LAS VEGAS — The consumer electronics industry is seen returning to growth in the U.S. in 2024 after two years of declining sales. Analysts made that rosy forecast ahead of the CES 2024 tech trade show, which officially opens Tuesday.
The Consumer Technology Association predicts that U.S. retail sales of consumer tech will rise 2.8% to $512 billion in 2024. Last year, sales fell 3.1% to $498 billion. That followed a 2.7% drop in revenue in 2022.
One factor boosting sales is a refresh cycle for personal computers, smartphones and other gadgets bought during the Covid crisis in 2020 and 2021. The work-from-home, distance learning and shelter-in-place trends from the pandemic sparked a surge in buying of consumer electronics gear and digital services.
CES 2024: Spotlight On AI
Artificial intelligence features could spur upgrades of PCs, smartphones and other devices this year, Richard Kowalski, senior director of business intelligence for the CTA, said in a pre-CES news briefing. The CTA produces the annual CES tech trade show, which runs through Friday.
"AI is already incorporated in many devices and services," Kowalski said. "Think about the natural language processing in our digital assistants, computer vision in our vehicle safety systems and health tracking algorithms in our smartwatches."
He added, "In the year ahead, chip manufacturers will focus on bringing more AI capabilities to the devices in our lives to help drive device sales and upgrades."
AI is an overarching theme of CES 2024, Brian Comiskey, CTA's director of thematic programs, said late Sunday at a media event.
AI isn't a product category, but a range of technologies that touches all categories, Comiskey said. Plus, the "AI ecosystem" spans everything from chips to robots, he said.
While AI and machine learning technologies have been around for a while, the late-2022 launch of ChatGPT "gave some tangibility" to consumers about the idea of generative AI and what it could offer, Comiskey said.
Extended Reality Devices
Another growth driver this year will be augmented reality and virtual reality headsets, he said. Companies at CES 2024 will be showing off a bunch of extended reality devices. They range from VR headsets from Meta Platforms to smart glasses from Xreal.
But the 800-pound gorilla in the category is likely to be Apple, which plans to release its Vision Pro mixed-reality computer goggles on Feb. 2 in the U.S. Apple, which doesn't exhibit at CES, announced Monday that it will begin taking preorders for Vision Pro starting Jan. 19.
Meanwhile, televisions should see stabilizing sales in 2024, with some unit growth expected, Kowalski said.
CTA predicts 40.9 million unit sales of televisions in the U.S. this year, up 1% over 2023. But revenue will remain flat at $17.7 billion, he said.
Boost From Consumer Software
Further, the CTA sees sales of consumer software and services outpacing hardware sales. It predicts software and services revenue will rise 3.8% in 2024 to $163 billion, vs. 2.4% growth last year. Entertainment software and services, including audio, video and gaming, make up the largest share of spending in the segment.
Meanwhile, consumer electronics hardware sales are seen rising 2.3% to $349 billion, reversing from a decline of 5.4% in 2023.
Services and software should account for 32% of consumer tech spending in 2024, on par with last year, Kowalski said. Hardware makes up the rest of the consumer tech spending pie.
Kowalski predicts that 2024 will be the "year of the megabundle." Companies will promote bundles of services as a way to offer consumers discounted rates on their favorite services while also simplifying their payment process. That includes streaming video and audio services, wireless and home broadband internet plans, and retailer subscriptions.
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