Tech for the Holidays

CTA’s 28th Annual Consumer Technology Holiday Purchase Patterns report, released in late fall, highlights many consumer technology products that could be flying off the shelves during the holiday shopping season. With October-December typically accounting for 20% to 25% of yearly revenues, sales during the holidays are vital for the technology industry.

According to CTA’s report, we expect the 2021 holiday season to be similar in terms of revenues to the 2020 period. We attribute this lack of growth to the supply chain disruptions that have limited retailers’ ability to keep up with demand.

5G and Foldable Smartphones

This year CTA expects consumers to spend big on upgrades, most notably on purchasing the newest 5G smartphones. All the major manufacturers released new phones that operate on the 5G spectrum and wireless phone carriers are eager to switch as many customers as possible to the new technology. As a result, CTA estimates that 5G smartphones will sell over 159 million units in 2021, almost 70% of all smartphone sales this year.

To put that in perspective in 2020, 5G smartphones contributed to only 12% of all sales. In all, CTA expects 5G smartphone sales to generate over $72.5 billion in shipment revenues for 2021. Another feature gaining momentum in the smartphone industry are rollable or foldable phones. We estimate that rollable or foldable smartphones will generate $3.8 billion in shipment revenues in 2021, an increase of 369% from 2020.

Top Tech

Another big-ticket item consumers plan to give during the holidays are laptops. Due to the pandemic and shift to more remote working and virtual education, the demand for laptops skyrocketed in 2020 and has carried over to 2021. Before the pandemic we estimated over 52 million laptops would be sold in 2021. Just a year later we estimate that over 75 million will be sold in 2021 generating revenue over $44 billion. Despite shipping concerns, demand this high cannot continue and we predict a return to earth in 2022 as only 68 million units will be shipped in 2022, a decrease of 10%.

The “new” next-gen consoles that were released last year are still battling various market disruptions which have caused demand to stay at an all-time high as gamers continue to wait for the opportunity to buy new consoles. Despite the shipping concerns, CTA estimates that unit shipment volumes for home gaming consoles will see moderate growth in 2021 and at 7% in 2022. CTA forecasts that home gaming consoles will generate over $5 billion in shipment revenues in 2021 an increase of 20% compared to 2020. Gaming software also tops gift lists this year and consumers are expected to spend over $47 billion on gaming software products in 2021.

Another huge assortment of products that consumers are predicted to spend on this holiday are wearable technologies such as fitness trackers, smartwatches and connected exercise equipment. CTA estimates these products will generate almost $13 billion in shipment revenues for 2021, which would be a 12% increase from 2020. This industry is still growing, and we project that by 2025 it will generate over $16.3 billion in shipment revenues.

With the supply constraints still impacting the industry many are unsure how it will affect sales during the holiday. However, from a demand standpoint, the industry could not have a brighter future.