NPD forecasts revenue declines to follow in 2022, 2023
Port Washington, NY, August 10, 2021 – As a result of strong first half sales and rising average sales prices (ASPs), U.S. consumer technology revenue in 2021 is expected to surpass 2020 totals by 7% while unit sales for the year will see a 1% decline, according to The NPD Group. NPD’s latest Future of Tech report estimates sales for 2021 will reach over $113 billion, a 4% increase from January estimates. In 2022 and 2023 NPD expects revenue to be down year over year 7% and 4% respectively, and unit sales will see a 6% and 5% decline.
“The higher than expected ASPs we are seeing in the market today can be attributed to increased shipping costs, component shortages, consumer readiness to trade-up to a higher cost product to meet their needs, and lack of promotional activity. All of these factors have driven our total revenue projections up, but higher ASPs inevitably lead to lower demand, resulting in unit sales declines in categories such as TVs, networking devices, and printers in the back half of the year,” said Stephen Baker, vice president and industry advisor for NPD. “Following the historically high sales in 2020 and 2021, we are anticipating near-term declines with a slow climb back to normalcy by the end of 2023.”
Quarterly U.S. Consumer Electronics Market Growth and Forecast for 2021
The current quarter, Q3 2021, is forecasted to be the most challenging revenue quarter for the CE business since the pandemic began due to difficult comps to Q3 2020. But NPD’s forecast predicts a temporary return to revenue growth in Q4 2021, up 2% year over year, despite a 5% decline in unit sales, again driven by pricing and product availability. This is noteworthy revenue growth given the strong CE sales recorded in Q4 2020.
“Revenue growth in Q4 will be driven by higher prices in the industry’s most popular holiday categories like big screen TVs, PCs, gaming, and audio. As consumers trade-up to better, more feature laden technology products, they will also have to contend with fewer and shallower promotions,” said Ben Arnold, executive director and technology industry analyst for NPD.
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Future of Tech Report is based on forecasted sales of technology products captured in The NPD Group Retail Tracking Service point-of-sale data. This does not include mobile phones.