Consumer enthusiasm for technology is exceeding expectations and will drive the U.S. CE industry to an estimated 3.2 percent growth this year, according to the Consumer Technology Association (CTA).
In releasing its semiannual “U.S. Consumer Technology Sales and Forecasts” report, the CTA said the U.S. consumer technology industry will earn an estimated $321 billion in retail revenue. Drones, OLED TV and virtual-reality technology are expected to each cross the $1 billion revenue milestone for the first time.
“Driven by consumer demand for the products we already know and love, as well as new, innovative technologies, revenue growth in the consumer technology industry is exceeding expectations,” said Gary Shapiro, CTA president and CEO. “Not only are breakthrough technologies changing our lives for the better — such as drones delivering medical supplies to remote areas or the use of VR in patient care — tech is also a key driver of the U.S. economy, outpacing GDP growth, and reinforcing America’s role as a global leader in innovation.”
Among CTA’s findings:
*Sales of smart-home devices will rise 50 percent year over year, reaching 27 million units in 2017 and earning $3.3 billion.
*The total wearables market — which includes fitness activity trackers, other health and fitness devices, hearables, over-the-counter hearing devices and smartwatches — is expected to rise 9 percent, earning $5.6 billion.
*4K UHD TVs, which CTA called one of the industry’s fastest-growing segments, are forecast to generate $14.6 billion in revenue on 16.7 million units. These are increases of 45 percent and 59 percent, respectively.
*Voice-controlled digital assistants, such as the Amazon Echo, Google Home and Apple HomePod, are expected to generate $1.3 billion in revenue on 11 million units. These are increases of 22 percent and 53 percent, respectively.
*Continued interest in mobile headsets and entertainment content will drive shipments of VR headsets up to 5.3 million units (79 percent increase) and $1.3 billion in revenues (43 percent increase).
*Total drone sales are expected to reach 3.4 million units (up 40 percent) and $1.1 billion in revenue (up 44 percent).
“More and more consumers are adopting connected products at a rapid pace, with several categories such as drones, VR and OLED TVs surpassing significant revenue milestones just a few years since their market entry,” said Steve Koenig, CTA’s market research senior director. “At the same time, core categories, such as smartphones and laptops, continue to experience unit and revenue growth, demonstrating resilience in mature technologies. We believe the anytime/anywhere access to information and each other that connectivity enables is a driving trend of our time.”
As for maturing technology, the top five revenue categories continue to contribute just over half of total industry revenue (53 percent) in 2017. Despite some slight revenue declines, unit shipment increases demonstrate continued resilience in these categories, said CTA.
Among the findings for maturing tech:
*Smartphone unit volume will grow 3 percent to reach 185 million smartphones shipping in 2017, with revenues expected to reach $55.6 billion (up 2 percent).
*LCD TVs will initiate a period of slight declines in 2017, with unit volume at 40 million units and $18 billion in revenue (both down 1 percent). Future category growth will be driven by 4K UHD, high dynamic range and OLED display technology, said CTA.
*Tablet sales will decline in 2017, thanks to high consumer uptake. Sales of 59 million units are expected (down 5 percent) and revenues of $16 billion (down 8 percent).
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*Laptops, meanwhile, will grow 2 percent, selling 48 million units in the consumer and commercial markets; however, revenues will decline by 1 percent year over year, down to $28 billion. CTA cited convertible models as an area of growth.
Joining the top five largest revenue hardware categories for the first time, factory-installed automotive technology is projected to contribute $15 billion in revenue to the industry. This is up 12 percent and stems from a strong performance from overall automotive sales, as well as a rising tide of tech integrated into all vehicles and the increasing density of tech installed in each vehicle.
CTA’s forecast reflects U.S. factory sales-to-dealers for more than 300 consumer tech products.