While the U.S. consumer technology market posted revenue gains of 1.5 percent in the first half of 2025, “softer second-half results” are expected. However, full-year sales revenue is expected to finish 1 percent above 2024.
That’s according to a retail tracking forecast from research firm Circana, which was released in late July.
“Technology came to the forefront of consumer purchase decisions early in the year, with a big emphasis on IT products as the PC market is entering a refresh cycle,” Paul Gagnon, vice president and technology industry advisor for Circana, said in the release. “However, that early boost is likely to weigh negatively on the second half as the trade-down behavior seen already from cost-conscious consumers in some product categories expands its reach.”
TWICE spoke with Paul Gagnon in early August about the release of the numbers and broader retail trends in consumer technology for the rest of 2025.
“I think the biggest takeaway is that there’s evidence in the tech market, at least, that first half demand, a big underpinning of the growth that we saw in the first half, is pull-forward behavior on the part of consumers,” Gagnon said. “So consumers buying products a little bit early, maybe a plan to purchase in 2025, that they just pulled forward into the first half of the year to get those products before prices go up due to the tariffs.”
“Not to say there will be price increases due to tariffs,” Gagnon added, although he cited survey work by Circana that the possibility of such increases is something that is on the mind of consumers.
According to Circana’s forecast, notebook and desktop PCs “ represented a major piece” of the growth, with respective dollar increases of 8 and 18 percent.
“IT products are the main areas that we’re expecting growth in. So, beyond just PCs, you think about other related IT products like tablets, we’ve seen pretty good growth in this first half of the year. We should still see positive growth in the second half of the year as well,” Gagnon said.
TV Trends
Televisions, the Circana report said, “felt the impact of trade-down behavior in the first half of this year.”
“[We’re] not really expecting a ton of growth in the second half of the year,” he said of televisions. “In fact, actually second half is also probably flat on a dollar basis, slightly positive on a unit basis.”
However, Gagnon sees strength in larger categories of TVs.
“I think more than ever, consumers are locked in on getting value from TV purchases, and typically when you buy a new TV, you upgrade, and if you can get an even bigger upgrade for about the same amount of money, consumers are really intrigued by that,” he said. “So, sales of 75-inch and larger so-called XXL TVs have been really strong, and I think they’ll still be strong in the second half of the year.”
A Camera Comeback
One surprise in the report is that certain retro products are showing an unexpected revival, and one of them is point-and-shoot cameras, a product long ago thought obsolete due to the arrival and continued improvement of smartphone cameras.
“It’s interesting to watch a category like digital point-and-shoot cameras, which are pretty inexpensive,” Gagnon said. “A lot of the growth that we’ve seen has been for digital point-and-shoot cameras under $200, so not necessarily enthusiast cameras.
“But there’s a real nostalgia, it seems, especially in the digital content creator community around the look and feel that some of these, what we would call legacy-type or retro-style digital point and shoot cameras, are delivering in terms of image quality. In fact, it’s been a pretty hot market in the secondary market for buying some older digital point and shoot cameras, and it still follows through on the new product sales too.”
Why are customers rediscovering those retro cameras, or perhaps even finding them for the first time?
“I think it’s the look and feel,” Gagnon added. “I think smartphone cameras are fantastic, and with all kinds of image processing that goes into the picture that you take with your smartphone, the actual image quality is great. But there’s a look and feel and an experience in terms of just the operation of an old-style digital point-and-shoot camera, that I think really resonates perhaps with an entirely new generation of buyers, younger consumers who are just now starting to learn the joy of photography.”
When it comes to other popular retro products, Gagnon pointed to “some of the styling” of portable Bluetooth speakers, many of which resemble what he calls “old-style radios that we had back in the 1960s and 1970s.”
There’s even been a market, if not huge, for DVD players and record players, he said.
“There are still pockets of tech that are quite mature, but that a lot of people really love.”
In terms of products that are showing a decline, Gagnon pointed to the home audio sector, which he sees paying the price if consumers seriously begin to prioritize their purchases.
Home Audio Swoon
“Some of the more challenging areas are on home audio products. So things like traditional home theater speakers, receivers, and even soundbars,” the analyst said. “Soundbars are the largest home audio product now, and they’ve been in decline for a number of years, and still in decline this year.
“And based on some consumer survey research that we’ve done over the past couple of months, trying to assess whether some products might see a bigger drop-off in demand if prices go up, as a way of sensing how consumers are prioritizing their purchases. Soundbars haven’t performed as well in those.”
The Impact of Tariffs
Indeed, whatever direction things go in with tariffs will likely end up having an effect on consumer purchasing decisions this year.
“The way that we look at categories or impacts of things like tariffs [is] how many consumers change their behavior if prices change,” Gagnon said.
“A lot of our questions don’t specifically relate to tariffs, but what would you do if prices went up or down on the products, and how might that change your buying choices? For some consumers, they’ll delay or postpone a purchase.
“Some consumers will still go ahead with a product buy, but they might fade down to a lower price point version, or a different brand or a different model to kind of offset the cost increase of an individual item. Then, for about a third of consumers, they’ll carry through with their purchase as planned.”
Looking Ahead
Circana will not be releasing a separate forecast before the holidays, with its next forecast arriving next January, before CES.
“I’ll just say that our current forecast outlook for the fourth quarter this year is for total tech spending to be roughly flat compared to a year ago,” he said. “As part of the context around that, though, the fourth quarter of 2024 was pretty strong for tax spending.
“It’s actually the first quarter where we saw year-over-year dollar growth in about two years. So we’re comparing against the period a year ago, which was more or less pretty strong, at least relative to the recent past. And so flat performance year-over-year is matching up against a pretty good holiday season last year for tech.”
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