The growing popularity of streaming services, artificial intelligence (AI)-enabled devices and in-vehicle technology will help drive the U.S. consumer tech industry to a record-breaking $401 billion in retail revenues in 2019.
The estimate represents a growth of 2.2% year over year, according to a midyear report from the Consumer Technology Association (CTA), which tracks U.S. factory consumer tech sales and also owns CES, the consumer technology trade event.
“Enthusiasm for AI-powered technologies is skyrocketing. More consumers are discovering for themselves how tech innovation can change their daily lives for the better,” said Gary Shapiro, CTA president and CEO.
“And with 5G delivering the faster connectivity we’ll need for anytime-anywhere streaming, smarter home robotics and more advanced vehicles, consumer excitement will only grow,” he added.
The CTA expects 5G-enabled devices to reach 2.1 million units sold and generate $1.9 billion in revenue in 2019.
The report cites smart home, smart speakers, home robots, wireless earbuds and smart watches as emergent technologies. Consumer spending on smartphones, laptops, televisions, in-vehicle tech and streaming services will push consumer tech revenue to new highs, it said.
Streaming Service Sales Projected to Grow More
In the streaming services category, consumer spending on software and services is projected to reach a new high of $75.6 billion in 2019 (a 14% growth over last year).
The CTA noted at its annual CES event this year that spending on media streaming will account for about one-third of the sales projection.
Table: Projected Consumer Spending in Streaming Services
|Video||Live TV streaming and exclusive content through subscriptions will push consumer spending on video streaming services to $17.7 billion in 2019, up 25%|
|Music||On-demand music services including Apple Music, Pandora and Spotify will cross $8 billion in revenue, up 33% as increased adoption of products such as wireless earbuds and smart speakers drive more music subscriptions|
|Gaming||A revolutionary shift toward cloud-based streaming models, subscriptions and growing in-game purchases will push the gaming software and services category to $38.9 billion in revenue in 2019 – an 11% increase.|
Source: CTA 2019 U.S. Consumer Technology Sales and Forecasts Midyear Report
In the 5G Launch Year, Smartphone Sales Fall
Still, worldwide smartphone shipments are down 6.6% year over year as of the first quarter of 2019, according to the International Data Corporation.
Smartphone vendors shipped a total of 310.8 million units in 1Q19, which marked the sixth consecutive quarter of decline.
In 2018, smartphone shipments dropped 4.1% over 2017, which was inclusive of a first quarter that was down 3.5% – just half of what the market is experiencing one year later.
According to IDC, the quarter’s results “are a clear sign that 2019 will be another down year for worldwide smartphone shipments. The only highlight from a vendor perspective was Huawei, which made a strong statement by growing volume and share despite market headwinds.”