Artificial intelligence (AI), voice-recognition technology and fast connectivity – critical ingredients for smart speakers, smart home technologies and smartphones – will help spur overall US consumer technology industry revenue to $377 billion (€325bn) in retail revenues in 2018, a six per cent increase, according to the Consumer Technology Association (CTA). The mid-year update of CTA’s flagship report, U.S. Consumer Technology Sales and Forecasts, also shows whole home Wi-Fi solutions, wireless earbuds and augmented/virtual reality headsets will each cross the $1 billion wholesale revenue milestone for the first time this year.
“Innovations in AI, voice and connectivity are making tech devices more helpful and versatile, and changing our lives for the better,” said Gary Shapiro, president and CEO, CTA. “And thanks in part to economic factors including tax reform and high employment driving our economy forward, even more consumers are bringing these remarkable tech innovations into their lives. Although tariffs and the trade war threaten to unravel the strong economic momentum driving tech adoption and sales, the current state of the industry is exciting and healthy going into the second half of the year.”
The CTA forecast reflects US factory sales-to-dealers for more than 300 consumer tech products, and related software and services. The biannual report serves as a benchmark for the US consumer technology industry, charting the size and growth of underlying product categories.
Key categories projected to contribute significantly to overall unit and revenue growth include:
As some companies turn their focus from fitness trackers to smartwatches, this sub-category is expected to sell 15.3 million units shipping in 2018, a 26 per cent increase over 2017, with revenues of $3.7 billion, a 19 per cent increase.
“The new Internet of Things is the ‘Intelligence of Things’,” said Steve Koenig, vice president of market research, CTA. “Connected products tap AI to enhance services, especially in categories including smartphones, connected cars and smart home devices. And with 5G on our doorstep – the first 5G products will hit the market this year – we’re crossing into a new phase of faster and smarter connected devices.”
Top 3 Revenue Drivers – The Three Screens
The top three revenue drivers of the industry showing continued strength:
2019 will mark the introduction of the first smartphones with 5G connectivity on the market. CTA expects 2019 US sales will reach 2.1 million units and cross $1 billion in revenue, with triple digit increases through 2021.
Showing strong growth, 4K Ultra High-Definition (4K UHD) TVs are forecast to sell 18.6 million units (11 per cent increase) and generate $14.3 billion in revenue (seven per cent increase). OLED unit sales are expected to reach 772,000 (45 per cent increase) and earn $1.4 billion in revenue (42 per cent growth) this year – and in 2019, OLED display revenue will rise 50 per cent to cross the $2 billion mark.
“We are undergoing a huge shift in how people consume content,” said Rick Kowalski, senior manager of market research and business intelligence, CTA. “Video streaming services are offering an increasing amount of exclusive content, and live TV streaming options are becoming widely available this year – and that has more consumers exploring their over-the-top video options. Music streaming services continue to gain subscribers at a furious pace, luring regularly paying music listeners with attractive introductory offers and benefits such as ad-free listening. This remarkable growth in streaming services shows us that the phrase ‘content is king’ is more relevant than ever.”