According to The NPD Group, 2019 marked the third consecutive year of growth for the U.S. consumer technology industry with sales up 3% over the previous year. The positive trend is expected to continue, with revenue growth in the next three years expected to exceed 2019's performance as anticipation builds for upcoming technologies and the consumer need for today's technology products continues to produce strong sales results.
NPD's forecast is for 5% revenue growth in the United States this year, followed by 4% in 2021 and 3% in 2022. In 2020, top revenue growth categories are expected to include wireless headphones (+51%), Chromebooks (+22%), 65-inch and above TV sets (+19%), smart watches (+18%), and smart home devices (+16%).
"While the industry is poised to pivot towards market changing new technologies, it is worth noting that consumers will continue to shop what is available today in consumer electronics," said Stephen Baker, vice president, industry advisor, for NPD. "Great prices on current technology, much of which is still in the midst of upgrade cycles and product improvements, will continue to spur sales in the industry."
While recently released NPD data indicated that U.S. holiday sales for key general merchandise categories were virtually flat, consumer technology was the top performer with sales up nearly 5%. The shorter 2019 holiday season drove consumers to buy early and often in consumer tech, resulting in 9% revenue growth during Thanksgiving week and 14% revenue growth over the week of Cyber Monday. However, Christmas week saw the largest year over year gains, up 21% vs. 2018. TV sets and PCs were the top revenue categories within consumer tech this holiday season, with headphones surpassing tablets for the No. 3 position for the first time. Headphone dollar sales ended the holiday up 52% year over year.
"Over the holiday, big screen TVs, premium products, and promotional pricing drove the tech industry to growth, as consumers took advantage of sales to purchase the best and biggest products that they could afford," said Baker. "This is a positive indicator as we head into 2020 and beyond, as consumers are choosing to purchase at a time when a lot of innovation is looming - 5G, foldable screens, OLED, AI - not necessarily waiting for those technologies, nor expecting today's product to be discounted."