CTA Ratchets Back Unit Sales Forecasts From January Report; Sees Phone Sales Falling 6-15%
CTA slashed 2020 unit sales forecasts for core CE categories Friday “as consumers struggle with economic uncertainty” due to COVID-19.
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Smartphone sales are now forecast to fall by 6-15% vs. 2019 to 138-153 million units, the trade group estimated. It projected in its bi-annual U.S. Consumer Technology Sales and Forecasts report smartphone unit sales would rise 2% this year to 166 million and revenue 3% to $79 billion.
CTA sees TV unit sales dropping 8-14% year on year to 34-37 million units. The previous forecast called for shipments of 40.8 million units, a 2% uptick driving $23.4 billion revenue, flat with last year.
Though laptops benefited from consumer demand when the workforce and students prepared for stay-at-home orders, “the drag of a recession” will pull down sales for the year by 4-12% vs. 2019 to 46-51 million, CTA said. It predicted in January a 1% rise in both shipments (53 million) and revenue ($33.3 billion).
A bright spot is higher spending on video streaming services, with about half of U.S. households watching live TV and online streaming video “more often now than they typically do,” said CTA. It issued slightly higher spending projections on video streaming services to $24-$25 billion, a 29-35% increase over last year. The January forecast predicted a 29% year-on-year bump to $24.1 billion.
“Unemployment and downward pressure on consumer spending caused by this pandemic will bring significant headwinds to the tech industry outlook this year,” said CEO Gary Shapiro. “The tech industry has weathered many economic storms over the last few decades but as a whole the tech sector remains resilient and plays an indispensable role in our lives," said the executive. "Technology will be a catalyst for America’s comeback from crisis.”
Considerations factoring into updated 2020 projections were longevity of the health crisis, economic hardship placing downward pressure on spending, effects of the fiscal stimulus and shifts in consumer behavior, CTA said.
“The financial health of the consumer and their willingness to spend presents the biggest swing factor to the tech industry outlook,” said Steve Koenig, vice president-research. The group didn't give a revised industry forecast for 2020 revenues; in January, it predicted CE sales would reach $422 billion.