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2018 #Tech Industry Revenue to Reach Record $351 BillionEmerging technologies and the resilience of historically leading categorieswill drive the U.S. consumer technology industry to a record-breaking $351billion in retail revenues ($266 billion wholesale) in 2018 – 3.9 percenthigher than 2017, according to new research from the Consumer TechnologyAssociation (CTA).Unveiled today in advance of CES® 2018, the latest edition of CTA’s semi-annual industry report, the U.S. Consumer Technology Sales and Forecasts,includes for the first time a projection for consumer spending on music andvideo streaming services – valued at $19.5 billion in revenue, 35 percenthigher than just last year. CTA added streaming services sales – which includeinternet-enabled services that deliver on-demand or linear video content(e.g., Netflix, Hulu and Sling TV) and on-demand audio content (e.g., Spotify,Pandora or Apple Music) – to better capture the full expanse of the everevolving and expanding consumer technology market. Excluding the addition ofstreaming services, total industry revenue would increase by 2.2 percent in2018.“Technology is improving our lives in more ways than ever – and consumerenthusiasm is growing just as quickly as companies can bring their innovationsto market,” said Gary Shapiro, president and CEO, CTA. “Our forecastincorporates several key economic factors including a strong stock market,continued job growth and stable rules for international trade to forecastthese record-setting sales for breakthrough technologies and longtime marketleaders alike. And the driving themes of 2018, including voice computing,artificial intelligence and connectivity that make our lives better and moreefficient, will be on display across the show floor this week at CES 2018.”CTA is the nation’s largest tech trade association – its semi-annual reportserves as a benchmark for the U.S. consumer technology industry, charting thesize and growth of underlying product categories. The CTA consensus forecastreflects U.S. factory sales-to-dealers for more than 300 consumer techproducts.Emerging Technologies Expand Overall, U.S. sales of connected devices are projected to reach 715 millionunits in 2018 – a 6.6 percent increase year-over-year. Specific productsprojected to contribute significantly to this growth include:Smart Speakers: Coming off of a tremendous 2017 holiday season, voice-controlled smart speakers, including Amazon Echo and Google Home, are goinggangbusters. Unit sales increased 279 percent in 2017, and CTA projects 2018unit sales will reach 43.6 million units (60 percent increase) and earn $3.8billion in revenue (93 percent growth). As voice recognition technology isintegrated into more speakers at a variety of price points, smart speakers isa category to watch in 2018.Smart Home: The popularity of smart speakers will have a ripple effect on thesmart home market, as consumers discover the benefits of voice-activated homeautomation. CTA expects sales in the category – including smart thermostats,smart smoke and carbon monoxide detectors, IP/Wi-Fi cameras, smart locks anddoorbells, smart home systems, and smart switches, dimmers and outlets – toreach 40.8 million units in 2018 (41 percent increase over 2017), earning $4.5billion (34 percent increase).Virtual Reality (VR): Popularity among gamers and an increasingly competitivemarket continue to drive growth for VR/AR headsets and eyewear, with unitshipments projected to grow to 4.9 million units this year (25 percentincrease) tallying $1.2 billion in revenues (18 percent increase).Drones: Total drone sales are expected to reach record highs of 3.7 millionunits in 2018 (20 percent increase) earning $1.2 billion in revenue (17percent increase). CTA’s forecast also delineates U.S. drone sales for unitsbelow and above 250 grams, the FAA’s division for mandatory droneregistration. Drones below 250 grams are expected to reach just over 2.2million units this year, while drones above 250 grams will reach 1.5 millionunits shipped.Wearables: The total health, fitness and sports tech market – includingfitness activity trackers, other health and fitness devices, hearables, over-the-counter hearing devices, smartwatches and, for the first time, sports tech(such as a smart basketballs or baseball bats) – is expected to reach sales of49.3 million units in 2018 (four percent increase) and earn $6.4 billion (onepercent increase).“Consumers are rapidly adopting new, emerging technology products – withvoice-activated smart speakers as the stand-out of 2017 and 2018 – sparkinggrowth in smart home devices, as voice interaction adds a new level ofconvenience and excitement to our lives,” said Brian Markwalter, senior vicepresident of research and standards, CTA. “At the same time, core categories –such as smartphones, laptops and TVs – continue to surpass expectations. 2018will prove to be a milestone year for TVs, especially as LCD 4K UHD TVs makeup half of all TVs sold in 2018.”Maturing Technologies ContinuingThe top five revenue categories will contribute just over half of totalwholesale industry revenue (51 percent) in 2018.Smartphones: Following the introduction of new flagship models from majormanufacturers in 2017, smartphones will continue to anchor the industry andsee slight growth in 2018. Unit volume will reach 189 million smartphones (twopercent increase) shipping in 2018, with revenues expected to reach $62.9billion (three percent increase).Laptops: In 2018, the commercial and consumer laptop market will sell 50.1million units, up three percent over last year, and earn $28.4 billion inrevenue. Convertible models remain a high-growth area within computing.Televisions: Performing better than expected in 2017, unit sales of totaldigital displays in 2018 are projected to reach 44.2 million units (twopercent increase) and $22.1 billion in revenue (two percent increase). Futurecategory growth will be driven by next gen features.4K Ultra High-Definition (4K UHD): For the first time, 4K UHD TVs will make uphalf of all total digital displays sold in 2018, with unit sales forecast tohit 22 million units (27 percent increase) generating $15.9 billion in revenue(14 percent increase).Automotive Electronics: Factory-installed automotive technology, from driver-assist features to entertainment systems, is projected to contribute $15.9billion in revenue (5.9 percent increase) – the result of strong automotivesales, propelled by a rising tide of tech, from sensors and artificialintelligence to safety and infotainment systems.Tablets: After tremendous adoption in recent years, some tablet sales havebeen cannibalized by convertible, 2-in-1 laptops as standalone tablet adoptionhas leveled off and replacement cycles have slowed. Tablet sales will declinein 2018. CTA expects sales of 45.6 million units (12 percent decrease) andrevenues of $12.5 billion (13 percent decrease).### Related