Streaming, 5G will lead growth
By John Bugailiskis
ARLINGTON, VA – While Covid-19 continues to spread out of control in the U.S., the Consumer Technology Association’s (CTA) sales report, released at the virtual CES 2021 this week, found pandemics can be very good for its members’ business. While the outbreak has created devastating economic and social disruption for many, it’s actually been a real benefit for tech sales.
In fact, retail sales revenue for the technology industry will reach US$461 billion in the U.S. in 2021 – a 4.3% increase year-over-year – according to the CTA. The association expects tech sales to remain strong this year, particularly for streaming services, 5G connectivity and digital health services. Much of this is a result of the pandemic isolating people, who have increasingly turned to technology to remain entertained and connected.
“In 2020 we witnessed how technology and innovation really rushed in to provide a myriad of solutions across the economy and I would even go further to say it saved a lot of lives and it continues to save lives,” claimed Steve Koenig, vice-president of research at CTA, in an online presentation to reporters on Monday.
Koenig said the pandemic helped “fast forward” the adoption of tech across the globe. The impact he said was most pronounced in e-commerce deliveries, telemedicine, remote learning and in streaming video.
“In streaming video it took Disney+ just five months to hit 50 million global subscriptions. It took Netflix seven years to so the same,” noted Koenig.
Total spending on streaming services and software is projected to reach a record high of US$112 billion in 2021 (11% growth over 2020). This follows 31% growth in 2020 over 2019. The CTA found that exclusive content and cord-cutting are driving multiple subscriptions per household and will increase spending to US$41 billion in 2021, up 15% over last year.
Music, audio book and podcast listening, with services including Apple Music and Pandora are expected to reach US$10 billion in revenue, up 19% over last year. CTA noted that U.S. households are playing video games more than ever before, for entertainment, or staying connected socially. CTA projects the video game software and services category will reach US$47 billion in revenue this year, up 8% from 2020.
And anyone predicting a big decline in TV set sales does not see the big picture, literally. Households channeled discretionary dollars into upgrading TVs in a record-setting year for shipments in 2020. CTA expects steady demand for displays in 2021 as TVs remain the centerpiece for entertainment in homes. Television shipments will drop 8% to 43 million units in 2021, but that’s still the second-highest volume on record, while revenues will decline just 1% to US$22 billion. Growth areas for TVs in 2021 include sets over 70-inches (3.3 million units, up 6%) and 8K Ultra High-Definition TVs (1.7 million units, up 300%). Yes, that new 4K TV you got at Christmas is already outdated.
Koenig also noted the pandemic had a major impact on accelerating investment in 5G CapEx and R&D by 10.8% to US$260 billion in 2020. This according to a Qualcomm, IHS Market 2020 5G Economy Study from November 2020. The same study predicts the US and China will lead the 5G rollout, investing $1.3 trillion and $1.7 trillion respectively through 2035. 5G-related jobs will also increase to 22.8 million (up from 22.3M) over the next 15 years.
CTA also predicts rapid growth for AI and machine learning, robotic process automation ($2 billion in 2021), natural language processing, and cloud computing.
67 million 5G smartphones to ship in 2021
Shipments of smartphones will increase 4% to 161 million units, earning US$73 billion in revenue (up 5% over last year), following a year of slight declines. Over 67 million 5G smartphones are expected to ship in 2021 (up 298% from last year) and generate US$39 billion in revenue (a 218% jump).
The pandemic turned out to be just what the doctor ordered to help boost laptop sales, with 2020 a record year in both the enterprise and consumer sectors, as more families than ever worked and learned from home and figured out they couldn’t all share the same machine. CTA expects laptop shipments will remain strong in 2021, reaching 69 million units (up 1% over last year) and earning US$38 billion in revenue (down 2%).
For the first time ever, total wireless headphone and earbud shipments surpassed wired headphones and earbuds in 2020. True wireless earbuds, including Apple AirPods and Samsung Galaxy Buds, will drive future growth, with 91 million units expected to ship in 2021 (up 32%), representing US$9.3 billion in revenue (up 16%).
Not surprisingly, the DIY Smart Home Product category also rocketed with millions of Americans spending more time at home, and safety and convenience being top priorities. CTA expects DIY smart home products shipments to reach 99 million units in 2021(up 9%), and US$15 billion (up 3%). Category growth drivers include smart displays, smart doorbells and smart appliances.
No need for house calls
Finally, as more people monitor potential Covid-19 symptoms and chronic conditions from home using devices such as smart thermometers, pulse oximeters and blood pressure monitors, shipments of connected health monitoring devices will grow to 14 million devices in 2021 (up 35%) and earn US$845 million in revenue (up 34%). The prognosis for the entire health and fitness technology category is looking strong. Including smartwatches and fitness activity trackers, it will increase 13% in 2021 to reach 69 million units and US$9 billion in revenue (up 6%).
This year the CTA added a new category, electric bikes, to its forecast. It’s expected to grow as people remain wary of public transportation during the pandemic. In 2021, electric bikes will reach 1.6 million units, up 60%, and US$2.6 billion in revenue, up 44%.
