IoT adoption, emerging tech drives industry growth
Midyear revenue forecast wearables, smart home devices and drones will deliver an increase of 1.3% according to the Consumer Technology Association
Broader adoption of the Internet of Things (IoT) and enthusiasm for emerging technology will drive the U.S. consumer technology industry to $286.6 billion in retail revenues ($224 billion wholesale) in 2016, according to the Consumer Technology Association’s (CTA) semi-annual forecast. The report says sales of burgeoning tech products such as wearables, smart home devices and drones will deliver an increase of 1.3 percent over last year’s industry revenues.
“We’re in the midst of a critical transition period, as more IoT products offer the anytime/anywhere access and seamless experiences that today’s consumers want and need,” said Gary Shapiro, president and CEO, CTA. “This is a pivotal point in consumer technology history, as emerging tech categories – virtual reality, voice-controlled digital assistants, drones – push the entire industry forward. And the value of these innovations goes far beyond entertainment- today’s technology is changing our lives for the better.”
The five largest categories of the tech industry, including smartphones, tablets, LCD televisions, laptops and desktop computers, will collectively contribute $114 billion – or 51 percent – to the tech industry’s revenue this year, and smartphones and TVs will be responsible for most of that growth in 2016. However, in 2017, for the first time in several years, these five categories combined will account for a little less than half of industry revenue.
CTA is the nation’s largest tech trade association, and its consensus forecast reflects U.S. factory sales-to-dealers for more than 300 tech products. The semi-annual report serves as a benchmark for the consumer tech industry, charting the size and growth of underlying categories.
Emerging Technology Categories:
* 4K Ultra High-Definition (4K UHD) ecosystem: 2016 will be a flagship year for 4K UHD TVs, driven in part by the market introduction of next-generation technologies like HDR.
* Wearables: Driven by the popularity of fitness activity trackers, unit sales of all wearables in 2016 are forecast to reach almost 48 million units (a 39 percent increase).
* Smart Home: CTA projects the smart home category – including smart thermostats, smart smoke and CO2 detectors, IP/Wi-Fi cameras, smart locks, smart home systems, and smart switches, dimmers and outlets.
* Drones: Drone sales are expected to reach record heights, topping 2.4 million units (up 112 percent from 2015) and $799 million in shipment revenues (an 80 percent increase from 2015).
With several global tech leaders introducing VR headsets to the consumer market in 2016, CTA expects this to be the tech sector’s overwhelming leader in year-to-year growth.
* Digital Assistant Devices: This is the first year the semi-annual CTA report has included projections for voice-activated device that provides a cloud-based artificial intelligence-powered virtual assistant, such as Amazon’s Echo.
* 3D Printing: Ever-expanding 3D printing capabilities will drive the sector’s unit sales growth to increase 56 percent from last year, to reach 171,000 units sold.
Maturing Sales Leaders
* Smartphones: CTA projects unit shipments to reach 183 million in 2016 (up five percent), while revenues will reach $55 billion (a four percent increase). As tremendous innovations in smartphone hardware over the past few years have lengthened the replacement cycle, 2017 will be the first year smartphones see a slight decline in unit sales and revenue.
* Televisions: The TV market will remain on par with 2015, with unit sales estimated to reach 39.7 million units in 2016 (down one percent) and revenues expected to reach $20 billion (a three percent increase). LCD TVs, the category leader, will contribute 38.8 million units (a one percent decline) and $19.2 billion (two percent growth). Key areas of growth are large screen sizes, 4K UHD and smart TV displays.
* Tablets: After momentous growth and widespread adoption over the past five years, tablet sales will decline again in 2016. CTA expects sales of 65 million units in 2016, a two percent decrease, and revenues of $19 billion, down five percent.
* Laptops: Unit shipments of laptops are expected to reach 25 million units in 2016, a six percent decrease. Revenues are expected to reach $15.8 billion, an eight percent drop.
* Desktops: Amid an accelerated decline, desktops are projected to sell seven million units (13 percent decrease), earning $4.6 billion (a 15 percent decrease).
“Technology is constantly and continuously reinventing itself, often cannibalizing its own growth before anything else does,” said Shawn DuBravac, Ph.D., chief economist, CTA. “The swath of emerging categories hitting the market in 2016 and the exponential growth of IoT are indelibly shaping the way we live our lives. How we use the internet, and the new products coming to market today, are changing who we are becoming.”