The skyrocketing popularity of streaming services and wireless earbuds along with 5G connectivity and artificial intelligence (AI)-enabled devices will drive revenue growth for the US consumer tech industry to a record USD 422 billion in retail revenues in 2020, nearly 4 percent growth over 2019, according to a new Consumer Technology Association (CTA) report unveiled at CES 2020.
New for 2020, CTA’s forecast also provides an overall number for digital health devices including smartwatches, fitness trackers and connected health monitoring devices such as blood pressure monitors and smart scales. The digital health category is projected to sell 64 million devices and total USD 10 billion in 2020.
High-growth emerging categories
Spending on software and streaming services (including music, video and video gaming) is projected to reach a new high of USD 81.2 billion in 2020 up 11 percent over last year. Award-winning original content and more big entrants to the video streaming wars will push consumer spending to USD 24.1 billion in 2020, up 29 percent.
On-demand music services including Apple Music, Pandora and Spotify will total USD 9 billion in revenue, up 15 percent, with room to grow as more and more consumers adopt smart speakers and wireless earbuds.
Growing in-game spending and subscribers will push the video game software and services category to USD 38.3 billion in revenue this year, up 5 percent. Devices such as Apple AirPods and Samsung Galaxy Buds will help propel the wireless earbuds category in 2020 to nearly 67 million units in 2020 (up 35 percent), earning USD 8.2 billion in revenue (up 31 percent), after a breakaway year of sales in 2019.
Safety is a key driving force in the smart home category. CTA expects smart home sales – including smart doorbells and locks, Wi-Fi cameras, smart thermostats, smart smoke and carbon monoxide detectors, and smart home security kits – to reach 35.2 million units (15 percent growth) and USD 4.3 billion (4 percent increase).
Consumers are upgrading their smart speakers, such as Google Home, Amazon Echo or Apple HomePod, to voice-enabled devices with a display screen. Unit sales are projected to reach 39 million units sold (up 5 percent over last year) and USD 4.2 billion in revenue (14 percent increase) in 2020.
Top revenue categories
After a dip in 2019, smartphones will recoup losses with an uptick in 5G-enabled smartphone shipments this year. Smartphones are projected to reach 166 million units, up 2 percent, and earn USD 79 billion dollars in revenue, up 3 percent, in 2020. 5G smartphones will hit their stride, with 20.3 million units sold (a 12x growth spurt over last year’s initial introduction) and generate USD 15.3 billion in revenue (10x percent jump), with the build out of U.S. 5G functionalities. Maintaining their lead as the most popular personal computing device, nearly 53 million laptops will ship in 2020, up 1 percent over 2019, and they will earn USD 33.3 billion in revenue (up 1 percent).
TVs continue their reign as the flagship technology in many US homes. Overall, TV manufacturers will ship 40.8 million units in 2020 (2 percent increase) driving USD 23.4 billion in revenue (flat with 2019), as new TV features drive interest for consumers.
Replacement upgrades will be driven by bigger screens and TVs featuring 4K Ultra High Definition (4K UHD) resolution and high dynamic range (HDR). In 2020, 4K UHD sets will account for 25 million units (12 percent increase) and USD 17.6 billion in revenue (2 percent increase). And 8K UHD TVs will cross the one billion-dollar milestone (USD 1.6 billion) in revenue, selling 504,000 units.
Factory-installed in-vehicle technology will grow by 6 percent to USD 18.5 billion in revenue in 2020 as autonomous safety and entertainment features in new car models pave the way toward more revenue growth. More manufacturers are including advanced driver-assistance systems (ADAS) features such as automatic emergency braking systems, active lane keeping and more.
