Tech Industry Set to Grow by Six Percent
October 31, 2018
- Author: Jack Cutts
September/October 2018
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The results are in from CTA’s biannual U.S. Consumer Technology Sales & Forecasts report and analysts predict strong growth of six percent in 2018, up from the healthy estimate of 3.9 percent issued during the January 2018 forecast period. Smartphones and LCD TVs continue to drive unit growth while still-emerging categories like streaming services, smart home and smart speakers give consumers something new and exciting to latch on to.
A large proportion of revenue growth in the technology industry comes from the world of smartphones, where the introduction and mass adoption of ultra high-end devices like the iPhone X and Samsung Galaxy S9 have taken the average wholesale price of a smartphone to new heights, reaching $461 per device, up from $411 in 2017. Even as sales of smartphones are slowing down, CTA still sees nearly 170 million units being sold in 2018.
LCD TVs are another top category on revenue basis that continues to perform. The industry will ship $19.7 billion worth of television sets. Among the 40.3 million sets to be sold in 2018, almost 46 percent of them will be 4K Ultra HD capable and nearly all of them (87 percent) will be smart TVs. OLED TVs are finally in the mass market and available at retailers nationwide. OLED will ship 772,000 units in 2018 and is expected to cross the one million unit mark in 2019. And just when you thought picture quality could not get any better, rumor has it that 8K sets will begin shipping in 2019. Perhaps we will see some production ready 8K TVs at CES 2019.
Rounding out the top product categories on a revenue basis, laptops continue to perform on the strength of demand for Chromebooks as well as the continued decline of desktops. Step into any college lecture hall and be amazed at the nearly 100 percent laptop ownership rate on display. There is no clearer indication of the shift away from desktops, a story reinforced by the shipment of just over 50 million laptops in 2018, accounting for an impressive $28.3 billion in industry revenue this year. By 2022, laptops will account for over $30 billion in revenue, dwarfing desktop PCs by a factor of four.
Connecting the Industry For the past two years, smart home has been a headline category. Notably, smart speakers have risen to prominence in the home with 39 million units shipping 2018, up from 27 million in 2017. While there may be a limit to the number of smart speakers consumers will ultimately demand, there seems to be plenty of room to run on building the smart home of the future. IP/Wi-Fi cameras will see 40 percent growth in 2018 while smart doorbells will double in units from 1.4 million to over 2.8 million sold in 2018. Connected home products and smart speakers combined now represent a whopping $7.7 billion in annual revenue for the industry.
Unfortunately, looming on the horizon is a brewing trade war between the U.S. and China that promises to have potentially serious effects on the technology industry. It is far too early to quantify the impact to the industry’s near-term fortunes, but any tariffs that do go into effect will likely impact consumers’ wallets. In the meantime, the consumer technology industry continues to march forward, one innovative product at a time.
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