Why we’ll all be spending more on tech in the next five years
Market intelligence firm predicts big spikes in sales of wearables, Ultra HD TVs and wireless speakers between now and 2021
Consumers are likely to spend more on consumer electronics over the next five years as connected hardware grows in popularity, according to Euromonitor.
In its latest report, the market intelligence firm noted that a shift in consumer preferences will boost sales by both value and volume of high-end products such as smart wearables and LCD televisions by 2021.
“Consumers are much more sophisticated and thus, their expectations have risen too,” says Loo Wee Teck, Euromonitor’s head of consumer electronics.
For example, consumers made do with general packet radio service (GPRS) and third generation (3G) internet data speeds in the past but are now demanding long-term evolution (LTE) services for high speed access, he says.
The retail value of this sector is projected to hit US$45 billion in 2021, versus the estimated US$18.7 billion for 2016, according to Euromonitor.
“The appeal of wearables extends beyond the niche demographics of techies and fitness enthusiasts. Consumers are buying wearables as fashion accessories and to look cool,” Loo says.
Smart wearables in particular, which include the Apple Watch, are poised to reap healthy sales.
“Value sales of smart wearables are expected to be worth more than five times as much as activity wearables by 2021,” Loosays.
Unlike their smart counterparts, activity wearables such as the Fitbit fitness trackers only boast one function and don't allow for installation of third-party apps.
Sales of wireless speakers are projected to reach 73 million units by 2021, a 25 per cent growth between 2016 and 2021. Wireless speakers still remain a relatively niche product compared to more in-demand items such as smartphones, but the product’s growth isn’t based on quantity.
“For consumers who buy wireless speakers, the quality of the speakers will be a primary purchase criterion. Established brands like JBL and Bose stand to benefit, as consumers are willing to fork out a higher price for proven quality,”says Loo.
Retail value sales of LCD TVs are set to outperform volume sales by 2018, according to the report.
“The push for ultra-high-definition is paying dividends for TV manufacturers, as consumers are easily sold on the pretext that more pixels, i.e. higher resolution, equates to better video quality,” Loo says.
Declining cable TV subscriptions and the explosion of internet television aren’t expected to derail LCD TV growth either, he adds.
“The fact that consumers are watching more shows on their mobile devices will also help sales, as consumers have acquired the habit of multiscreen viewing.”