The Consumer Technology Association (CTA)® announced its first U.S. Consumer Technology Software and Services Industry Forecast today. The report shows that software and services account for 31% ($151 billion) of the U.S. consumer technology market in 2023. The sector’s rise is driven by a broadening portfolio of subscription services including new offerings like Digital Therapeutics (DTx). It finds consumers want a seamless experience when using different services, and service providers will continue to merge.
Based on CTA’s U.S. Consumer Technology One-Year Industry Forecast, this report reveals how software and services are evolving traditional views of how content is consumed. It previews how AI, IoT, cloud services and connectivity create new possibilities as designers leverage new tools to deliver compelling products. The category will contribute $1 billion in new spending to the industry this year, balancing flat demand for hardware.
“The rise of digital therapeutics, gaming and streaming offerings add vibrancy and choice to the consumer technology industry, offering entertainment on the go and the ability to manage your health,” said Rick Kowalski, Sr. Director, Business Intelligence at CTA. “Hardware remains important, but services are an essential part of the customer experience. They are expanding the possibilities of what we can do with our devices and shaping the future of entertainment.”
Competition is intensifying as gamers embrace cloud gaming, subscription services offer more games, and video streaming services enter the fray to compete with console manufacturers.
Consumers flocked to connected fitness equipment during the pandemic and discovered the ease, simplicity and benefits of working out at home. As consumers seek more value and convenience, this industry will see fierce competition among incumbents, and disruptors offering a variety of workouts and access to entertaining trainers will fare better than most.
2022 marked the start of a new era of subscription video-on-demand (SVOD) as costs and churn increased across the streaming video space. Streaming providers have seen subscriber growth thanks to ad-supported VOD (AVOD) offerings. Over-the-top (OTT) and SVOD are likely to unify as traditional SVOD players look to consolidate or bundle offerings, adding sports and live programming to draw in subscribers.
Security products are among the most desired for those who plan to purchase smart home tech in the coming year.
Economic uncertainty is weighing on consumers and businesses. Inflation, rising debt and dwindling savings are the biggest concerns influencing consumer spending
View the study abstract, sign up for CTA Research Insights, and look for CTA’s 2023 Ownership and Market Potential report releasing in June.
Twice each year since 1967, the CTA updates its forecast of more than 125 consumer technology products and services. This forecast serves as the benchmark for the consumer technology industry, charting the size and growth of underlying categories and the industry. It is used by manufacturers and retailers for creating product development plans; financial analysts for sizing market opportunities; industry and general media for providing context in their coverage; government staff for understanding the scope of the industry to guide policy decisions; and CTA itself for highlighting the successes and challenges of the industry.
About Consumer Technology Association
As North America's largest technology trade association, CTA® is the tech sector. Our members are the world's leading innovators – from startups to global brands – helping support more than 18 million American jobs. CTA owns and produces CES® – the most influential tech event in the world. Find us at CTA.tech. Follow us @CTAtech.