Consumer Technology Uptake Exceeding Growth Projections, CTA Says

Home automation, digital assistant devices, drones and other tech categories are fueling record revenues, according to the latest Consumer Technology Association research.

ARLINGTON, Va. — The consumer technology industry in the United States is forecast to post an estimated 3.2% revenue growth in 2017, producing $321 billion in retail revenues ($251 billion wholesale), according to new research from the Consumer Technology Association (CTA).

The latest edition of CTA’s semi-annual industry report, “U.S. Consumer Technology Sales and Forecasts,” also projects drones, OLED TV and virtual reality (VR) technology will each cross the $1 billion revenue milestone for the first time this year.

“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,” says Gary Shapiro, president and CEO, CTA. “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.”

CTA says its semi-annual report serves as a benchmark for the consumer technology industry, logging the size and growth of underlying product categories. The CTA consensus forecast reflects U.S. factory sales-to-dealers for more than 300 consumer tech products.

Emerging Technology on the Rise

Among categories tracked by CTA’s forecasts, U.S. sales of connected devices are projected to reach 635 million units in 2017, marking a record high total and 6% year-over-year increase from 2016. Here is a glance by category:

Wearables: The total wearables market – including fitness activity trackers, other health and fitness devices, hearables, over-the-counter hearing devices and smartwatches — is expected to reach sales of 48 million units in 2017 (9% increase) and earn $5.6 billion.

Smart Home: Harnessing the Internet of Things (IoT) to provide personalized home automation experiences, smart home is one of the most popular emerging tech categories. CTA projects sales in the category — including smart thermostats, smart smoke and carbon monoxide detectors, IP/Wi-Fi cameras, smart locks and doorbells, smart home systems, and smart switches, dimmers and outlets — to reach 27 million units in 2017 (50% increase over 2016), earning $3.3 billion (48% increase).

4K Ultra High-Definition (4K UHD): 4K UHD TVs are one of the industry’s fastest growing segments, far outpacing the transition to HDTV, with unit sales forecast to hit 16.7 million units (59% increase) generating $14.6 billion in revenue (45% increase).

Digital Assistant Devices: Voice recognition technology is one of the defining trends of 2017 and these devices continue to gain popularity. 2017 unit sales projections for voice-controlled digital assistant devices — including Amazon’s Echo, Google Home and expected new market entrants like the Apple HomePod — are projected to reach 11 million units (53% increase) and generate $1.3 billion in revenue (22% increase).

Virtual Reality (VR): Led by continued interest in mobile headsets and entertainment content, shipments of VR headsets are projected to grow to 5.3 million units (79% increase) and $1.3 billion in revenues (43% increase).

Drones: Total drone sales are expected to reach 3.4 million units (40% increase) and $1.1 billion in revenue (44% increase) for the first time in 2017. CTA’s forecast delineates U.S. drone sales for units below and above 250 grams, the FAA’s division for mandatory drone registration: Shipments of drones below 250 grams are expected to reach just over 2 million units, while drones above 250 grams will surpass 1.3 million units shipped.

“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,” says Brian Markwalter, senior vice president of research and standards, CTA. “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.”

Maturing Technology Defy Expectations

The top five revenue categories continue to contribute just over half of total industry revenue (53%) in 2017. Despite some slight revenue declines, unit shipment increases demonstrate continued resilience in these categories.

Smartphones: Continuing to defy expectations, despite widespread adoption, unit volume will grow 3% to reach 185 million smartphones shipping in 2017, with revenues expected to reach $55.6 billion (2% increase).

Televisions: In 2016, LCD television enjoyed record unit shipments but 2017 will initiate a period of slight declines with unit volume at 40 million units (1% decrease) and $18 billion in revenue (1% decrease). Future category growth will be driven by 4K UHD, high dynamic range and OLED display technology.

Tablets: With the tremendous consumer uptake of tablets over the past few years, adoption has leveled off and replacement cycles have slowed. Tablet sales will decline in 2017, as CTA expects sales of 59 million units (5% decrease) and revenues of $16 billion (8% decrease).

Laptops: In 2017, the laptop market, including commercial and consumer channels, will sell 48 million units, a 2% increase over last year, and earn $28 billion in revenue (1% decrease). Convertible models represent an area of growth.

Automotive Electronics: Joining the top five largest revenue hardware categories for the first time, factory-installed automotive technology, from driver-assist features to entertainment systems, is projected to contribute $15 billion (12% increase) in revenue to the industry as a result of overall automotive sales performing well, a rising tide of tech integrated into all vehicles and the increasing density of tech installed in each vehicle.

CTA publishes the “U.S. Consumer Technology Sales and Forecasts” twice a year, in January and July, reporting U.S. factory sales-to-dealers. Multiyear projections cannot account for unpredictable factors such as changes in trade laws, interest rates and federal policy, according to the association.

Security Is Our Business, Too

For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Security Sales & Integration is like having a consultant on call. You’ll find an ideal balance of technology and business coverage, with installation tips and techniques for products and updates on how to add sales to your bottom line.

A free subscription to the #1 resource for the residential and commercial security industry will prove to be invaluable. Subscribe today!

Subscribe Today!

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Our Newsletters