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As techies flooded into Las Vegas on Monday for the Consumer Electronics Show, market research firm Circana offered a sobering reminder that the tech industry is still in a slump.
According to data shared with attendees, total dollars spent on tech products in the US declined 10% in 2023, and just 12% of tech categories experienced dollar and unit growth.
“It’s been a tough year,” Paul Gagnon, vice president and industry advisor at Circana, told an audience of journalists, tech workers, and enthusiasts. “I don’t have to share with the industry that sales have been down.”
But it wasn’t all doom and gloom. Circana took a glass-half-full approach, highlighting those tech products that did perform well and exploring what they could mean for the industry.
“The big heavyweight categories have seen some decline, but there are pockets of growth within this,” Gagnon said.
- Television sales, for example, dropped 9%, but TVs with 75-inch screens or larger increased nearly 20%. Sales of computers, meanwhile, were down 4%, but their average selling price (ASP) increased, which Gagnon said means “consumers are buying better, more expensive PCs this year than they did last year.”
- Other notable high performers included premium headphones and party speakers, and digital cameras, whose sales increased 72%.
Fewer new products: One reason more categories didn’t perform well was the relative lack of new products on shelves, according to Ben Arnold, executive director and analyst at Circana.
New products accounted for 12.6% of total tech items in 2023, down from 17.8% in 2021, according to Circana. Arnold added that more price-sensitive consumers—in particular, those making $50,000 or under—are “waiting for the innovation cycle to come back around for a refresh.”
The return of growth: Some of those refreshes will come in 2024, which is why Circana predicts that growth will return to the market in 2024—after first dipping around 1% in the first half as customers pay off debts built up during the holiday season.
“We think that the recovery starts in the second half of 2024, and it’s really down to key categories starting to enter a refresh cycle,” Gagnon said.