The latest version of CTA’s industry report, U.S. Consumer Technology Sales and Forecasts, said 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.
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. 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.
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 units 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.
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).
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 division 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.
“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.”