Middle East, India and South America in the report's ROW projections and says the majority of the deployments in those regions are financial-services kiosks. The report cites infrastructure issues, such as unreliable power supplies on the African continent, and low labor costs as prohibitive factors in the growth of self-service in these developing parts of the world.
Growth projections
Though its kiosk deployments lag behind those of the other regions, the report indicates that ROW will see the most kiosk expansion through 2011, with a projected growth rate of 17 percent, compared to 13 percent for North American and 12 percent each for Europe and Asia-Pacific.
"The ROW's growth is due primarily to the fact that they have far fewer kiosks deployed than the other world regions," Mendelsohn writes in the report. "The European and Asia-Pacific regions will have double-digit growth, very close to that of North America; but their total installed base numbers will not come within sight of North America in the foreseeable future."
Trends
Mendelsohn also analyzes kiosk activity in each market sector and comments on emerging trends. Among some of the highlights:
Retail — Summit reports an increasing number of auto sales establishments using product-information kiosks, as well as a number of retailers testing "sommelier in a box" wine-information kiosks.
The report also examines the quick-service restaurant segment and its hesitance to adopt kiosk technology. Mendelsohn outlines several contributing factors to this trend, including a lack of effective advanced marketing and employee education; failure to integrate self-service systems with a store's POS network; and software platforms that are too complicated.
The report indicates, however, that self-order kiosk technology has been successful in convenience stores, and Mendelsohn says there is still potential for these solutions in the foodservice industry.
Entertainment — Summit reviews an application that some in the industry expected to see flourish — digital-download kiosks. But the application has floundered, and Mendelsohn says the advancement of MP3 players and online music downloads is the reason.
"The deployment and use of music-listening and track-downloading kiosks has not grown as expected," she writes. "As sometimes happens, other technological breakthroughs have changed the dynamics in a striking and fundamental way."
More highlights from 'Kiosk and Interactive Technology – Global Statistics and Trends' • The average kiosk sees 94 users per day, a 29-percent decrease since 2006. • Cash and credit card acceptors are the most-used payment peripherals. North American and European deployers use credit card acceptors most often, while Asia-Pacific and ROW deployers use cash acceptors most often. • Most deployers — 31 percent — use third-party maintenance providers, while 28 percent report using the original solutions provider; 15 percent handle kiosk maintenance in-house. |
Mendelsohn says digital-download applications may be able to survive if they can evolve to exist on multifunctional devices that offer additional applications, such as those that offer photo processing or ringtone downloads.
Also in its entertainment-kiosk outlook, Summit predicts a deceleration in the growth of the booming DVD-rental segment.
"Will the future for DVD-rental kiosks continue to remain so bright? In the long term, no," Mendelsohn writes. "The reason is that technology is changing at a tremendous pace, and it is becoming possible to download a full-length movie directly to a consumer's PC or television in a few minutes."
Travel and Tourism — The two most notable trends Summit explores in the travel kiosk segment are 1) the deployment of common-use self-service, or CUSS, kiosks in environments such as convention centers and hotels and 2) the integration of mobile technology in self-service, specifically relating to airline check-in.
CUSS kiosks allow passengers to check in for flights, regardless of the airline they are flying.
"The kiosks have two main applications, usually represented by two buttons," according to the report. "One is for the traditional hotel check-in and checkout; the other allows the printing of the guest's boarding pass before heading to the airport. All major airlines are represented."
As for mobile integration, Summit reports that Air Canada has offered paperless boarding passes since 2007; Continental Airlines is the first U.S. carrier to test the technology.
Mendelsohn says the airport-kiosk segment will eventually be eclipsed by mobile capabilities.
The message
So what story does Summit's most recent data tell? Mendelsohn says the picture may seem dismal, but there are some bright spots.
"This year is certainly unlike any other we have experienced since Summit began in 1994," she writes in the report. "But there are definitely some pockets of activity. … Not everyone has suffered."
Mendelsohn also thinks deployers and solutions providers can enjoy a little breathing room, now that the credit crunch appears to be letting up.
"Those who have the financial wherewithal to ride it out — and I think the worst is behind us — will do OK," she writes. "You could argue quite easily that this is the best time to deploy kiosks. You're having to do more with less employees, and what better way to do that than to deploy kiosks?"
The figures in Summit's "Kiosks and Interactive Technology — Global Statistics and Trends" were compiled from independent research and testing, as well as from an extensive survey sent to more than 700 companies in the industry, which saw more than a 50-percent response rate. For more information, visitsummit-res.com.
Related Media
Subscribe
Get the latest news and resources from Kiosk Marketplace.
