CTA: 5G smartphones will ship 106M in 2021 as U.S. tech sales hit $487B

More than 106 million 5G smartphones are expected to ship in 2021, and overall tech industry sales will reach $487 billion in 2021, according to the Consumer Technology Association, the trade group that puts on the CES trade show.

The 5G smartphone sales will generate $61 billion in revenue (up 404%) and shipments will be up 530% from 2020 as the big carriers promote their networks with deep phone discounts, said Rick Kowalski, director of industry analysis and business intelligence at the CTA, in an interview with VentureBeat.

“Smartphones have a lot going for them this year, after 2020, which saw a decrease in smartphone shipments,” Kowalski said. “This year, we have pent-up demand. People put off purchases last year because they just weren’t on the go as much. They were focused on home entertainment or home electronics. And this year people are getting out and about more. And it’s also prime time for 5G upgrades.”

There are a lot of promotional deals out there right now. The networks have invested a lot of money in these 5G networks and now they want customers on those networks. And they’re doing what they can to get people on their networks with great phone deals. The customers may or may not get the benefits of 5G, depending on the rollout in their communities. But over time, the purchases should pay off. I took Verizon up on its free smartphone deals and got myself a 5G iPhone 12 this month. The 5G coverage is mixed in my area, but it’s good when it works.

“The providers are rolling out all of the different types of 5G service that they can on all the frequencies,” Kowalski said.

Overall electronics sales

Above: iPhone 12 Pro

Image Credit: Jeremy Horwitz/VentureBeat

Overall retail sales revenue for the tech industry in the U.S. will reach a record-breaking $487 billion in 2021, up 7.5% jump year-over-year –  thanks to unprecedented consumer demand for tech related to work, school and lifestyle, the CTA said.

“Across the board, we’re seeing healthy demand, very high demand for electronics. That is carrying over from a pandemic,” Kowalski said. “We’re going from that phase last year where everyone needed home entertainment and computing devices to help them work and learn at home and to stay entertained. But we also have this reopening of the economy, returning to offices, schoolchildren returning to schools,
and people just getting on the road now. So there’s a drive towards more mobile technologies.”

The total revenue of health and fitness tech will reach $13 billion in 2021, up 12% over last year. With demand for products such as Peloton and MYXfitness soaring, roughly 1.5 million units were shipped in 2020, and in 2021 the devices will cross 2 million (a 43% rise) and earn $3.9 billion (a 40% increase).

Shipments of e-toys including robots and musical instruments, will reach 61 million (a 7% increase), earning $3.6 billion (up 14%) in 2021 as a result of parents turning to education-focused toys in a lost pandemic school year.

Gary Shapiro, CEO of the CTA, said in a statement that the pandemic changed consumers’ relationships with tech forever. Tech played a big role in our lives via working, learning, staying connected with loved ones, and taking care of our health. It stayed resilient in the face of crises such as supply chain shortages, labor gaps, vaccination rollouts, and looming inflation, Shapiro said.

CTA’s twice-yearly U.S. Consumer Technology One-Year Industry Forecast reflects U.S. manufacturer shipments for more than 100 consumer tech products and related software and services. The report identifies major trends shaping the future of consumer technology as the economy navigates its path toward the post-pandemic world.

Gaming’s outlook

Above: The PlayStation 5 consoles.

Image Credit: PlayStation

Following a record year for gaming software and services in 2020 – a 25% increase in revenue – 2021 will see a slight decline reaching $48 billion, down 2% over last year.

Following more than $5 billion in revenue in 2020, gaming consoles will see continued growth in 2021 as combined home and portable console shipments reach 19 million units (up 6%), accounting for $6 billion in revenue (up 18%).

“There’s a lot of positive feedback about the new consoles,” Kowalski said. “People are just trying to get their hands on them. And they will over time.  We see this in the beginning of every gaming console upgrade. There is just never quite enough to meet demand.”

As for the chip shortage, he said sales have been very good despite that. The car industry has been hit particularly hard, with lost sales possibly going over $100 billion in 2021, according to a report by KPMG.

“But chip shortages can impact manufacturers at any given moment,” he said. “Across the board, all manufacturers are seeing just unprecedented demand. People are very eager to buy technology.”

Virtual Reality (VR) and Augmented Reality (AR) hardware returns to growth in 2021 following a pause in 2020 caused by widespread disruption to the global supply chains. VR shipments will reach 2.7 million units (up 30%). Total revenues for the VR and AR hardware shipments will cross more than a billion dollars (a 34% increase).

“We’ll keep an eye on [VR],” he said. “Augmented reality is worth watching too as an application for 5G. But it may be a ways off before we can get a lightweight technology that rests on your ears and nose comfortably.”

Staying connected

Above: Qualcomm’s Snapdragon 888 Plus 5G Mobile platform has beefed up AI capabilities.

Image Credit: Qualcomm

5G smartphones will see exponential growth as consumer demand continues to climb with many looking forward to upgrading their phones, waiting to explore the benefits of this new technology.

Overall shipments of smartphones will increase 10% to 154 million units, earning $73 billion in revenue, up 15%. Devices such as Apple Airpods and Samsung Galaxy Buds continue to see strong growth in 2021, with 88 million units expected to ship, a 27% jump from last year, representing $8.7 billion in revenue (8% increase).

With many Americans still working from home, the CTA expects the record year-over-year growth trend of 2020 to continue for laptops in 2021. Shipments for laptops will reach 76 million units (up 9%), earning $45 billion in revenue (up 11%).

Staying healthy and hip

Above: Peloton treadmill

For the first time, the CTA measured connected exercise equipment such as stationary bikes, rowers, and treadmills. With demand for products such as Peloton and MYXfitness soaring, roughly 1.5 million units were shipped in 2020, and in 2021 the devices will cross 2 million (a 43% rise) and earn $3.9 billion (a 40% increase).

Shipments of connected health monitoring devices such as smart thermometers, pulse oximeters, and blood pressure monitors will grow to 13 million units (up 23%) and earn $740 million in revenue (a 17% increase). The total revenue of health and fitness tech will reach $13 billion in 2021, a 12% growth over last year. Smartwatches will grow 8% in unit shipments, driven by tech-savvy and fashion-conscious consumers.

“This raises the bar on exercise equipment and people will expect more from their exercise equipment,” Kowalski said. “It will be connected and tie in with their other fitness tracking services. And it will just fit in the smart home and their smart life.”

Personal mobility, which includes battery-powered bikes and scooters, is one of the fastest-growing categories. The CTA projects a total of 1.2 million e-bikes to ship in 2021 (up 15%), earning $1.9 billion in revenue (a 3% jump).

And with growing demand for smart speakers and home robots, the CTA projects that more than 100 million smart home devices will ship in 2021 (up 11%), holding flat on revenue, with $15 billion.

Staying engaged and entertained

Above: CTA estimates for key electronics sectors from 2019 to 2021.

Image Credit: CTA

As music, audio books and podcast listening continues to gain momentum, the CTA predicts earnings will reach $10 billion (up 18%). And after an unprecedented surge in subscription growth for video streaming services in 2020, 2021 will see continued growth in demand. The revenue for these services is expected to reach $43 billion, up 15% over last year.

Overall TV shipments will hit 45 million units, lower than 2020’s record volume of more than 47 million. But revenue growth will hit 5% ($24 billion). More than three-quarters of TVs shipped this year will be 4K UHD. With a majority of content consumption still happening indoors, consumer enthusiasm for large screen TVs is growing.

LCD TVs with screen sizes 70-inches and up will reach 4.3 million in shipments, earning $4.4 billion, and 8K Ultra HD sets, which will see shipments climb to 2.6 million units in 2021, are expected to earn $5.7 billion (a 371% increase). NextGen TVs will see shipments increase nearly sixfold to 2.1 million units with revenue of $2.9 billion, up 425%.

Parents found value in using educational toys as learning shifted to home during the pandemic. Shipments of e-toys including robots and musical instruments, will reach 61 million (a 7% increase), earning $3.6 billion (up 14%) in 2021. Specifically, science technology engineering and math (STEM) toys, which make up a growing part of this category, will see 4.7 million shipments (a 19% jump), earning $187 million (a 24% increase).

It’s a good outlook, and we’ll take it, as we still remember the depths of the pandemic.