Despite declines, revenue to remain above 2019 totals throughout the forecast period
Port Washington, N.Y., January 5, 2023 – Following tremendous growth fueled by pandemic needs in 2020 and 2021, U.S. consumer technology industry sales revenue is expected to end 2022 down 8% year over year, according to The NPD Group. The latest Future of Technology forecast reports sales will decline by an additional 5% year over year in 2023 and remain flat in 2024.Tech sales are expected to return to growth in 2025, rising by 2%, as consumers once again begin to replace devices purchased during the pandemic.
“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,” said Paul Gagnon, vice president and technology industry advisor for NPD. “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.”
NPD anticipates unit sales of TVs and home automation devices will remain positive throughout the forecast period. TV unit sales are expected to grow by low single-digits, year over year through 2025, as prices become more affordable at all sizes and the shift to larger sizes accelerates. Home automation product sales, which grew in 2022 even after strong demand during the pandemic, will continue to grow, with new models coming to market and with the expansion of products using the new Matter smart home standard.
“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,” said Ben Arnold, executive director and consumer technology industry analyst for NPD. “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.”
Future of Technology forecasts and insights are based on forecasted sales of technology products captured in The NPD Group’s Retail Tracking Service point-of-sale data.