CES, the world's most influential technology convention, is back in Las Vegas on January 5-7. Yesterday, Consumer Technology Association (CTA), owner and producer of CES, hosted a preview press conference for media attendees about the technology trends to watch at this year's show and released its latest research on U.S. technology retail revenues.
CTA Forecasts Lower U.S. Technology Sector Revenues as Industry Fights Inflation
CTA released a new research that projects U.S. technology retail revenues will fall into $485 billion in 2023 as the industry fights inflation. This new data puts revenues slightly above pre-pandemic levels, following a three-year surge in consumer technology spending that peaked at a record-breaking $512 billion in 2021. While CTA anticipates a looming recession and inflation will weigh against consumer spending in the coming year, consumer technology industry revenues will remain roughly $50 billion above pre-pandemic levels.
Notable areas of revenue growth for the technology industry in 2023 include:
- Technology Services: Consumer spending on technology services including gaming, video, audio and apps will grow for the fifth straight year, generating $151 billion in consumer spending. The video streaming market is especially competitive with major brands vying for consumer attention.
- Automotive Technology: Factory-installed automotive technology revenues are projected to rise 4% to $15.5 billion in 2023. Advances in battery technology have allowed producers of electric vehicles to offer increasingly consumer-friendly options, with companies including Panasonic, LG and other companies building infrastructure to support more battery production.
- Health and Fitness Technology: Health and fitness services including fitness subscription services and digital therapeutics are projected to rise 9% to $928 million in 2023. Thanks to a landmark 2022 ruling from the U.S. Food and Drug Administration (FDA), over-the-counter hearing aids will be sold in stores for the first full year – generating $891 million in revenue in 2023.
CTA has lowered expectations for sales of laptops, LCD TVs, tablets, smartphones and gaming consoles. Despite flat overall TV sales, OLED TV is projected to add $2.3 billion in 2023 revenues as the industry focuses on premium products. As home gaming console sales slow, portable gaming models gain traction with consumers who are spending less time at home since the pandemic began. Portable gaming consoles will generate $1.5 billion in 2023, up 41% over 2022.
Global Challenges Confronting Industry
At the preview press conference, Steve Koenig, Vice President of Research at CTA, spoke about the challenges businesses facing globally.
- Supply Chains Remain Vulnerable - The global supply chains main vulnerable due to the pandemic. However, China's dismantling of its zero-COVID policy is a positive sign for supply chains.
- Semiconductor Demand Softening - Semiconductor demand is not as strong as last year. Chip inventories rising and lead times falling.
- Labor Shortages - Across the global economy, businesses are struggling to find skilled workers. U.S. has a shortage of 10 million workers. Koenig also pointed out that the warehouse and logistic industry has a huge shortage of truck drivers.
- Stubborn Inflation and Rising Interest Rates - U.S. Fed raised interest rates six times in 2022. Businesses are facing challenges in an raising interest rate environment.
During Economic Downturns, Innovation Accelerates
Koenig also spoke about the economic downturn the global economy is facing in 2023 and thus technology innovation will accelerate during this time. Challenges also mean opportunities. He used the 2008-2009 Great Recession as an example that consumer technology such as 4G LTE, mobile broadband, smartphones, tablets and netbooks accelerated during that time. And in 2023, CTA projects that enterprise technology such as 5G, industrial IoT applications, connected intelligence, autonomous systems and quantum computing will accelerate this year.
And he cited a quote from Christopher Freeman, a British Economist, on this trend.
"Innovation accelerates and bunches up during economic downturns only to be unleashed as the economy begins to recover, ushering in powerful new waves of technological change." - Christopher Freeman, British Economist
Enterprise tech innovation will upgrade the global economy through transformation in cloud, AI, robotics, and cybersecurity. In addition, the global economy will also see automation and virtualization in 5G enterprise, industrial IoT, Web 3.0.
"5G will help us to enter into a new phrase of automation and virtualization. We will see more IoT and commercial focused technology across the economy. A lot of these 5G transformation will create new applications in Web3," said Koenig.
MoT: The Metaverse of Things
Koenig called the metaverse "the next generation of internet", an online experience that has an elevated sense of immersion. Metaverse's startups started to pop up at CES in recent years. And at this year's show, we started to more real-world applications of metaverse in virtualization and immersion. He used a company named Touchcast as an example.
Touchcast helps companies to set up their present in the metaverse to crate retail experience, conduct staff trainings, create team meetings, and more. It seamlessly integrates with Microsoft Teams.
Transportation Themes at CES 2023
Transportation themes you will see at CES 2023 include:
- EVs and the Evolution of the Electrification System
- Advancement of Autonomous Systems and Applications
- Transformation of the In-Vehicle Experience
Electrification has been utilized in different transportation methods. EV truck, electric boat, and even electric aircraft.
Ryse Aerotech’s ultra-lightweight eVTOL just completed its first manned test flight in June 2022. Powered by six electric motors, eVTOL can go as fast as 63 mph.
Three themes in health tech you will see at CES 2023:
- Digital Therapeutics - New ways to manage chronic health conditions
- Telehealth - Expanding access to doctors and improving remote monitoring
- Fitness Tech - Connected exercise and sports equipment changing home gym experience
Koenig highlighted that "technology is not a replacement. It's a tool to help in-between visits."
Sustainability and ESG
Sustainability and ESG is another trend you will see at CES 2023. There are a lot of topics under the umbrella of sustainability including: smart grid, supply chain, ag/food tech, clean air/water, alternative energy, minimizing packaging, recycling technologies, reducing use of rare earth metals, and more.
An example he used was ACWA Robotics, a company that uses robotics and digital solutions at the service of water distribution systems. It bring water utilities and network operators accurate and efficient data to optimize repairs and prevent water leaks and losses.