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Consumer Technology

For the remainder of 2023, consumers grappling with higher debt levels and persistent inflation are likely to exercise caution in their technology spending. Economic uncertainty combined with recently refreshed PCs still within the typical refresh cycle mean consumers will prioritize essential expenses and look to curb discretionary spending. Additionally, the lack of significant innovation will prompt consumers to exercise patience, awaiting both improved economic conditions and more compelling technological advancements before committing to new tech investments.

The best way to grow in audio right now is to take share. In an ultra-competitive environment, flooded with choices and copycats and lacking any true innovation, audio retailers and manufacturers need to find a way to stand out. Upgrading current buyers and drawing in new consumers will help continue to push these categories forward long term.

As we look for consumer electronics demand to strengthen in 2024, there are innovations and new categories that will help spark industry growth. A refresh of virtual reality and mixed reality products will offer new gaming and entertainment experiences and drive sales of accessories. Matter will help renew interest in smart home products and attract new customers. And item trackers’ rising popularity will grow the category by double digits. These categories — some new and some improved — will help consumer interest in tech rebound in 2024.

The consolidation of the U.S. mobile service market has, to an extent, neutralized the network wars as service coverage and speed offered by the three major players have mostly become on par. This network equilibrium has forced mobile carriers to get more creative with their service offerings, which now include entertainment and home internet bundles. And it is, these three major players who dictate the trajectory of smartphone sales and upgrade rates as U.S. mobile consumers heavily rely on promotional subsidies when replacing their smartphones. New phone sales dropped noticeably in the last several years, but signs of change are on the horizon, marking a potential end to this period of stagnation. Carriers are reverting to an aggressive subsidy model, albeit with a new twist — customers are required to subscribe to premium rate plans that offer content bundles.

As broadband internet continues to expand in the U.S., we see increased use of a broad range of consumer electronics from PCs to smart TVs in more homes. This will, in turn, drive increased sales demand as consumers look to benefit from the latest innovations. In many ways, the improving broadband situation helps to counter the current economic difficulties that the industry is facing.

The media entertainment landscape is rapidly changing due to the proliferation of ad-supported subscription plan tiers (AVOD) as well as free ad-supported streaming television (FAST). As such, distribution and content licensing strategies are evolving. TV-connected devices remain at the confluence of these viewership trends. OEMs managing their own operating system have a growing opportunity to drive services and ad revenues to supplement hardware profit margins. The ’20 are the golden age of TV for viewers, content owners, and hardware OEMs.