[July 18, 2016] |
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IoT Adoption, Emerging Tech Driving Technology Industry to Revenue Growth, says CTA Midyear Forecast
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 latest version of CTA's industry report, U.S. Consumer
Technology Sales and Forecasts, 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.
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Consumer Technology Association (CTA) July 2016 U.S. Consumer Technology Sales and Forecasts report. (Graphic: Business Wire)
"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 (News - Alert), 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
technology industry, charting the size and growth of underlying
categories.
Emerging Technology Categories:
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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 (News - Alert). CTA expects
shipments of 4K UHD displays will reach 15 million units (a 105
percent increase), and revenue will exceed $12.9 billion (a 69 percent
increase). New to the market in 2016, 4K UHD Blu-ray players will
further build the 4K UHD ecosystem with 700,000 units sold and $63
million in revenue.
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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). Fitness activity
tracker volumes will hit 28 million uits in 2016 - a 60 percent
increase from 2015 - with revenues reaching $2.2 billion - a 62
percent increase. After a year of strong growth, smartwatch unit
growth is slowing, while revenue will decline for the first time.
Units are expected to increase 15 percent to 12.2 million units,
earning $2.8 billion in revenue, a decline of eight percent.
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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 - to reach 9.5 million units sold in 2016 (a 29
percent increase). Revenue will grow to $1.3 billion (a 24 percent
jump).
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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). CTA's
forecast also delineates expected U.S. drone sales for units below and
above 250 grams, the FAA's threshold for mandatory drone registration,
expected to reach 1.6 million units (below 250 grams) and 825,000
units (above 250 grams).
-
Virtual Reality (VR): 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. Unit sales will increase by 296 percent over last year,
reaching 800,000 units sold. Total revenues are projected to reach
$432 million, a 332 percent increase this year.
-
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. Sales are projected to reach
2.2 million units (up 32 percent) in 2016 and earn $392 million in
revenue (increasing 32 percent).
-
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. Total revenues will reach $148
million, a 35 percent increase.
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 in revenue (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."
CTA's DuBravac will host a Facebook (News - Alert) Live Q&A chat to discuss the
forecast's surprising trends tomorrow, July 19 at 4PM ET. Join the
conversation on CTA's
Facebook Page.
The U.S. Consumer Technology Sales and Forecasts is
published twice a year, in January and July, reporting U.S. factory
sales-to-dealers. It was designed and formulated by CTA, the most
comprehensive source of sales data, forecasts, consumer research and
historical trends for the consumer technology industry. To download or
purchase the report, or for more information, visit CTA.tech/salesandforecasts.
About Consumer Technology Association:
Consumer Technology Association (CTA)TM is the trade
association representing the $287 billion U.S. consumer technology
industry. More than 2,200 companies - 80 percent are small businesses
and startups; others are among the world's best known brands - enjoy the
benefits of CTA membership including policy advocacy, market research,
technical education, industry promotion, standards development and the
fostering of business and strategic relationships. The Consumer
Technology Association also owns and produces CES (News - Alert)® - the
world's gathering place for all who thrive on the business of consumer
technologies. Profits from CES are reinvested into CTA's industry
services.
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