US tech industry revenue to reach $351 billion — CTA

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Gary Shapiro, CTA president and CEO, gestures during his keynote speech at the CES 2018. — CTA

THE US consumer technology industry,  which serves as a benchmark for the global tech industry,  is set to rake in a record-breaking $351 billion in retail revenues this year or 3.9% higher than 2017, according to new research from the Consumer Technology Association (CTA).

Released on Jan. 8, a day before the opening of Consumer Electronics Show (CES) 2018, the latest edition of the US Consumer Technology Sales and Forecasts noted that projection will be driven by “excitement about emerging technologies and the resilience of historically leading categories.” 

The report also includes for the first time a projection for consumer spending on music and video streaming services — valued at $19.5 billion in revenue, 35% higher than just last year. CTA added streaming services sales — which include internet-enabled services that deliver on-demand or linear video content (e.g., Netflix, Hulu and Sling TV) and on-demand audio content (e.g., Spotify, Pandora or Apple Music) — to better capture the full expanse of the ever evolving and expanding consumer technology market. Excluding the addition of streaming services, total industry revenue would increase by 2.2% in 2018.

“Technology is improving our lives in more ways than ever — and consumer enthusiasm is growing just as quickly as companies can bring their innovations to market,” said Gary Shapiro, CTA president and CEO, in a statement. “Our forecast incorporates several key economic factors including a strong stock market, continued job growth and stable rules for international trade to forecast these record-setting sales for breakthrough technologies and longtime market leaders alike. And the driving themes of 2018, including voice computing, artificial intelligence and connectivity that make our lives better and more efficient, will be on display across the show floor this week at CES 2018.”

CTA is the US’s largest tech trade association — its semi-annual report charts the size and growth of underlying product categories. The CTA consensus forecast reflects US factory sales-to-dealers for more than 300 consumer tech products.

Overall, US sales of connected devices are projected to reach 715 million units in 2018 — a 6.6% increase year-over-year. Specific products projected to contribute significantly to this growth include smart speakers, smart home, virtual reality (VR), drones, and wearables. 

“Consumers are rapidly adopting new, emerging technology products — with voice-activated smart speakers as the stand-out of 2017 and 2018 — sparking growth in smart home devices, as voice interaction adds a new level of convenience and excitement to our lives,” said Brian Markwalter, senior vice president of research and standards, CTA. 

“At the same time, core categories – such as smartphones, laptops and TVs – continue to surpass expectations. 2018 will prove to be a milestone year for TVs, especially as LCD 4K UHD TVs make up half of all TVs sold in 2018.”

The top five revenue categories will contribute just over half of total wholesale industry revenue (51%) in 2018.

Smartphones: Following the introduction of new flagship models from major manufacturers in 2017, smartphones will continue to anchor the industry and see slight growth in 2018. Unit volume will reach 189 million smartphones (two% increase) shipping in 2018, with revenues expected to reach $62.9 billion (three% increase).

Laptops: In 2018, the commercial and consumer laptop market will sell 50.1 million units, up three% over last year, and earn $28.4 billion in revenue. Convertible models remain a high-growth area within computing.

Televisions: Performing better than expected in 2017, unit sales of total digital displays in 2018 are projected to reach 44.2 million units (two% increase) and $22.1 billion in revenue (two% increase). Future category growth will be driven by next gen features.

4K Ultra High-Definition (4K UHD): For the first time, 4K UHD TVs will make up half of all total digital displays sold in 2018, with unit sales forecast to hit 22 million units (27% increase) generating $15.9 billion in revenue (14% increase).

Automotive Electronics: Factory-installed automotive technology, from driver-assist features to entertainment systems, is projected to contribute $15.9 billion in revenue (5.9% increase) – the result of strong automotive sales, propelled by a rising tide of tech, from sensors and artificial intelligence to safety and infotainment systems.

Tablets: After tremendous adoption in recent years, some tablet sales have been cannibalized by convertible, 2-in-1 laptops as standalone tablet adoption has leveled off and replacement cycles have slowed. Tablet sales will decline in 2018. CTA expects sales of 45.6 million units (12% decrease) and revenues of $12.5 billion (13% decrease).

CTA publishes the US Consumer Technology Sales and Forecasts twice a year, in January and July, reporting US factory sales-to-dealers. It was designed and formulated by CTA, the most comprehensive source of sales data, forecasts, consumer research and historical trends for the consumer technology industry. Multi-year projections cannot account for unpredictable factors such as changes in trade laws, interest rates and federal policy.

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