The Consumer Technology Association (CTA) predicts that connectivity, particularly via mobile networks, will fuel industry growth, with total U.S. retail sales hitting $351 billion in 2018, up 3.9% from last year. .
Traditional consumer hardware categories are flat or declining, while connected devices and services are booming – for example “smart speakers”, which are tied to artificially intelligent, voice recognition services such as Amazon’s Alexa, are predicted to hit $3.8 billion in 2018, a 93% increase.
This forecast was released yesterday at CES, which used to be the Consumer Electronics Show and which is produced by CTA, which used to be the Consumer Electronics Association. Increasingly, the industry is defined by software, content and networks, and not by gadgets and gizmos. Hence the rebranding from electronics to technology. That shift is also showing up in revenue figures.
The $351 billion predicted U.S. industry total includes $20 billion in music and video streaming services, a 35% jump from 2017. If you back out that revenue, the predicted growth in retail revenue in 2018 will only be 2.5%. Hardware growth is probably even lower. Only a few, top line category forecasts were released, and some – arguably all – are a mix of digital bits and physical products.
All eleven of the categories that were broken out rely on broadband connections. Without connectivity, speakers and homes aren’t smart and virtual reality is virtually nothing. So it’s no surprise that CTA analysts spent more time talking about 5G mobile networks than televisions, or even smartphones.
“We’re in the connected era”, said Steve Koenig, senior director of research for CTA. “We understand the importance of connectivity, not just to to the industry but to the global economy”.
Many of the really cool things to come that Koenig talked about will depend on the fast, low latency bandwidth that 5G networks will deliver in urban areas. Without it, the promise of technologies like self driving cars, augmented reality or robotics won’t be fully realised. But it’s important to remember that residential wireline networks will continue to do the unglamorous heavy lifting in a connected, consumer technology-enabled world.
Koenig predicts that five years from now, nearly 800 million “consumer tech connected devices” will be sold annually in the U.S. For that to happen, we need modern networks. Of every kind.