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The U.S. consumer technology industry is projected to generate over $505 billion in retail sales revenue for the first time ever according to the Consumer Technology Association. The projection represents a 2.8% revenue increase from 2021’s 9.6% growth over 2020. Strong demand for smartphones, automotive tech, health devices and streaming services will help propel much of the projected revenue.
“The consumer technology industry has shown impressive resilience in the face of supply chain challenges that are affecting almost every sector of the economy,” said Gary Shapiro, president and CEO, CTA. “The pandemic gave people more time to explore new tech that made their lives healthier, safer and more convenient. We anticipate another year of growth for our industry based on the enormous demand we see from consumers for tech products and services.”
Smartphone shipments are projected to reach 154.1 million units ($74.7 billion in shipment revenues) in 2022, marking 3% growth from 2021 (149.6 million). The upward trend is driven by the increasing availability of 5G, as 5G handsets will make up 73% of smartphone shipments ($61.37 billion in revenues) in the coming year. The introduction of foldable phones represents a new option for consumers that will help drive demand.
Automotive technology sales are expected to rebound in 2022 as we begin to see early signs of recovery in chip supplies. Factory-installed automotive tech is projected to reach $16 billion in shipment revenues this year, an impressive 7% increase from 2021 ($14.9 billion). Demand for automotive tech is increasing as auto manufacturers produce more and continue to develop advanced driver assistance systems that make vehicles more efficient and safer.
U.S. households continue to purchase more content through online delivery platforms. Total spending on streaming services and software is expected to reach $130 billion in 2022, up 6% over 2021. An ever-expanding universe of video streaming services, each with their own exclusive TV shows and movies, is drawing a growing audience. Spending on video streaming services is expected to reach $47 billion in 2022, up 7% over 2021.
Streaming services that offer music, audio books and podcasts will see consumers spend $12.9 billion in 2022, up 15% over last year while consumer spending on gaming software, including downloads, game streaming services and in-game purchases, will rise 5% to $53.6 billion this year.
With consumers spending more time at home and major advancements in gaming systems in recent years, the video game industry is poised to have yet another year of revenue growth. Shipment revenues for home gaming consoles rose dramatically from nearly $4.4 billion in 2020 to nearly $6.1 billion in 2021, an impressive 40% growth year-over-year driven largely by demand for next-generation consoles and more time spent at home amid the pandemic. CTA projects relatively modest gains in 2022, with home gaming consoles reaching nearly $6.5 billion, a 6% increase from 2021. Growing interest in the metaverse will contribute to a spike in demand for virtual reality eyewear, with shipment revenues rising from $774 million to nearly $1.3 billion, a 66% increase.
Personal EVs such as electric bikes and scooters are also on the rise as consumers seek alternatives to driving their car or taking public transportation for short trips and last-mile transportation. Electric bike shipments are expected to reach almost 3 million units and $6 billion in revenues in 2022.
Wireless headphones and smartwatches both top the list of wearable technologies keeping consumers connected, productive and entertained. Smartwatches are projected to generate $7.1 billion in shipment revenues this year, an 8% increase over 2021. True wireless earbuds are expected to rise 3% from 2021 to 2022, reaching a projected $9.3 billion in shipment revenues this year.
Connected exercise equipment grew significantly through the pandemic, generating nearly $3.8 billion in shipment revenues in 2021. In 2022, CTA projects connected exercise equipment will experience 17% growth and reach nearly $4.5 billion in shipment revenue. This growth trajectory suggests that health-conscious consumers are finding practicality and convenience in exercising at home, even as gyms and workout classes reopen.
“The record-breaking revenue generated by the technology industry reflects the reality that every sector of our economy is leveraging technology to enhance their products and services,” said Rick Kowalski, director, industry analysis and business intelligence, CTA. “Just look around the show floor at CES 2022, you see agriculture, health care, entertainment and beyond. It is a snapshot of how all-encompassing the technology industry has become.”CTA employs a consensus methodology to compile its forecasts, gathering estimates of expected annual total industry volumes from manufacturers, retailers, industry analysts, publications and other sources. These estimates are then averaged and adjusted based on additional qualitative inputs, year-to-date trends, CTA consumer research and historical growth rates. Multi-year projections cannot account for unpredictable factors such as pandemics or changes in trade laws, interest rates and federal policy. CES 2022 officially opens Wednesday January 5th.