The Consumer Technology Association released a mid year report citing three emerging technologies that will help create growth in consumer electronics. These three technology are also expected to help drive growth in car audio and infotainment.
According to the Consumer Technology Association (CTA), artificial intelligence (AI), voice-recognition technology and fast connectivity will help generate six percent growth in consumer electronics as they help to improve smart speakers and phones and we would add, also car infotainment. These new technologies will help raise sales to $377 billion at retail in consumer electronics this year.
AI will have an impact on the connected car market, said CTA VP Market Research Steve Koenig, adding of the general CE market, ” …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.”
Factory-installed auto technology, including driver-assist features, is projected to see a six percent increase in sales to dealers in 2018 to $15.7 billion.
Smart speakers such as the Amazon Echo are skyrocketing in growth not seen since tablets. The category is expected to sell 39.2 million units to dealers this year, representing 44 percent growth. In dollar sales it will reach $3.2 billion or 64 percent growth after only three years on the market.
Smart home products will grow by 43 percent in units and 36 percent in dollars to 41.2 million units in 2018 and $4.6 billion in revenues, predicts the CTA. Smart home products include 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.
Other Emerging Categories
Other key categories seeing growth (as measured in sales to dealers):
- Whole Home Wi-Fi Solutions: Also known as mesh networks, devices such as the eero Home Wi-Fi system, Google Wi-Fi or Netgear Orbi, are experiencing high growth due to their simple home network set-up and ability to provide strong internet coverage throughout the home. These devices will cross the $1 billion revenue milestone for the first time in 2018 (103 percent increase) and sell 4.3 million units (115 percent increase).
- Drones: Total drone sales are expected to reach 3.4 million units (eight percent increase) and just over $1 billion in revenue (four percent growth) in 2018, as more consumers and businesses adopt drones for photography, recreation, drone racing and more.
- Wearables: The total health and fitness market – including fitness activity trackers, other health and fitness devices, smartwatches, personal sound amplification products and sports tech (such as a smart baseball bats or basketballs) – will reach sales of 46.1 million units in 2018 (nine percent increase) and earn $6.4 billion (ten percent increase). As some companies turn their focus from fitness trackers to smartwatches, this subcategory is expected to see 15.3 million units shipping in 2018, a 26 percent increase over 2017 with revenues of $3.7 billion, a 19 percent increase.
Top 3 Revenue Drivers – The Three Screens
The top three revenue drivers of the industry showing continued strength:
- Smartphones: Smartphones performed better than expected in 2017 as consumers showed more interest in high-end models. Smartphone sales are expected to increase by 13 percent this year to $78 billion, up from $69 billion last year. Unit shipments are expected to grow one percent to 169.4 million in 2018. Next year will mark the introduction of the first smartphones with 5G connectivity on the market. CTA expects U.S. sales of 5G smartphones in 2019 to reach 2.1 million units and cross $1 billion in revenue, with triple digit increases through 2021.
- Laptops/Notebook PCs: Convertible models and cloud-based laptops remain a high-growth area within computing. Unit sales for laptops are projected to sell 50.1 million units (three percent growth) and earn $28.4 billion in revenue (relatively unchanged from 2017).
- Televisions: Total digital displays demonstrated strong performance in 2017 and as a result, consumer demand in early 2018 slowed. CTA now projects total unit sales of digital displays will reach 40.4 million units (six percent decrease from 2017), while higher average wholesale prices hold total revenue at $21 billion, on par with 2017. Future growth will be driven by Next Gen screen technology. 4K Ultra High-Definition (4K UHD) TVs are forecast to sell 18.6 million units (11 percent increase) and generate $14.3 billion in revenue (seven percent increase). OLED unit sales are expected to reach 772,000 (45 percent increase) and earn $1.4 billion in revenue (42 percent growth) this year – and in 2019, OLED display revenue will rise 50 percent to cross the $2 billion mark.
- Streaming Services Rise: Consumer spending on subscription music and video streaming services is projected to reach $19.7 billion in revenue in 2018 (38 percent higher than last year). Spending on video streaming content (e.g., Netflix, Hulu and Sling TV) is expected to reach $13.4 billion in revenue and on-demand audio content (e.g., Spotify, Pandora or Apple Music) is projected to bring in $6.3 billion in revenue in 2018.
“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.”
CTA publishes the U.S. Consumer Technology Sales and Forecasts twice a year, in January and July, reporting U.S. factory sales-to-dealers. For more information, visit CTA.tech/salesandforecasts.