CTA Forecast: 4K Ultra HDTVs To Grow 59% In 2017
The Consumer Technology Association released mid-year forecasts this week showing that newer technologies like high dynamic range (HDR) are helping to boost sales of some 4K Ultra HD TV segments, but overall, the television business is seeing shipment declines this year.
High dynamic range offers pictures with a wider range of contrast from darker blacks to deeper whites while preserving fine color and grayscale detail in both the darkest and brightest portions of the picture.
Most consumers will see it as much more vibrant and realistic colors overall, with bright peak elements appearing (and measuring) brighter than the surrounding elements in the picture. Things like bright torches at night and explosions seem more real.
The CTA’s “U.S. Consumer Technology Sales and Forecasts” said this week that these HDR features are continuing to resonate with consumers. The report said that 4K UHD TVs are one of the industry’s fastest growing segments, far outpacing the transition to HDTV, with unit sales forecast to hit 16.7 million units. The CTA said that would represent a 59 percent increase, and generate $14.6 billion in wholesale dollar revenue, up 45 percent from 2016.
These advanced televisions represent one of a series of “connected” product categories that the CTA shows bringing growth in unit sales and factory dollar volume to the overall consumer electronics industry.
Read more about the CTA’s mid-year sales forecasts after the jump:
Such products are driving the U.S. consumer technology industry to an estimated 3.2 percent revenue growth in 2017, accounting for $321 billion in retail revenue ($251 billion wholesale), the CTA said.
“More and more consumers are adopting connected products at a rapid pace, with several categories such as drones, VR and OLED TVs surpassing significant revenue milestones just a few years since their market entry,” said Brian Markwalter, senior vice president of research and standards, CTA. “At the same time, core categories, such as smartphones and laptops, continue to experience unit and revenue growth, demonstrating resilience in mature technologies. We believe the anytime/anywhere access to information and each other that connectivity enables a driving trend of our time.”
Despite advances in 4K Ultra HDTV, the CTA pointed out that the overall television category is now considered to be “maturing,” meaning it isn’t expecting any significant incremental growth in overall television shipments. In fact, television sets of all shapes, sizes, and capabilities are expected to be down slightly this year.
In 2016, LCD television, which represents the vast majority of televisions sold, enjoyed record unit shipments but the CTA said 2017 would initiate a period of slight declines with unit volume at 40 million units, representing a 1 percent decrease, and $18 billion in wholesale revenue, also a 1 percent decline.
Not surprisingly, then, the CTA said 4K UHD, HDR and organic light emitting diode (OLED) display technologies will drive future category growth. The CTA predicts OLED TV revenue will pass the $1 billion threshold for the first time this year.
The CTA said the television category ranks No. 2 overall in revenue contribution to the consumer electronics industry. It follows only smartphones. Tablets, laptops and automotive electronics (new entry) trail the television category.
For comparison’s sake, the CTA shows smartphones — also a maturing category — “continue to defy expectations. Despite widespread adoption, unit volume will grow 3 percent to reach 185 million smartphones shipping in 2017, with revenues expected to reach $55.6 billion,” which is a 2 percent decline, a first for the category.
Last year, CTA observed that consumers were slowing down the 2-year replacement cycle on smartphone purchases, which would hinder category growth to some degree. It set U.S. smartphone shipments at 183 million units in 2016, up 5 percent from 2015. Factory revenue was to climb 4 percent and hit $55 billion last year.
Tablets are leveling off after five prior years of growth, the CTA said. Tablet sales will decline in 2017, as CTA expects sales of 59 million units (5 percent decrease) and factory revenue of $16 billion, and 8 percent decline.
In 2017, the laptop market, including commercial and consumer channels, will sell 48 million units, up 2 percent over last year, and earn $28 billion in wholesale review, down 1 percent from last year.
The CTA also tracked the automotive electronics market, but where figures in year’s past reflected most aftermarket audio/video car installations, the industry is now charting primarily factory installs.
The CTA said automotive electronics joined the top five largest revenue hardware categories for the first time. Factory-installed automotive technology, from driver-assist features to entertainment systems, is projected to contribute $15 billion, up 12 percent, in revenue to the industry.
The CTA attributed this result to “overall automotive sales performing well, a rising tide of tech integrated into all vehicles and the increasing density of tech installed in each vehicle.”
Joining 4K Ultra HDTVs as “emerging technologies” in the consumer technology industry, the CTA charted wearables, smart home, digital assistant devices (Amazon Echo and Google Home), virtual reality and drones as the saviors of future industry profitability.
Digital assistant devices with voice recognition technology is one of the “defining trends of 2017,” the CTA said. 2017 unit sales projections for voice-controlled digital assistant devices are projected to reach 11 million units, up 53 percent, for $1.3 billion in revenue, up 22 percent. Helping the category this year is the expected entry of the Apple HomePod.
Virtual reality continues to generate interest behind the emergence of mobile headsets and entertainment content. Shipments of VR headsets are projected to grow to 5.3 million units, up 79 percent, for $1.3 billion in factory revenue, up 43 percent.
Drones, which were a newbie favorite last year, are expected to ship 3.4 million units in 2017, up 40 percent, accounting for $1.1 billion in revenue, which is up 44 percent.
“CTA’s forecast delineates U.S. drone sales for units below and above 250 grams, the FAA’s division for mandatory drone registration: Shipments of drones below 250 grams are expected to reach just over 2 million units, while drones above 250 grams will surpass 1.3 million units shipped.”
Smart home devices represent the second most bullish categories behind numerous personalized home automation experiences. CTA projects 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 27 million units in 2017, which would be a 50 percent increase over 2016, and they will earn $3.3 billion in factory revenue, up 48 percent increase.
The mack daddy of promising new consumer technology categories is wearables. The CTA is setting the total wearables market – including fitness activity trackers, other health and fitness devices, hearables, over-the-counter hearing devices, and smartwatches – at 48 million units in 2017, up 9 percent, and accounting for $5.6 billion in factory revenue.
“Driven by consumer demand for the products we already know and love, as well as new, innovative technologies, revenue growth in the consumer technology industry is exceeding expectations,” said Gary Shapiro, president and CEO, CTA. “Not only are breakthrough technologies changing our lives for the better – such as drones delivering medical supplies to remote areas or the use of VR in patient care – tech is also a key driver of the U.S. economy, outpacing GDP growth, and reinforcing America’s role as a global leader in innovation.”
By Greg Tarr
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