The broader adoption of the Internet of things (IoT) and enthusiasm for emerging technology will drive the American consumer technology industry to $286.6 billion in retail revenues in 2016.
According to figures released by the Consumer Technology Association (CTA), sales of burgeoning tech products, such as wearables, smart home devices and drones, will deliver an increase of 1.3 percent from last year's industry revenues.
"We have only just scratched the surface of what IoT will become. IoT is a loose paradigm of physical objects becoming digitized, sensorized and connected," Shawn DuBravac, chief economist for the CTA, told eWEEK. "But what generally happens, is that once these objects are connected, they fall into other categories. Connected door locks become part of the smart home. Connected sports equipment becomes part of connected fitness. It's the everyday things that will undergo the most pronounced changes. IoT is emerging everywhere around the consumer."
CTA projects unit shipments will reach 183 million in 2016, while revenues will reach $55 billion.
The report indicated that as tremendous innovations in smartphone hardware over the past few years have lengthened the replacement cycle, 2017 will be the first year smartphones see a slight decline in unit sales and revenue.
"The future of smartphones is dynamic. Smartphones are expected to grow by 5 percent on a unit sales basis for 2016 before dropping 2 percent year-over-year in 2017," DuBravac said. "This will mark the first of year-over-year smartphone unit decline in the U.S. Low, single-digit unit declines are expected through 2020, although any new breakthroughs in smartphone design or performance could reverse that trend, even if temporarily."
However, that this isn't cause to panic, but rather, it's an indication of opportunity and growth as consumers turn to a broader array of devices to redefine how we live, he said.
"The smartphone will remain an important complement and component of this future," he explained.
DuBravac also noted growth in wearables is coming primarily from devices with health and fitness benefits.
Fitness activity trackers are expected to hit 28 million units in 2016, an increase of 60 percent, with revenues reaching $2.2 billion, a 62 percent increase.
Even smartwatch vendors are beginning to emphasize health features more, and niche fitness devices are coming to market that integrate smart fabrics, UV monitoring, heart condition monitoring and more.
"Moving beyond the next 12 months, wearables will be an important growth market for the tech industry as it expands into entirely new categories," he said.