Consumer spending on technology during 2021 will outstrip 2020 by almost $40 billion, due largely to the pandemic, according to an annual survey from the Consumer Technology Association.
Retail spending on technology will hit $461 billion during 2021, up from an estimated $422 billion for 2020.
The sale of digital health products will grow much faster than they would otherwise, as will sales of gaming products, streaming media services and products that support remote working, but the rest of the hot-product list for 2021 has many of the same categories that were hot in 2020.
Demand for technology products during the first few months of 2021 is likely to look a lot like it did during the last few months of 2020, according to Rick Kowalski, director of industry analysis and business intelligence at the CTA.
Speaking to members of the press Jan. 11 at CES, the Consumer Technology Association's annual technology and media trade show, CTA President and CEO Gary Shapiro said the pandemic "has pushed the fast-forward button on tech adoption," making laptop computers and other work-from-home tools a surprise hit and increasing the pace of growth in other areas.
For example, the report predicts sales of software and streaming media will rise to $112 billion during 2021, an increase of 11% compared to 2020. Sales of game consoles are projected to rise by 16% to $6 billion.
It also predicts TV sales will drop 8% during 2021 and revenues will dip by 1%, except for sets larger than 70 inches, which will grow 6% in unit sales, and 8K ultra-high-definition TVs, which will triple sales to 1.7 million units.
Spending on connected health-monitoring devices is more telling, however. Digital-health sales that grew 73% during 2020 to $632 million will grow another 34% during 2021 to $845 million, according to a five-year CTA consumer-spending projection. After 2021, however, growth will flatten to 14% per year on the way to reaching $1.25 billion by the end of 2024.
"When the economy is at its worst, we see innovation at its best," Shapiro said. "During the financial crisis in 2008/2009, we saw the rise of cloud computing, rapid acceleration of e-commerce, ride-sharing and other innovations. We see similar things now."
During 2020, revenues from the delivery of products bought online grew as much in 8 weeks as they had during the previous 10 years, Shapiro said, citing an April 2020 McKinsey & Co. Inc. report called "Meet the Next Normal Consumer." Demand for entertainment at home was so sharp that it took the new The Walt Disney Co.'s Disney+ service just 5 months to sign 50 million subscribers, compared to the 7 years it took Netflix Inc.
The pandemic did slow down the advancement of next-generation 5G standards, but it also improved consumers' opinions about the possible use of drones to deliver products and made virtual reality much more credible not only for gaming and training, but for remote technical and medical applications.
Artificial intelligence, natural language processing and other advanced technologies that did not get their due as consumer or small business products are also getting another chance for their ability to make no-touch interfaces and remote access simpler.
The sale of technology to consumers will continue to grow, but the changes to watch for have more to do with the expansion of digital health, robots for process and factory automation, the expansion of 5G, and the growth smart cities and smart vehicles, Shapiro said.
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