LAS VEGAS – Streaming services will help drive the U.S. consumer technology industry to a record-breaking US$351 billion in retail revenues ($266 billion wholesale) in 2018, 3.9% higher than in 2017,
Consumer spending on music and video streaming services in 2018 is predicted to reach $19.5 billion in revenue, 35% higher than last year. The forecast comes from the latest edition of the Consumer Technology Association’s (CTA) semi-annual industry report, the U.S. Consumer Technology Sales and Forecasts. For the first time ever CTA added streaming services sales, which include Internet-enabled services that deliver on-demand or linear video content and on-demand audio content. It’s interesting to note that if streaming services were left out , total industry revenue would increase by only 2.2% this year.
Given the shift to streaming music and video services, the CTA says it’s time to begin more closely tracking the rapid growth of this new technology both to capture changes in how consumers are accessing content and to accurately measure the uptake of devices they are using to access these burgeoning services.
The CTA says it’s no longer enough for products to be merely connected to the Internet or home network. Consumers expect intelligence in their devices, and they are seeking simple ways to manage and interact with the numerous connected products in their lives.
"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" said Gary Shapiro, president and CEO, CTA.
Emerging tech to expand
Overall, U.S. sales of connected devices are projected to reach 715 million units in 2018 – a 6.6% increase year-over-year. Sales will be dominated by smart speakers, smart home products, virtual reality gear, drones and wearables. (see infographic below)
Sales of voice-controlled smart speakers, (dominated by Amazon Echo and Google Home) will skyrocket this year. Unit sales increased 279% in 2017, and CTA projects 2018 unit sales will reach 43.6 million units (a 60% increase) to earn $3.8 billion in revenue (a 93% increase). The popularity of smart speakers will have a ripple effect on the smart home market and CTA expects sales (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 40.8 million units in 2018 (41% increase over 2017), earning $4.5 billion (34% increase).
Gamers will help drive sales in the Virtual Reality (VR) category with unit shipments of VR/AR headsets and eyewear projected to grow to 4.9 million units this year (25% increase) tallying $1.2 billion in revenues (18% increase).
Total drone sales are expected to reach record highs of 3.7 million units in 2018 (20% increase) earning $1.2 billion in revenue (a 17% jump). The total health, fitness and sports tech market (including fitness activity trackers, other health and fitness devices, hearables , over-the-counter hearing devices, smartwatches and sports tech such as a smart basketballs or baseball bats) is expected to reach sales of 49.3 million units in 2018 (4% increase) and earn $6.4 billion (1% increase).
"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."
Smartphones still driving mature tech market
Smartphones continue to anchor the industry and see slight growth in 2018. Unit volume will reach 189 million smartphones (2% increase) shipping in 2018, with revenues expected to reach $62.9 billion (3% jump).
CTA expects the laptops market to sell 50.1 million units, up 3% over last year, and earn $28.4 billion in revenue. Convertible models remain a high-growth area within computing.
The television market performed better than expected in 2017, unit sales of total digital displays in 2018 are projected to reach 44.2 million units (2% increase) and $22.1 billion in revenue (also a 2% increase). 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).
Strong automotive sales will propel the factory-installed automotive technology market, which ranges from driver-assist features to entertainment systems, with $15.9 billion in revenue (5.9% increase).
Tablet sales continue to be 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% drop) and revenues of $12.5 billion (13% decrease).
Cartt.ca consumer electronics editor John Bugailiskis is in Las Vegas this week covering the Consumer Electronics Show.
Click to enlarge images.
