Why it’s time to jump on the smart speaker bandwagon

60% growth expected in 2018.

Excitement about emerging technologies and the resilience of historically leading categories will drive the US consumer technology industry to a record-breaking $351 billion in retail revenues ($266 billion wholesale) in 2018 – 3.9% higher than 2017, according to new research from the Consumer Technology Association (CTA).

CTA president and CEO, Gary Shapiro said, “Technology is improving our lives in more ways than ever – and consumer enthusiasm is growing just as quickly as companies can bring their innovations to market. Our forecast incorporates several key economic factors including a strong stock market, continued job growth and stable rules for international trade to forecast these record-setting sales for breakthrough technologies and long-time market leaders alike. The driving themes of 2018 will include voice computing, artificial intelligence and connectivity that make our lives better and more efficient.”

Overall, US sales of connected devices are projected to reach 715 million units in 2018 – a 6.6% year-on-year increase. Specific products projected to contribute significantly to this growth include:

Smart Speakers

Coming off of a tremendous 2017 holiday season, voice-controlled smart speakers, including Amazon Echo and Google Home, are going gangbusters. Unit sales increased 279% in 2017, and CTA projects 2018 unit sales will reach 43.6 million units (60%) and earn $3.8 billion in revenue (93% growth). As voice recognition technology is integrated into more speakers at a variety of price points, smart speakers is a category to watch in 2018.

Smart Home

The popularity of smart speakers will have a ripple effect on the smart home market, as consumers discover the benefits of voice-activated home automation. CTA expects 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 40.8 million units in 2018 (41% increase over 2017), earning $4.5 billion (34% increase).

Virtual Reality (VR)

Popularity among gamers and an increasingly competitive market continue to drive growth for VR/AR headsets and eyewear, with unit shipments projected to grow to 4.9 million units this year (25% increase) tallying $1.2 billion in revenues (18% increase).

Drones

Total drone sales are expected to reach record highs of 3.7 million units in 2018 (20% increase) earning $1.2 billion in revenue (17% increase). CTA’s forecast also delineates US drone sales for units below and above 250 grams, the FAA’s division for mandatory drone registration. Drones below 250 grams are expected to reach just over 2.2 million units this year, while drones above 250 grams will reach 1.5 million units shipped.

Wearables

The total health, fitness and sports tech market, including fitness activity trackers, other health and fitness devices, hearables, over-the-counter hearing devices, smartwatches and, for the first time, sports tech (smart basketballs or baseball bats) is expected to reach sales of 49.3 million units in 2018 (4% increase) and earn $6.4 billion (1% increase).

CTA senior vice president of research and standards, Brian Markwalter commented, “Consumers are rapidly adopting new, emerging technology products – with voice-activated smart speakers as the stand-out of 2017 and 2018 – sparking growth in smart home devices, as voice interaction adds a new level of convenience and excitement to our lives.

“At the same time, core categories – such as smartphones, laptops and TVs – continue to surpass expectations. 2018 will prove to be a milestone year for TVs, especially as LCD 4K UHD TVs make up half of all TVs sold in 2018.”

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