CHICAGO, July 25, 2024 – United States consumer technology sales revenue is now forecast to decline by 2% in 2024, reflecting underperformance in the first half of the year and unchanged macroeconomic conditions, according to the latest Future of™ Consumer Technology report from Circana™. Despite these challenges, Circana remains optimistic about growth in specific categories, such as notebook PCs and large-screen TVs, and expects overall industry growth to resume in 2025 and 2026.
“As we reach the midpoint of 2024, it’s clear that many of the economic pressures from late 2023 and early 2024 are still impacting consumer spending,” said Paul Gagnon, vice president and technology industry advisor, Circana. “While unemployment remains low and real wage growth has been positive, high credit card debt and mortgage interest rates continue to strain consumer finances.”
Circana’s latest forecast indicates that most consumer technology categories underperformed in the first quarter, and continue to do so, looking weaker in Q2 as well. In addition, the anticipated interest rate cuts that were expected to boost consumer confidence and spending in the second half of the year look less significant, prompting a more cautious view for the remainder of 2024.
However, Gagnon remains positive about the long-term outlook: “We are still expecting growth in 2025 and 2026, particularly in key categories such as notebook PCs and large-screen TVs. Introducing significantly innovative products that offer enhanced productivity, performance, and convenience will drive consumer interest and upgrades. Emphasizing affordability will be crucial in attracting consumers who are under financial stress, particularly younger demographics facing high rent and student loan repayments.”
Areas of optimism and growth include:
- Computers and AI PCs. Despite the overall cautious outlook, Circana has seen signs of improving consumer demand. This is attributed to consumers beginning to upgrade and refresh products purchased early in the pandemic, signaling the start of a replacement-driven wave expected to continue over the next two and a half years.
- Ultra-Large Screen Size TVs. Demand for ultra-large screen size TVs has exceeded expectations. This category has been upgraded in the forecast for the second half of the year, especially given its popularity during the holiday season. Circana projects positive growth for TVs as a whole over the next two years.
- Tablets. A notable boost in tablet sales in late May and into June has led to an upgraded forecast for this category. The introduction of a new generation of products with upgraded capabilities seems to have resulted in consumer refresh activity and spending stemming from innovation.
Despite the current headwinds, Circana emphasizes the importance of innovation in driving consumer demand. New products, especially in computing, are expected to reignite interest and spending in the consumer technology market.
Future of Technology forecasts and insights are based on forecasted sales of technology products captured in Circana’s Retail Tracking Service point-of-sale data.
