Over the next three years NPD is forecasting strong growth for the consumer electronics industry. Through 2021, we are expecting to see a 3 percent revenue increase, which is notable for a mature market where consumers are not replacing or repurchasing tech items at the same rate they did in prior years.
Some of the categories leading growth more immediately (in the back half of 2019) include, smart entry products (such as Video Doorbells or Smart Locks), true wireless headphones, gaming PCs, Chromebooks, and 75-inch-and-larger TVs. But these near-term opportunities could also include some surprising segments filling consumer needs, like charging cables, tablets and tablet accessories, and even a return of the digital picture frame.
Source: The NPD Group, Inc., Future of Tech Report 2019
Key trends to watch:
Big segments continue to dominate
- Core growth areas, including wireless headphones, smart home products, smart speakers, smartwatches, and gaming accessories and hardware (e.g., desktop and notebook PCs and monitors), are expected to triple in revenue from 2016 to 2021, while tech’s top three categories, notebooks (not including gaming), TVs, and tablets, will grow approximately 5 percent. That said, the revenue total for the top three sellers is $10B more than core growth areas — so the success of these big segments is especially critical to the industry.
Niches can drive growth in the biggest and the smallest categories
- In a mature market, unit growth is unlikely, since there aren’t a lot of new customers to sell to. The biggest opportunity is to find underserved niches.
New tech starts to impact growth in 2021
- New and emerging technologies we are starting to see in limited availability today will begin to have an impact by the end of 2021. Products like next-generation foldable screens, 5g, AR and others will have an impact in the not-so-distant future.
Post-2021, the technology industry will undergo radical change
- What trends drive the inflection points?
- The screen: Whether foldable or transparent screens will be everywhere
- The intelligent assistant: Software that knows me and can help me with everyday tasks will drive tech purchases
- Do-it-for-me devices: Products that are intelligent and can do things for me will interest consumers.
- The connection: Inside the home, everything will be connected.
- Connectivity: Connectivity to devices, to the cloud, and to the edge will be key.