NPD: U.S. Consumer Technology Sales Dropped 8% in 2022 and Will Fall 5% in 2023, But TV Sales to Grow

Following tremendous growth fueled by pandemic needs in 2020 and 2021, U.S. consumer technology industry sales revenue is expected to end 2022 down 8% year over year, according to The NPD Group.

The research firm’s latest Future of Technology forecast predicts sales will decline by an additional 5% year over year in 2023 and remain flat in 2024. Tech sales are expected to return to growth in 2025, rising by 2%, as consumers once again begin to replace devices purchased during the pandemic.

“The replacement cycle for many technology products is three to four years and, in some cases, more. That, in conjunction with challenging economic conditions, is slowing spending in the industry,” Paul Gagnon, VP and technology industry advisor for NPD, said in a statement. “Upgrade cycles for pandemic-driven purchases will ramp up in 2024, creating opportunity. In addition, manufacturers that introduce innovative products and technologies, which were somewhat lacking during the pandemic, will see success.”

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The NPD anticipates unit sales of TVs and home automation devices will remain positive throughout the forecast period. TV unit sales are expected to grow by low single-digits, year over year through 2025, as prices become more affordable at all sizes and the shift to larger sizes accelerates. Home automation product sales, which grew in 2022 even after strong demand during the pandemic, will continue to grow, with new models coming to market and with the expansion of products using the new Matter smart home standard.

“Even during challenging economic times, the consumer electronics industry tends to perform well. If consumers cut back spending on more-traditional entertainment activities, devices and services can be easy and available replacements,” Ben Arnold, executive director and consumer technology industry analyst for NPD, said in a statement. “Despite near-term economic headwinds, consumer electronics sales will remain above 2019 levels and industry average selling prices are expected to grow by the end of the forecast period in 2025 — a sign that tech remains a household spending priority.”

NPD: Weekly Consumer Tech Sales Up 34%

With increasing numbers of consumers spending time in the home due to the coronavirus pandemic, sales of consumer technology continues to boom.

New data from The NPD Group found record results continue in the consumer tech market with sales over $2.2 billion during the first week of August (the week ending Aug. 8), a 34% increase compared with the same week a year ago. Revenue during the month of July increased 18% over last year, even without the Prime Day shopping holiday.

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Return to school across all grades may be limited to in-home education and limited social gathering, but sales of productivity focused technology products have picked back up with PCs fueling much of the growth.

Notebook PC revenue growth in the U.S. was up 64% compared to same week last year. Beyond PCs, dollar sales of PC headsets (+127%), monitors (+97%) and routers (+87%) all increased as preparations for distance learning drove sales of a slightly altered set of products for back to school.

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Stephen Baker, VP and technology industry advisor at The NPD Group, said CE categories tied to home office solutions, organization, and school saw double- and triple-digit dollar sales increases at retail.

“Although [work from home] growth is beginning to level off,” Baker said in a media interview last month.