Advanced Television

Report: US consumer tech sales to top $400bn

July 17, 2019

The growing popularity of streaming services, AI-enabled emerging devices and in-vehicle technology will help drive the US consumer tech industry to a record-breaking $401 billion (€358bn) in retail revenues in 2019 – 2.2 per cent growth year over year – according to a Consumer Technology Association (CTA) report.

“Enthusiasm for AI-powered technologies is skyrocketing – more consumers are discovering for themselves how tech innovation can change their daily lives for the better,” said Gary Shapiro, president and CEO, CTA. “And with 5G delivering the faster connectivity we’ll need for anytime/anywhere streaming, smarter home robotics and more advanced vehicles, consumer excitement will only grow, but unnecessary tariffs – taxes paid by American consumers and businesses – threaten to slow down our nation’s economic momentum.”

The midyear edition of CTA’s flagship, biannual U.S. Consumer Technology Sales and Forecasts report reflects US factory sales-to-dealers for 300+ consumer tech products and related software and services.

Emerging Technologies

Smart Home: Home safety and monitoring products are driving growth in the smart home category. CTA expects smart home sales – including Wi-Fi cameras, smart thermostats, smart smoke and carbon monoxide detectors, smart locks and doorbells, and smart switches, dimmers and outlets – to reach 28.6 million units (19 per cent growth) and $4.5 billion (16 per cent increase).

Smart Speakers: After rapid adoption of AI-enabled, voice-controlled smart speakers including Amazon Echo and Google Home, and increased voice integration in other devices such as TVs, soundbars and smart home devices, smart speaker sales will level off in 2019. Smart speakers remain a category to watch, with an expected 35.2 million units sold (1 per cent increase over last year) and $3 billion in revenue (1 per cent decrease) in 2019.

Home Robots: Consumer enthusiasm for robots that perform chores such as vacuuming, lawn mowing and floor cleaning is driving another AI-enabled category seeing double digit year-over-year growth. CTA expects the category to sell 3.6 million units, a 12 per cent annual increase, and earn $1.2 billion in revenue, a 19 per cent jump.

Wireless Earbuds: Leading devices including Apple AirPods and Beats by Dre Powerbeats Pro are expected to sell nearly 16 million units in 2019 (up 45 per cent) and approach $2 billion in revenue (a 46 per cent increase). CTA projects double-digit growth for the category over the next few years, as consumers pick premium audio experiences featuring true wireless technology.

Smartwatches: As consumers gravitate toward premium smartwatches, revenue for the category is expected to increase 19 per cent in 2019 to reach $5.4 billion. Smartwatches are expected to sell 20.1 million units, a 7 per cent increase over last year – leading the wearables category.

“More than ever, consumers want premium technology experiences – especially within the smartphone, TV, laptop, smartwatch and wireless earbuds categories,” said Steve Koenig, vice president of market research, CTA. “The lightning-fast pace of tech means we can upgrade our ‘everyday tech’ and get extraordinary experiences. While this level of quality and efficiency means some replacement cycles are getting longer, technologies such as AI and 5G promise to usher in the next era of innovation, delighting consumers and driving our economy.”

Revenue Drivers

Smartphones: Now owned by 91 per cent of US households, smartphones have packed vital features into models at all price points. As a result, the replacement cycle is lengthening and smartphone units are expected to decline for the first time in 2019, reaching 165.5 million units (2 per cent decrease) and earn $77.5 billion dollars in revenue (2 per cent decrease) – the largest consumer tech category.

Looking ahead, 2019 marks the launch of the first 5G smartphones. This year, CTA expects the 5G-enabled devices to reach 2.1 million units sold and generate $1.9 billion in revenue.

Laptops: Driven by growing demand for cloud-based and convertible models, the US laptop market will sell 51 million units, up 2 per cent over 2018, and earn $32 billion in revenue (up 3 per cent).

Televisions: After two years of record revenue and unit sales for the massive TV category, sales will start to taper off in 2019, as LCD shipments decline and upgrades from 4K Ultra High-Definition (4K UHD), 8K UHD and OLED sets grow. TVs remain the centerpiece technology in many American homes.

Overall, the total TV category will ship 38.8 million units in 2019 (1 per cent increase) driving $21.4 billion in revenue (9 per cent decrease) – following a better-than-expected year of sales in 2018. Upgrades will be driven by big screen models and sets featuring 4K UHD resolution and HDR technology. This year 4K UHD sets will account for 17 million units (7 per cent increase) and almost $15 billion in revenue (9 per cent decrease).

Looking ahead, inaugural shipments of 8K UHD TVs in 2019 will reach $734 million in revenue and 175,000 units. And the promising OLED market will surpass one million units this year (up 30 per cent over 2018) with double-digit growth through CTA’s forecast horizon of 2023.

In-Vehicle Tech: Factory-installed, in-vehicle technology will see the largest revenue increase of any tech category in 2019 – increasing over $1 billion dollars year-over-year to reach $17.6 billion (8 per cent increase over 2018). Advanced driver-assist safety features such as blind spot detection, adaptive cruise control, lane keeping assist and collision avoidance systems are driving sales of both factory-installed and aftermarket vehicle technology alike.

Software and Streaming Services – Music, Video and Gaming
Consumer spending on software and services (including music, video and gaming services) is projected to reach a new high of $75.6 billion in 2019 (a 14 per cent growth over last year). Driving consumer demand are cloud-based subscription services supported across a range of devices.

  • Video: Live TV streaming and exclusive content through subscriptions will push consumer spending on video streaming services to $17.7 billion in 2019, up 25 per cent.
  • Music: On-demand music services including Apple Music, Pandora and Spotify will cross $8 billion in revenue, up 33 per cent as increased adoption of products such as wireless earbuds and smart speakers drive more music subscriptions.
  • Gaming: A revolutionary shift toward cloud-based streaming models, subscriptions and growing in-game purchases will push the gaming software and services category to $38.9 billion in revenue in 2019 – an 11 per cent increase.

The CTA cautions that Mmulti-year projections cannot account for unpredictable factors such as changes in trade laws, interest rates and federal policy, and that any escalation in the trade dispute with China and expansion of tariffs would present significant headwinds to its forecast.

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