The consumer tech industry is taking a breather for the next three years, The NPD Group is projecting, with sales growth expected to remain in the low single digits.
Following a return to growth in 2017, CE dollar volume rose less than 3 percent last year, and the market research firm is forecasting slower gains of 2 percent in 2019, to about $94 billion.
According to NPD’s latest “Future of Tech” report, smart-home devices and wireless headphones will be among the biggest gainers with respective increases of 55 percent and 52 percent this year alone, while the two categories together will generate incremental sales of nearly $3 billion through 2021.
Still, the bulk of the consumer tech business will continue to lay in TVs, PCs and related accessories, which are projected to account for over $4.2 billion in incremental revenue in 2021 vs. 2018. “As such, the industry remains dependent on these categories to deliver positive volumes alongside the newer, high-growth categories,” observed NPD VP and industry analyst Stephen Baker.
But Baker believes the core tent-pole categories are up to the task, with larger-screen and higher-resolution TVs, and gaming notebooks, desktops and accessories, supporting that growth.
Driving the gains in TV is a consumer craving for more screen real estate. NPD research shows that over the last two years 40 percent of TV replacement purchases were motivated by size and the trend is expected to continue, driving sales of 75-inch and larger 4K TVs to more than $4 billion in 2021, making it video’s largest growth segment.
“The dynamism of the CE industry is evident as it consistently reinvents itself to ensure continued growth,” added Baker. “The ability to deliver revenue increases in mature and heavily saturated segments like TVs and PCs is instrumental to this growth.”