Forecast: US consumer tech revs to reach $505bn
January 6, 2022
The US consumer technology industry is projected to generate over $505 billion (€467bn) in retail sales revenue for the first time ever according to a new forecast from the Consumer Technology Association (CTA). The projection represents a 2.8 per cent revenue increase from 2021’s impressive 9.6 per cent growth over 2020. Strong demand for smartphones, automotive tech, health devices and streaming services will help propel much of the projected revenue.
CTA’s twice-yearly U.S. Consumer Technology One-Year Industry Forecast reflects US manufacturer shipments for more than 100 consumer tech products and related software and services. The report identifies major trends shaping the future of consumer technology. It was designed and formulated by CTA, the most comprehensive source of sales data, forecasts, consumer research and trends for the consumer technology industry.
“The consumer technology industry has shown impressive resilience in the face of supply chain challenges that are affecting almost every sector of the economy,” states Gary Shapiro, president and CEO, CTA. “The pandemic gave people more time to explore new tech that made their lives healthier, safer and more convenient. We anticipate another year of growth for our industry based on the enormous demand we see from consumers for tech products and services.”
Smartphones Reign Supreme with 5G and Foldables:
Smartphone shipments are projected to reach 154.1 million units ($74.7 billion in shipment revenues) in 2022, marking 3 per cent growth from 2021 (149.6 million). The upward trend is driven by the increasing availability of 5G, as 5G handsets will make up 73 per cent of smartphone shipments ($61.37 billion in revenues) in the coming year. The introduction of foldable phones represents a new option for consumers that will help drive demand.
Automotive Tech on the Rebound:
Automotive technology sales are expected to rebound in 2022 as we begin to see early signs of recovery in chip supplies. Factory-installed automotive tech is projected to reach $16 billion in shipment revenues this year, an impressive 7 per cent increase from 2021 ($14.9 billion). Demand for automotive tech is increasing as auto manufacturers produce more and continue to develop advanced driver assistance systems that make vehicles more efficient and safer.
Streaming and Cloud-Based Services Grow Entertainment Opportunities:
US households continue to purchase more content through online delivery platforms. Total spending on streaming services and software is expected to reach $130 billion in 2022, up 6 per cent over 2021.
- Video: An ever-expanding universe of video streaming services, each with their own exclusive TV shows and movies, is drawing a growing audience. Spending on video streaming services is expected to reach $47 billion in 2022, up 7 per cent over 2021.
- Audio: Streaming services that offer music, audio books and podcasts will see consumers spend $12.9 billion in 2022, up 15 per cent over last year.
- Gaming: Consumer spending on gaming software, including downloads, game streaming services and in-game purchases, will rise 5 per cent to $53.6 billion this year.
Gaming on the Rise:
With consumers spending more time at home and major advancements in gaming systems in recent years, the video game industry is poised to have yet another year of revenue growth. Shipment revenues for home gaming consoles rose dramatically from nearly $4.4 billion in 2020 to nearly $6.1 billion in 2021, an impressive 40 per cent growth year-over-year driven largely by demand for next-generation consoles and more time spent at home amid the pandemic. CTA projects relatively modest gains in 2022, with home gaming consoles reaching nearly $6.5 billion, a 6 per cent increase from 2021. Growing interest in the metaverse will contribute to a spike in demand for virtual reality eyewear, with shipment revenues rising from $774 million to nearly $1.3 billion, a 66 per cent increase.
Personal Mobility Accelerates:
Personal EVs such as electric bikes and scooters are also on the rise as consumers seek alternatives to driving their car or taking public transportation for short trips and last-mile transportation. Electric bike shipments are expected to reach almost 3 million units and $6 billion in revenues in 2022.
Wireless Earbuds and Smartwatches Increase in Popularity:
Wireless headphones and smartwatches both top the list of wearable technologies keeping consumers connected, productive and entertained. Smartwatches are projected to generate $7.1 billion in shipment revenues this year, an 8 per cent increase over 2021. True wireless earbuds are expected to rise 3 per cent from 2021 to 2022, reaching a projected $9.3 billion in shipment revenues this year.
Health and Fitness Technology Demand Grows:
Connected exercise equipment grew significantly through the pandemic, generating nearly $3.8 billion in shipment revenues in 2021. In 2022, CTA projects connected exercise equipment will experience 17 per cent growth and reach nearly $4.5 billion in shipment revenue. This growth trajectory suggests that health-conscious consumers are finding practicality and convenience in exercising at home, even as gyms and workout classes reopen.
“The record-breaking revenue generated by the technology industry reflects the reality that every sector of our economy is leveraging technology to enhance their products and services,” states Rick Kowalski, director, industry analysis and business intelligence, CTA. “Just look around the show floor at CES 2022, you see agriculture, health care, entertainment and beyond. It is a snapshot of how all-encompassing the technology industry has become.”