What Display Daily thinks: There are a number of questions about the exuberance and tendency for analysts and companies to pronounce a leap of faith in consumer spending in 2025. Most of the excitement, if you can call it that, stems from corrections in consumer buying patterns in the first quarter of this year.
A few notes of caution are worth mentioning:
- AI and AI IT upgrades should have an impact but there is still a great deal of fear about the impact of AI on hiring and also on the return on investment. If companies upgrade their IT departments with more AI software and hardware but it also leads to layoffs, no matter how big or small, the knock-on effect may dampen consumer spending even as IT spending grows.
- TV prices are going to have to come down for the simple reason that Gen Z continues to shun broadcast TV. There’s a crisis in general TV watching, even as the demand for content grows. That’s the paradox of the situation facing TV brands.The Olympics may turn out to be a boost for sales but we’ll see how that pans out by the end of this year when we have a better handle on the numbers and the general trends in consumer TV buying. Prices have to keep coming down.
- Every manufacturer and brand has been in the same boat for the last two or three years so, there are inventories to be managed which, despite some growth this year, are still going to be a drag on all but a few of the winners in market share gains. That has to mean a display industry that is going to be very, very competitive with pricing pressure, political machinations, and battlefronts in every region. This is not growth that may lift the industry; this may be growth that weeds out the stragglers.
US Consumer Spending Rising at Modest Pace
According to a recent research report from the Consumer Technology Association (CTA), the US consumer technology industry is projected to see a modest growth of 1% in retail revenues, reaching $505 billion in 2024, with an anticipated acceleration to $527 billion in 2025, a 4.4% increase. This growth comes after two consecutive years of declines, despite a drop in hardware revenues. The increase is partly attributed to a reduction in inflation, projected at 3.0% for 2024, down from 3.4%t in 2023 and 6.5% in 2022.
The report highlights that over 750 million connected consumer tech devices are expected to be shipped to the US this year, with laptop shipments projected to rise by 4% from 2023, totaling 53 million units. Consumer spending on software and services is anticipated to constitute 33%of total consumer technology expenditures. Among the twelve major hardware categories, six are expected to see an increase in shipments, including computing (up 3.6%), digital health devices (up 1.2%), and digital cameras (up 6.2%).
Prices for certain tech products saw significant declines in 2023, with 4K Ultra HDTVs dropping by 12%, smart doorbells by 6%, and both wireless earbuds and home game consoles by 5%.
