Retail Observer

OCTOBER 2017 RETAILOBSERVER.COM 61 CTA projects sales in the category - including smart thermostats, smart smoke and carbon monoxide detectors, IP/Wi-Fi cameras, smart locks and doorbells, smart home systems, and smart switches, dimmers and outlets - to reach 27 million units in 2017 (50% increase over 2016), earning $ 3.3 billion (48% increase). • 4K Ultra High-Definition (4K UHD): 4K UHD TVs are one of the industry's fastest growing segments, far outpacing the transition to HDTV, with unit sales forecast to hit 16.7 million units (59% increase) generating $14.6 billion in revenue (45% increase). • Digital Assistant Devices: Voice recognition technology is one of the defining trends of 2017 and these devices continue to gain popularity. 2017 unit sales projections for voice- controlled digital assistant devices - including Amazon's Echo, Google Home and expected new market entrants like the Apple HomePod - are projected to reach 11 million units (53% increase) and generate $1.3 billion in revenue (22% increase). • Virtual Reality (VR): Led by continued interest in mobile headsets and entertainment content, shipments of VR headsets are projected to grow to 5.3 million units (79% increase) and $1.3 billion in revenues (43% increase). • Drones: Total drone sales are expected to reach 3.4 million units (40% increase) and $1.1 billion in revenue (44% increase) for the first time in 2017. CTA's forecast delineates U.S. drone sales for units below and above 250 grams, the FAA's division for mandatory drone registration: Shipments of drones below 250 grams are expected to reach just over 2 million units, while drones above 250 grams will surpass 1.3 million units shipped. "More and more consumers are adopting connected products at a rapid pace, with several categories such as drones, VR, and OLED TVs surpassing significant revenue milestones just a few years since their market entry," said Steve Koenig, senior director of market research, CTA. "At the same time, core categories, such as smartphones and laptops, continue to experience unit and revenue growth, demonstrating resilience in mature technologies. We believe the anytime/anywhere access to information and each other that connectivity enables is a driving trend of our time." MATURING TECHNOLOGY DEFY EXPECTATIONS The top five revenue categories continue to contribute just over half of total industry revenue (53%) in 2017. Despite some slight revenue declines, unit shipment increases demonstrate continued resilience in these categories. • Smartphones: Continuing to defy expectations, despite widespread adoption, unit volume will grow 3% to reach 185 million smartphones shipping in 2017, with revenues expected to reach $ 55.6 billion (3% increase). • Televisions: In 2016, LCD television enjoyed record unit shipments but 2017 will initiate a period of slight declines with unit volume at 40 million units (1% decrease) and $18 billion in revenue (1% decrease). Future category growth will be driven by 4K UHD, high dynamic range, and OLED display technology. • Tablets: With the tremendous consumer uptake of tablets over the past few years, adoption has leveled off and replacement cycles have slowed. Tablet sales will decline in 2017, as CTA expects sales of 59 million units (5% decrease) and revenues of $16 billion (8% decrease). • Laptops: In 2017, the laptop market, including commercial and consumer channels, will sell 48 million units, up 2% over last year, and earn $28 billion in revenue (1% decrease). Convertible models represent an area of growth. • Automotive Technology: Joining the top five largest revenue hardware categories for the first time, factory-installed automotive technology, from driver-assist features to entertainment systems, is projected to contribute $15 billion (12% increase) in revenue to the industry as a result of overall automotive sales performing well, a rising tide of tech integrated into all vehicles and the increasing density of tech installed in each vehicle. CTA publishes the U.S. Consumer Technology Sales and Forecasts twice a year, in January and July, reporting U.S. factory sales-to-dealers. It was designed and formulated by CTA, the most comprehensive source of sales data, forecasts, consumer research and historical trends for the consumer technology industry. Multi-year projections cannot account for unpredictable factors such as changes in trade laws, interest rates and federal policy. Visit www.CTA.tech/salesandforecasts for more information. RO

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