The consumer technology industry posted an 8 percent decline in revenue in 2022, with a 5 percent decline seen this year and flat growth expected in 2024, with a return to growth seen in 2025.
That’s according to the latest Future of Technology forecast from the research firm NPD Group, which was launched last week in time for the start of CES.
However, unit sales of TVs and home automation devices are expected to maintain growth throughout the period in question, especially as prices continue to drop and sizes get bigger.
“The replacement cycle for many technology products is three to four years and, in some cases, more. That, in conjunction with challenging economic conditions, is slowing spending in the industry,” Paul Gagnon, vice president and technology industry advisor for NPD, said in the release.
“Upgrade cycles for pandemic-driven purchases will ramp up in 2024, creating opportunity. In addition, manufacturers that introduce innovative products and technologies, which were somewhat lacking during the pandemic, will see success.”
“Even during challenging economic times, the consumer electronics industry tends to perform well. If consumers cut back spending on more traditional entertainment activities, devices and services can be easy and available replacements,” Ben Arnold, executive director, and consumer technology industry analyst for NPD said in the same forecast.
“Despite near-term economic headwinds, consumer electronics sales will remain above 2019 levels and industry average selling prices are expected to grow by the end of the forecast period in 2025 – a sign that tech remains a household spending priority.”
Also during CES last week, the Consumer Technology Association itself predicted retail revenues of $485 billion for 2023. This is down from an estimated $497 billion last year, and $512 billion in 2021, but up from the $467 billion figure in 2020.
“The technology industry is a deflationary force in the global economy,” Gary Shapiro, president, and CEO of CTA said in the release. “The constantly evolving nature of technology leads industries to find newer, more efficient ways to drive commerce. CES has become the destination for innovators who are making business more efficient and improving our quality of life in industries like agriculture, transportation, health and so many more.”