January 8, 2026
Photo courtesy of the Consumer Technology Association (CTA)®
Will AI Devices Drive a Consumer Electronics Recovery In 2026?
Forecasts are calling for only a modest recovery, at best, in consumer electronics sales in the U.S. in 2026. Buzz created by AI-powered gadgets is offset by the impact of tariffs and budget-conscious consumers.
The subdued forecasts arrive as the 2026 CES Show, taking place in Las Vegas this week, is being flooded by AI-reimagined devices — from TVs, PCs, and smartphones to companion robots and pets, smart glasses, vacuums and toilet bowls.
“Despite easing inflation and resilient demand in many regions, risks from tariffs and supply chain disruptions persist,” said Steve Koenig, VP of research for the Consumer Technology Association (CTA), which produces the CES Show, in a press release. That press release also featured an outlook in partnership with from NielsenIQ.
He added, “Consumers remain value-driven but are prepared to spend where they see compelling product features. Built-in artificial intelligence continues to present strong opportunity as a product differentiator, but adoption will depend on clear use cases that illustrate direct benefits and ROI.”
Nielsen Suggests Flattish Electronics Sales in North America This Year
NielsenIQ’s forecast predicted global sales in the broader Consumer Tech & Durable Goods (T&D) market will decline 0.4% in 2026, after climbing 3% to $1.3 trillion in 2025. The projected decline this year is due to weakness in China, with most regions expected to remain stable or see modest gains, including flattish growth in North America.
“Value-for-money remains a top priority, meaning that product benefits must be both highly relevant and visible to shoppers,” said NielsenIQ. “Replacement cycles for PCs and smartphones, combined with premiumization trends—AI-native PCs, mini-LED/OLED TVs, built-in appliances, and smart home appliances—will help drive demand. TVs get a boost from the 2026 World Cup, while open-ear headsets sustain momentum, and AI-enabled features with clear use cases offer premiumization potential.”
Circana predicts consumer technology sales in the U.S. will inch up 0.2% in 2026 to $112 billion. The research firm projected U.S. consumer tech sales in 2025 fell 2.2% — missing its initial forecast calling for a 1.6% gain — due to a pullback in spending by lower- and middle-income buyers amid ongoing inflationary pressures.
Average prices for consumer electronics are expected to climb about 3% in 2026, matching the pace of growth in 2025. The increase, in part, reflected the continued shift in product mix toward more expensive products like PCs, but also higher costs of memory used in many consumer electronics.
Computers are expected to continue to be the strongest sellers in 2026 as consumers continue with a replacement cycle refresh, and the end of Windows 10 support spurs some additional replacement of older PCs. Smart glasses are among the innovative categories expected to grow.
“Consumers remain focused on value in 2026 just as in 2025, fueled by economic uncertainty and some rising product costs,” said Paul Gagnon, VP and technology industry advisor for Circana. “Innovative products and a need to replace aging devices will help to offset more pragmatic spending tendencies.”
The CTA Suggests Electronics Sales, Conversely, Will Grow — Largely Based on Price Hikes
CTA’s U.S. Consumer Technology Industry Forecast calls for U.S. consumer electronics sales to rise 3.7% to $565 billion in 2026 with a boost from higher prices. Unit shipments are forecast to grow just 0.7%.
CTA cites three major forces shaping the next phase of consumer tech:
- Intelligent Transformation: AI becoming foundational across devices, platforms, and services, enabling smarter systems and more personalized consumer experiences.
- Longevity Technologies: Advances in digital health, remote care, and wellness tech supporting longer, healthier lives.
- Engineering Tomorrow: Continued investment in electrification, mobility, energy management, and infrastructure modernization.
CTA sees consumers prioritizing software-driven value, anchored around subscriptions and flexible financing options, as they face economic constraints.
“Even as tariffs and broader economic pressures intensify, Americans continue to invest in technology that improves productivity, connectivity, and quality of life,” said Gary Shapiro, executive chair and CEO. “But the impact of economic uncertainty is becoming more visible as companies move through pre-tariff inventories and face tougher cost decisions heading into 2026.”
BrainTrust
Bhargav Trivedi
Doug Garnett
President, Protonik
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Recent Discussions
Discussion Questions
Do you see more headwinds than tailwinds facing the consumer electronics category in 2026?
Do you see smart glasses, robots and any other AI-infused gadgets breaking out this year as a sales driver for the consumer electronics category?
Poll
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The answer is a clear “no.” Advertising we’re seeing around AI makes it clear it’s like Internet of Things — useful in certain highly specialized applications but unable to be mass market generalized. Of course, CLAIMS of AI may be added to almost every device — but consumers are not so dumb as to be sucked in by those claims.
AI is everywhere and it’s in everything and it’s all retail media is talking about. I have AI information overload. I agree with Doug: consumers aren’t that dumb.
I see more headwinds than tailwinds in 2026, but not because innovation is lacking. The pressure comes from economics, not imagination. Rising component costs and cautious replacement cycles mean most growth will be price-led rather than unit-led, which aligns with forecasts. Consumers are still buying, but they are buying more deliberately and expecting clearer value in return.
AI-infused devices are not automatically a tailwind on their own. Smart glasses, companion robots, and AI-native PCs can grow as categories, but they will not become true sales drivers unless they solve everyday problems in visible ways. We have seen this movie before with smart home devices. Novelty creates buzz at events like CES, but sustained demand only comes when setup is simple, use cases are obvious, and the experience improves over time.
Where AI really matters is not the gadget, but the experience layer. Personalized onboarding, adaptive performance, intelligent recommendations, and software-driven upgrades will determine whether consumers feel they are getting ongoing value for a premium price. Hardware differentiation alone is no longer enough. In 2026, the winners will be consumer electronics brands that treat AI as a service and relationship engine, not just a feature checklist.
Agree: the level of (dis)satisfaction with the experience is key. (Gamers & content creators likely being exceptions)
Re: “cautious replacement cycles”
2025 was already a year of forced-obsolescence. Hardware: computers + devices such as printers that need to sync. That might sound like a “company” expense, but consider the # of people still WFH.
Windows 11 operating system now being fully supported (and the stoppage for Win 10).
On the Apple/Mac side, the support stoppage of certain iOS levels is Apple’s ongoing game to force upgrades.
There are multiple headwinds for consumer electronics. Foremost among them are constrained consumers and purchase cycle that remains muted. AI is modestly helpful, but it is not a savior. The fact is that a lot of AI-enabled devices don’t really do much that consumers without AI-enabled devices can do: you don’t need a special computer to use ChatGPT! Moreover, some of the AI functions are nice-to-have rather than must-have so, again, this does not drive urgency in purchasing.
When it comes to consumers, what is AI really offering that they don’t have now? While AI is a majorly important tool being developed for business and the economy, in the near future, the consumer will find it hard to justify the additional cost it requires.
I see more headwinds than tailwinds facing the consumer electronics category in 2026 — at least in terms of broad, category-wide sales growth — largely because of lingering macroeconomic and policy uncertainties that directly affect prices and discretionary spend. The forthcoming Supreme Court decision on U.S. tariff policy could be the single most consequential factor for the industry this year: if tariffs remain at elevated levels, consumer electronics prices will stay artificially inflated, eroding demand and consumer willingness to invest in big-ticket or discretionary gadgets. Conversely, a favorable ruling that rolls back or limits tariff reach could relieve pricing pressure, improve margins for both retailers and manufacturers, and give consumers more confidence to buy outside of purely essential categories. Until we have clarity on that front, both cost and sentiment are likely to act as headwinds.
When it comes to AI-infused hardware — whether smart glasses, robots, or other next-gen devices — I’m skeptical as a former consumer electronics merchant that we’ll see a breakout hardware category in 2026 that materially moves the needle for overall consumer electronics sales. Yes, there will be innovation and niche adoption — especially in products that solve genuine use-case problems — but widespread consumer buy-in for new durable gadgets typically requires clear utility, affordable pricing, and minimal friction. Right now, most AI-related spending by households is directed toward software and services — subscription tiers, cloud-based enhancements, and in-app experiences — rather than new hardware purchases. This mirrors buying behavior in previous tech inflection cycles, where the software layer creates immediate, tangible value while the hardware ecosystem catches up over a longer adoption curve.
That’s not to say we won’t see compelling products in 2026, but rather that software will lead the AI spending story, with durable hardware serving as an incremental complement rather than the primary growth driver. In a high-tariff, high-price, and cautious consumer environment, discretionary hardware purchases will likely remain constrained unless broader economic and policy conditions align more favorably. The category’s performance this year will ultimately reflect not just innovation in devices, but how policy, pricing, and consumer confidence converge in a market still sensitive to cost pressures and shifting priorities.
Will AI devices drive consumer electronic spending in 2026, no, likely not. But it is something to be watched going forward. Several people I’ve bumped into lately are carrying AI devices to record and transcribe meetings. And these aren’t “tech forward” people – just business leaders who want to be efficient. And as far as AI overload, I guess it all depends on your perspective. I’m in the “bring it on” camp!
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The answer is a clear “no.” Advertising we’re seeing around AI makes it clear it’s like Internet of Things — useful in certain highly specialized applications but unable to be mass market generalized. Of course, CLAIMS of AI may be added to almost every device — but consumers are not so dumb as to be sucked in by those claims.
AI is everywhere and it’s in everything and it’s all retail media is talking about. I have AI information overload. I agree with Doug: consumers aren’t that dumb.
I see more headwinds than tailwinds in 2026, but not because innovation is lacking. The pressure comes from economics, not imagination. Rising component costs and cautious replacement cycles mean most growth will be price-led rather than unit-led, which aligns with forecasts. Consumers are still buying, but they are buying more deliberately and expecting clearer value in return.
AI-infused devices are not automatically a tailwind on their own. Smart glasses, companion robots, and AI-native PCs can grow as categories, but they will not become true sales drivers unless they solve everyday problems in visible ways. We have seen this movie before with smart home devices. Novelty creates buzz at events like CES, but sustained demand only comes when setup is simple, use cases are obvious, and the experience improves over time.
Where AI really matters is not the gadget, but the experience layer. Personalized onboarding, adaptive performance, intelligent recommendations, and software-driven upgrades will determine whether consumers feel they are getting ongoing value for a premium price. Hardware differentiation alone is no longer enough. In 2026, the winners will be consumer electronics brands that treat AI as a service and relationship engine, not just a feature checklist.
Agree: the level of (dis)satisfaction with the experience is key. (Gamers & content creators likely being exceptions)
Re: “cautious replacement cycles”
2025 was already a year of forced-obsolescence. Hardware: computers + devices such as printers that need to sync. That might sound like a “company” expense, but consider the # of people still WFH.
Windows 11 operating system now being fully supported (and the stoppage for Win 10).
On the Apple/Mac side, the support stoppage of certain iOS levels is Apple’s ongoing game to force upgrades.
There are multiple headwinds for consumer electronics. Foremost among them are constrained consumers and purchase cycle that remains muted. AI is modestly helpful, but it is not a savior. The fact is that a lot of AI-enabled devices don’t really do much that consumers without AI-enabled devices can do: you don’t need a special computer to use ChatGPT! Moreover, some of the AI functions are nice-to-have rather than must-have so, again, this does not drive urgency in purchasing.
When it comes to consumers, what is AI really offering that they don’t have now? While AI is a majorly important tool being developed for business and the economy, in the near future, the consumer will find it hard to justify the additional cost it requires.
I see more headwinds than tailwinds facing the consumer electronics category in 2026 — at least in terms of broad, category-wide sales growth — largely because of lingering macroeconomic and policy uncertainties that directly affect prices and discretionary spend. The forthcoming Supreme Court decision on U.S. tariff policy could be the single most consequential factor for the industry this year: if tariffs remain at elevated levels, consumer electronics prices will stay artificially inflated, eroding demand and consumer willingness to invest in big-ticket or discretionary gadgets. Conversely, a favorable ruling that rolls back or limits tariff reach could relieve pricing pressure, improve margins for both retailers and manufacturers, and give consumers more confidence to buy outside of purely essential categories. Until we have clarity on that front, both cost and sentiment are likely to act as headwinds.
When it comes to AI-infused hardware — whether smart glasses, robots, or other next-gen devices — I’m skeptical as a former consumer electronics merchant that we’ll see a breakout hardware category in 2026 that materially moves the needle for overall consumer electronics sales. Yes, there will be innovation and niche adoption — especially in products that solve genuine use-case problems — but widespread consumer buy-in for new durable gadgets typically requires clear utility, affordable pricing, and minimal friction. Right now, most AI-related spending by households is directed toward software and services — subscription tiers, cloud-based enhancements, and in-app experiences — rather than new hardware purchases. This mirrors buying behavior in previous tech inflection cycles, where the software layer creates immediate, tangible value while the hardware ecosystem catches up over a longer adoption curve.
That’s not to say we won’t see compelling products in 2026, but rather that software will lead the AI spending story, with durable hardware serving as an incremental complement rather than the primary growth driver. In a high-tariff, high-price, and cautious consumer environment, discretionary hardware purchases will likely remain constrained unless broader economic and policy conditions align more favorably. The category’s performance this year will ultimately reflect not just innovation in devices, but how policy, pricing, and consumer confidence converge in a market still sensitive to cost pressures and shifting priorities.
Will AI devices drive consumer electronic spending in 2026, no, likely not. But it is something to be watched going forward. Several people I’ve bumped into lately are carrying AI devices to record and transcribe meetings. And these aren’t “tech forward” people – just business leaders who want to be efficient. And as far as AI overload, I guess it all depends on your perspective. I’m in the “bring it on” camp!