Home Automation Products Expected to Add $1.8B Incremental Sales Through 2018

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The largest infuser of new consumer electronics sales, according to NPD forecast

Digital assistants will claim a major piece of the consumer market in 2018, and in doing so will drive adoption of compatible devices and solutions.

According to The Future of Tech report from global information company, The NPD Group, home automation products will add $1.8B of new consumer electronics sales through 2018 [1]. The Future of Tech report forecasts 74 percent growth in the home automation category from 2016 to 2018, driven by sales of security & monitoring products, as well as growth in power & sensors.

“Awareness and interest are starting to build significantly for smart home products, with Alexa and Google Home catalyzing growth,” stated Stephen Baker, vice president, industry analyst for The NPD Group. “Digital assistants will claim a major piece of the consumer market in 2018, and in doing so will drive adoption of compatible devices and solutions.”

According to the report, emerging categories, such as virtual & augmented reality (VR/AR) and drones, will also be key contributors to new consumer electronics sales. Virtual reality is currently leading expansion of the VR/AR segment, with early use cases focused on making gaming, photos, and videos more immersive. NPD expects VR/AR sales in 2018 to be nearly four times higher than 2016 sales, while drone sales will double over the same time frame. Drone sales will be bolstered by the hobby category (priced above $200), for which there is a balance of strong demand and relatively high average sale prices.

Innovation in mainstream categories, such as headphones and PCs, will contribute to sales growth as well. Headphones are expected to see year-over-year growth through 2018, with in-ear wireless headphones leading the category.

“Multiple use cases and form factors are contributing to growth in headphones, as consumers may make multiple category purchases,” said Ben Arnold, executive director, industry analyst. “A midmarket in-ear set may be perfect for trips to the gym, but may fall short of audiophiles’ at-home ideal.”

The Future of Tech report is a 24-month tech industry forecast with analysis and insights that cover over 200 technology categories [2]. To show what lies ahead, this report combines point-of-sale data, consumer information, and industry expertise to help companies across the industry maximize their potential.

[1] Reached by comparing anticipated 2017-2018 revenue vs. on-record 2015-2016 performance, in order to establish incremental dollars coming to a category.

[2] Based on forecasted sales of technology products captured in The NPD Group Retail Tracking Service point-of-sale data. This does not include mobile phones or Amazon-branded products.

About The NPD Group, Inc.
The NPD Group provides market information and business solutions that drive better decision-making and better results. The world’s leading brands rely on us to help them get the right products in the right places for the right people. Practice areas include apparel, appliances, automotive, beauty, consumer electronics, diamonds, e-commerce, entertainment, fashion accessories, food consumption, foodservice, footwear, home, mobile, office supplies, retail, sports, technology, toys, video games, and watches / jewelry. For more information, visit npd.com and npdgroupblog.com. Follow us on Twitter: @npdgroup and @npdtech.

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Megan Scott
The NPD Group
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