What will drive consumer tech sales in 2021?

Discussion
Source: CES 2020 show floor scenes
Jan 11, 2021
Tom Ryan

Propelled by pandemic needs, consumer tech sales in the U.S. saw their strongest growth in 2020 in at least seven years, according to NPD Group’s “Future of Tech” forecast. This week around 2,000 vendors are attending the first-ever virtual CES show to drive that growth further.

According to NPD’s survey, sales in the U.S. consumer technology industry jumped 17 percent through Dec. 26. Sales are expected to climb 12 percent in the first quarter.

Overall sales, however, are expected to decline two percent in 2021 as the outsized 2020 comparisons are anniversaried. NPD also predicts a decline of two percent in 2022, followed by flat sales in 2023.

Stephen Baker, VP, industry advisor at NPD, in a statement stressed that, despite year-over-year declines in 2021, the results will still represent double-digit growth versus pre-pandemic levels.

“The pandemic has renewed recognition of the critical value of technology to consumers, so while sales comparisons may stagnate, demand on an overall basis for consumer electronics will be higher for the next two years than it would have been without the events of 2020,” said Mr. Baker.

NPD expects smart home and PC gaming related products to grow 9 percent and three percent respectively in 2021. Both categories were seen having long-term growth potential pre-pandemic.

By 2023, the top five segments based on revenue (notebooks, tablets, headphones, TVs and smartwatches) are predicted to expand to over 55 percent of all tech sales from 44 percent in 2017.

“In the latter half of 2021, we expect to see a renewed focus on mobility: charging solutions for phones, thin and light PCs, and the build out of 5G, as consumers begin to return to a more ‘normal’ life,” said Mr. Baker. “We also expect previously less important trends, like improved in-home connectivity, home based work and education, the growing number of screens to enable content consumption, and connected video capabilities in the home, to take hold more permanently as a result of the pandemic.”

This week’s CES event will showcase a number of high-tech masks, smart air purifiers and UV-C-germ killing devices as well as items to support at-home work and entertainment needs due to the pandemic.

DISCUSSION QUESTIONS: How do you see the pandemic influencing consumer electronics trends this year and in the years ahead? What tech innovations are you most excited about seeing?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"The most successful innovations will be those that facilitate connectivity in a seamless manner across platforms."
"Demand for portable, low-profile and easy-to-use devices that provide connectivity and value will continue to soar."
"Significant growth will continue for in-home tech to support virtual classrooms, meeting rooms and board rooms."

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11 Comments on "What will drive consumer tech sales in 2021?"


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Richard Hernandez
BrainTrust

I see more innovation in home automation and connectivity with your mobile device. It has been coming for a few years now, but I believe the pandemic has accelerated the innovation.

Dave Bruno
BrainTrust

I think it’s fair to expect 5G to become a major driver of mobile upgrades in the second half of the year, assuming there are applications that drive the demand. Thus far, I have not seen much in the way of compelling applications that will drive large numbers of consumers to drop another several hundred dollars on a new phone just to access the 5G network. At home, I think mesh Wi-Fi still has a lot of room for growth, particularly as lockdowns stretch through the next several months while we wait for vaccine rollouts. If price points continue to come down as demand and competition increase, I do suspect we will likely see a large wave of Wi-Fi upgrade, possibly early in the year while we are still in winter’s grip.

Camille P. Schuster, PhD.
BrainTrust

The demand for more connectivity in homes will continue to drive demand for computers and tablets. The demand for entertainment at home will continue to drive demand for game systems and games. However this demand is more related to circumstances than a demand for new features. One way to increase sales might be to offer models with the same or fewer features at lower prices when offering new models with more features at higher prices.

Jeff Weidauer
BrainTrust

The most successful innovations will be those that facilitate connectivity in a seamless manner across platforms. 2020 had everyone buying cameras and upgrading Wi-Fi – next will be bringing all the pieces together to work more effectively.

Ryan Mathews
BrainTrust

After every peak there is a valley. Last year many consumers stocked up on the kinds of technology they needed if they were lucky enough to be able to work from home. At the same time, sitting around the house all day many shoppers invested in DIY home improvement projects including upgrading their “domestic technologies.” But, you don’t buy a new laptop or install a new smart home system every year, so customers that fueled the market may not buy much other than printer cartridges for the next year. I think you’ll seem more voice-activated technologies this year and more system integration and technology management devices sold this year as people try to streamline and improve what they bought last year.

Perry Kramer
BrainTrust

Significant growth will continue for in-home tech to support virtual classrooms, meeting rooms and board rooms. The world jumped into work and educate from home with little time for innovation. As we stabilize and start year two there will be significant innovation in VR, security, software, and networking to transform our experience and productivity in these areas. I agree the staples such as laptops, monitors and PC will see an annualized downturn as last year’s purchases work through their three to five year life cycles.

Jane Sarasohn-Kahn
Guest

COVID-19 certainly accelerated the trend of consumers evolving their homes as their health hubs for self-care, food-as-medicine, sleep-health, oral health care, and home connected gyms. #CES2021 this week will demonstrate the growth of digital health tech through many innovations, from clean air tech to wearables, IoT, and medical devices shifting care from hospitals to homes.

Cynthia Holcomb
BrainTrust

“Consumer” tech in this article speaks to consumer hardware. Hardware only provides as much value to the consumer as the software running the hardware. Retail tech is stuck in hardware, which seems to be so much easier for non-tech savvy retail leaders to invest in and embrace. Leaving real consumer technology innovation safely stuck in the 2010s. Forget about leveraging AI and Ml in the 2020s. After all, how does a pilot fly a plane without taking flying lessons?

Doug Garnett
BrainTrust

I expect that 2021 will continue to see good levels of sales — especially if optimism returns with the vaccination programs.

On the other hand, we are in a tremendously dull time for tech. Most everything we know we need is easily available and relatively inexpensive. TVs, headsets, computers, tablets, phones, and all the surrounding systems and gadgetry? Done.

So while 2021 may be good, I expect it’s several years before a “next big thing” comes on the market to re-energize tech sales.

Patricia Vekich Waldron
Staff

Demand for portable, low-profile and easy-to-use devices that provide connectivity and value will continue to soar.

Harley Feldman
BrainTrust

With many people working working remotely, more digital devices will be purchased to make the digital connection more satisfying. This will drive up the demand for laptops, screens, smart TVs and smartphones. Then these devices need to be connected to networks for carrying the digital data to make the digital connection better. Increased bandwidth is needed to support many applications used such as Zoom, Youtube, Google Meets, Microsoft Teams, etc. 5G demand will go up if the users are not typically at home or at an office where usually Wi-Fi is available. Since 5G is more expensive, its demand will grow slower than the hype shown in TV commercials. Having said that, 5G smartphones will grow due to other features such better screens and performance with the ability to have 5G capability an important issue for the consumer when they are ready to turn it on.

wpDiscuz
Braintrust
"The most successful innovations will be those that facilitate connectivity in a seamless manner across platforms."
"Demand for portable, low-profile and easy-to-use devices that provide connectivity and value will continue to soar."
"Significant growth will continue for in-home tech to support virtual classrooms, meeting rooms and board rooms."

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