Consumers will spend more than $500 billion on high-tech products and services this year, and many of them will be on display at CES this week.
Steve Koenig, vice president of market research for the Consumer Technology Association, operators of CES, on Monday outlined tech trends that are driving development and investment in the industry that hosts its annual showcase in Las Vegas.
More than 170,000 people have attended CES in previous years, but after several large tech companies backed out of in-person attendance, it has set the tone for a subdued gathering this year.
COVID spurs industry growth
While the pandemic is expected to keep thousands away from this year’s show, Koenig said the spread of COVID-19 has helped drive growth in the industry.
“The global stage for innovation is accelerated during a crisis,” he said.
That seems to be the case in recent years with strong demand for tech products increasing from $316 billion in 2017 to $505 billion expected in 2022.
The demand is occurring on multiple fronts, he said.
Growth is expected for notebook, tablet and laptop computers, smart appliances, smart watches and other wearable devices, smart speakers, ultra high-definition televisions and game consoles.
Eight online subscriptions
Research commissioned by the association says the average consumer subscribes to eight different types of online services such as streaming, wellness and lifestyle services and food delivery — all growing as a result of lifestyle changes caused by the pandemic.
Koenig noted that Netflix has 214 million subscribers; Amazon Prime Video has 175 million subscribers; Disney Plus has 118 million subscribers; and Apple TV’s subscriber count is 20 million.
U.S. households continue to purchase more content through online delivery platforms. Total spending on streaming services and software is expected to reach $130 billion in 2022, up 6 percent over 2021.
Spending on video streaming services is expected to reach $47 billion in 2022, up 7 percent over 2021.
Streaming services that offer music, audiobooks and podcasts will see consumers spend $12.9 billion in 2022, up 15 percent over last year.
Consumer spending on gaming software, including downloads, game streaming services and in-game purchases, will rise 5 percent to $53.6 billion this year.
Automotive technology, one of several highlights of this year’s show, is rebounding after being slowed by a global shortage of microchips needed for cars.
Factory-installed automotive tech is projected to reach $16 billion in shipment revenues this year, a 7 percent increase from 2021. Demand for automotive tech is increasing as auto manufacturers produce more and continue to develop advanced driver assistance systems that make vehicles more efficient and safer.
The arrival of 5G in smartphones is expected to reach 154.1 million units — $74.7 billion in shipment revenues — in 2022, marking a 3 percent growth from 2021. The upward trend is driven by the increasing availability of 5G, as 5G handsets will make up 73 percent of smartphone shipments, $61.37 billion in revenues, this year.
Health product demand
The demand for health products will continue to climb through the pandemic, Koenig said.
Connected exercise equipment grew significantly through the pandemic, generating nearly $3.8 billion in shipment revenues in 2021. CTA projects connected exercise equipment in 2022 will experience 17 percent growth and reach nearly $4.5 billion in shipment revenue. The growth trajectory suggests that health-conscious consumers are finding practicality and convenience in exercising at home, even as gyms and workout classes reopen.
Personal EVs such as electric bikes and scooters are also on the rise as consumers seek alternatives to driving their cars or taking public transportation for short trips. Electric bike shipments are expected to reach almost 3 million units and $6 billion in revenues in 2022.
Koenig said investment is keeping pace with demand through the pandemic pivot.
He said there were $73.2 billion in deal valuations in the third quarter of 2021.
The only things slowing tech development are the lack of microchips and supply-chain issues, Koenig said.
But he noted that Samsung is investing $205 billion and Intel $95 billion in new facilities to manufacture chips which should improve supply by the middle of the decade.
Health and safety precautions
The association will open the show Wednesday with several health and safety precautions. Attendees will be required to prove they have received their COVID-19 vaccination for admission and all attendees will be required to wear masks in exhibit booths, show facilities, keynote halls and on all CES shuttle buses.
Monitors will work to enforce mask mandates on the show floor.
The association is asking show attendees to take the Abbott BinaxNOW COVID-19 Self Tests that are being provided for free at badge pickup locations.
“If you are experiencing COVID-19 symptoms while at a CES venue, please immediately visit a first aid area in the venue in which you are located to obtain a rapid molecular Nucleic Acid Amplification Test,” an association spokesperson said. “You will be asked to remain in an isolated observation area and will receive test results within 25 minutes. If you test positive with a molecular test while in a CES venue, we will provide a service to drive them to their hotel. Per CDC guidelines, there is a 10-day isolation period, so they will not be able to return to CES and we will ask for your badge. Once they return to your hotel, the quarantine policy of the hotel takes effect. Each Las Vegas hotel has its own policy and we encourage you to check your hotel’s website for their policies if they require additional information.”