Looking at U.S. wholesale revenues of consumer technology products only (excluding services), we observed 6.2 percent growth in 2018, but as we look to 2019, revenue is expected to reach $300.9 billion, a 2.8 percent improvement. The top five revenue categories are smartphones, laptop PCs, LCD TVs, factory-installed automotive technology and tablet PCs. Collectively, these categories account for $155.9 billion, 51.8 percent of total wholesale revenues (excluding services). This is a decline from 53.1 percent of total revenue in 2018.
This shift is important. What it means is while large volume categories continue to determine the growth trend, emerging sectors are contributing more. For example, wireless earbuds (46 percent revenue growth in 2019) continue to benefit from the shift in consumers mainly using smartphones for music and the excitement around true wireless earbuds. Smart home device sales (up 17 percent) remain on the upswing as consumers adopt their first anchor products (often a smart thermostat or Wi-Fi camera). The enormous success of smart speakers is expected to result in 36.6 million units shipped in 2019. An encouraging point for the industry, these ascendant, volume driven categories are purchased more frequently than other products like TVs, cameras and PCs.
Smartphones are expected to account for more revenue ($80 billion) than the other top four revenue categories combined this year. With changes in smartphone subsidy plans, consumers are moving towards phones with larger, high resolution screens and upgraded artificial intelligence (AI) and photo capabilities. Next on the horizon for smartphones are 5G-enabled devices and hardware.
CTA’s forecast estimates 2.1 million 5G-enabled smartphones and 1.5 million 5G home gateways will ship in 2019 as network carriers begin their commercial deployments. The growth in streaming services is also a re¡ ection of advancements in mobile technology. As the focus of digital life revolves around the smartphone, mobile services like music and video streaming (revenues growing 22 percent and 27 percent in 2019, respectively) will become a larger component of how users access content.
Despite a decline in the computing market (revenue fell five percent in 2019), computing continues to see pockets of growth. Laptop sales are expected to increase as unit demand grows two percent in 2019 while unit demand for tablets in 2019 (units down two percent compared to 2018) has stabilized as the market matures and new, prosumer models offer advanced features and applications.
Overall, 2019 is a bright spot for the industry assuming relative stability in the domestic and global economy. For more details on CTA’s U.S. Consumer Technology Sales and Forecasts, visit CTA.tech/research.
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