Retail Observer

RETAILOBSERVER.COM FEBRUARY 2018 56 A S S O C I A T I O N N E W S E xcitement about emerging technologies and the resilience of historically leading categories will drive the U.S. consumer technology industry to a record-breaking $351 billion in retail revenues ($266 billion wholesale) in 2018 — 3.9 percent higher than 2017, according to new research from the Consumer Technology Association (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 and video streaming services — valued at $19.5 billion in revenue, 35 percent higher than just last year. CTA added streaming services sales — which include internet-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 ever-evolving and expanding consumer technology market. Excluding the addition of streaming services, total industry revenue would increase by 2.2 percent in 2018. "Technology is improving our lives in more ways than ever - and consumer enthusiasm is growing just as quickly as companies can bring their innovations to market," said Gary Shapiro, president and CEO, CTA. "Our forecast incorporates several key economic factors including a strong stock market, continued job growth, and stable rules for international trade to forecast these record-setting sales for breakthrough tech- nologies and longtime market leaders alike. And the driving themes of 2018, including voice computing, artificial intelligence and connectivity that make our lives better and more efficient, were on display across the show floor at CES 2018." CTA is the nation's largest tech trade association — its semi- annual report serves as a benchmark for the U.S. consumer technology industry, charting the size and growth of underlying product categories. The CTA consensus forecast reflects U.S. factory sales-to-dealers for more than 300 consumer tech products. EMERGING TECHNOLOGIES EXPAND Overall, U.S. sales of connected devices are projected to reach 715 million units in 2018 — a 6.6 percent increase year- over-year. Specific products projected 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 going gangbusters. Unit sales increased 279 percent in 2017, and CTA projects 2018 unit sales will reach 43.6 million units (60 percent increase) and earn $ 3.8 billion in revenue (93 percent growth). As voice recognition technology is integrated into more speakers at a variety of price points, smart speakers is a category to watch in 2018. • Smart Home: The popularity of smart speakers will have a ripple effect on the smart home market, as consumers discover the benefits of voice-activated home automation. CTA expects sales in the category — including smart thermostats, smart smoke and carbon monoxide detectors, IP/Wi-Fi cameras, smart locks and doorbells, smart home systems, and smart switches, dimmers, and outlets — to reach 2018 TECH INDUSTRY REVENUE TO REACH RECORD $351 BILLION CTA annual report now includes streaming services, projected to contribute $19.5 billion in revenue

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