Retail sales of tech products in the US are expected to fall 2.2 percent this year to USD 406.8 billion, according to an updated forecast from the Consumer Technology Association. Pressure on consumer spending from the coronavirus pandemic will result in lower revenues for most of the big product categories, including smartphones, laptops and TVs. Streaming services and connected health devices are expected to perform better than previous estimates due to increased demand during the pandemic.
This will be the first year of lower sales in the industry since 2009. Looking ahead to 2021, CTA projects tech industry revenue will rebound with revenue growth of 5.2 percent next year.
Smartphone market down 6%
Smartphones are the largest revenue generator in the industry. This segment is expected to fall 6 percent to 153 million units and USD 72 billion in revenue in 2020. One of the few growth areas is 5G phones, which are forecast up 800 percent to over 14 million units this year, generating USD 11 billion in revenue.
Spending on streaming services has risen amid stay-at-home orders and is projected to reach a record USD 86 billion in 2020, up 14 percent from the previous year. Video streaming will grow an estimated 23 percent to USD 27 billion, audio streaming is forecast up 21 percent to USD 8 billion, and video game software and services will grow 10 percent to USD 40 billion. With new consoles coming on the market later this year, the gaming systems market is expected to grow 5 percent to 10 million units in 2020, generating revenues of USD 3.9 billion.
Smart displays, smart doorbells growth drivers
Smart home products are expected to grow in units but post lower revenues. This includes products such as smart speakers and displays, smart appliances, smart doorbells and locks, Wi-Fi cameras, smart thermostats and home robots. The CTA estimates 88 million units sold in 2020, up 12 percent from the previous year, and revenues down 6 percent to USD 13 billion. The main growth drivers are smart displays, smart doorbells and smart door locks.
In the wearables market, the CTA expects sales of 58 million smartwatches, fitness activity trackers and connected health monitoring devices in 2020, up 4 percent over last year. Revenue in this segment is projected down 4 percent to USD 8.4 billion. Stronger growth will be seen in the wireless earbuds market, with shipments up an estimated 50 percent to 67.5 million units, earning almost USD 8 billion in revenue (up 29%).
