The growing desire for smarter and more sophisticated products has caused a tremendous upheaval in the consumer electronics sector over the past several years. The market is continually changing as a result of the rapid advancement of technology, and organizations must stay current to stay competitive.
Here is a look at the key trends influencing the consumer electronics industry in 2023 and beyond, based on fresh insights from the most recent market research reports.
1. Increasing Demand for Consumer Electronics
In recent years, the consumer electronics industry has experienced growing demand, and that trend is expected to continue.
“The past five years have been characterized by growth in emerging markets and the introduction of new products, leading to more people buying consumer electronics,” according to IBISWorld’s report on global consumer electronics manufacturing. “Innovative products, falling prices, growing household incomes, and rising consumer sentiment have supported demand for consumer electronics.”
Looking ahead, analysts at IBISWorld predict the consumer electronics market will be driven by increasing income levels, growing demand in emerging economies, and a “relatively low level of market penetration for many consumer electronic products.”
This growth story is echoed by other market research firms. Euromonitor International predicts that global retail value sales will attain a 4% compound annual growth rate (CAGR) over the next five years.
2. The Rise of the Internet of Things
Another significant trend in the electronics industry is the rise of the Internet of Things (IoT). IoT refers to the interconnected network of devices, appliances, and systems that communicate with each other to perform a wide range of tasks. With the proliferation of smart devices, IoT has become an integral part of everyday life, and businesses are increasingly leveraging this technology to create new products and services.
One example of this trend is smart home automation systems. Companies like Google and Amazon have created smart speakers, which use voice commands to control various devices in the home, such as lighting, temperature, and security systems. This technology has not only made tasks more convenient but has also improved energy efficiency and security within homes.
The IoT market as a whole was an estimated $1.3 trillion in 2022 and is projected to reach $3.3 trillion by 2030, rising at a CAGR of 12.4%, according to a report by Global Industry Analysts. A variety of companies develop products and services related to IoT. Global Industry Analysts identifies 368 select competitors in its report, including Honeywell International, IBM, General Electric Company, and many others.
3. Opportunities Related to Artificial Intelligence
A closely related trend to IoT is the rise of artificial intelligence. AI technology has become increasingly sophisticated in recent years, and businesses are using it to create smarter devices that offer more personalized experiences.
“AI is poised to have a high impact on the demand-driven consumer electronics industry,” according to the Frost & Sullivan report Opportunities Assessment of Artificial Intelligence in Consumer Electronics. “Tier-1 OEMs such as LG Electronics, Samsung Electronics, and Whirlpool Corporation have developed AI-enabled consumer electronics products leveraging enhanced user experience.”
Many products and services benefit from developments in AI, including mobile devices, wearable sensors, smart home appliances, and virtual personal assistants. One way AI can give companies a competitive advantage is by helping them create a hyper-personalized experience for the customer. For example, smart TVs make use of AI to suggest movies and TV shows based on your viewing habits, while smartwatches can help you monitor your health and get personalized wellness advice based on your behavior and activities.
4. Potential of Augmented Reality and Virtual Reality
An additional trend to highlight is advancements related to virtual reality (VR) and augmented reality (AR). Big players like Meta, Google, and Apple are all competing to create new products that could revolutionize the way people interact.
The 2023 Consumer Electronics Show (CES) publicized a variety of products leveraging these technologies, including VR headsets that allow you to play immersive video games, socialize and visit new worlds and social spaces, simply watch videos, or participate in virtual meetings.
Apple is expected to soon release an augmented reality headset, also described as “interactive goggles,” but has grappled with internal skepticism and the challenges of launching a new product in a market where other major players have struggled to gain traction. Priced around $3,000, the device is designed primarily for videoconferencing, engaging with other avatars in a virtual world, or as a tool for artists and engineers.
While these technologies are still a work in progress, analysts at Technavio are optimistic about market growth. According to their estimates, the global augmented reality and virtual reality market is expected to accelerate at a CAGR of 52.37% from 2023 to 2027.
5. Importance of Sustainability
Technological advancements related to IoT, AI, and AR and VR will help shape the future of the consumer electronics industry, but another key factor to watch is the push for greater sustainability. With growing concerns over climate change and environmental degradation, businesses are taking steps to reduce their environmental impact.
“A slate of environmental-related regulations in the EU on repairability, energy efficiency, recyclability and even microplastics have been enacted over the past years,” explains Euromonitor in the 2023 report Environmental Sustainability Initiatives in Consumer Appliances. “Companies who want to continue selling in the EU need to comply with these regulations.”
Increasing sustainability is not only a result of government regulations, but it’s also seen as an opportunity to appeal to investors and partners who are concerned about ESG positioning and as a broader marketing and PR play.
“Sustainability is increasingly being viewed as a competitive advantage rather than a cost,” according to Euromonitor.