The pace of change in consumer electronics is break-neck. Technology labeled “emerging” last year may very well be fully matured already—or it could be labeled a bust and be deemed “the next 3D TV.”
In all honesty, it’s tough writing about any of the consumer tech markets you’ll see in the next few pages and labeling them as emerging. Virtual reality, augmented reality, drones, smart home tech, 3D printing, robotics, wearables, and even voice control have all been in the consumer lexicon for what feels like years now. But while they’ve been present at multiple CES events now, these tech markets are still the newest markets we have the opportunity to look at up close.
What makes them “emerging” markets still to this day is the simple fact that we’re still seeing so much innovation in each and every one. Even wearables, which have been beaten and battered in the press over the past few months, continue to evolve with each and every press release that rolls across our desks. Then you have a space like voice control that truly is emerging. Since the introduction of our dear friend Siri in 2011, digital voice assistants have evolved into many different forms, most notably as the hub of the smart home with services like Amazon’s Alexa. And that’s surely just the beginning for that space.
While it might be tough to predict something as simple as what the technology in these markets might look like in the next few years, analysts have been hard at work trying to peg the net worth of each.
Dealerscope pulled data from a number of different sources to try to help make some sense out of all of the different numbers floating around out there. So, let’s get to it.
Alexa, turn the page.
One of the biggest trends we noticed in this space during our time at CES 2017 was the seismic shift towards more economically-sized and consumer-grade options. (Read: smaller and more affordable). 3D printing is shaping up to experience some of its fastest growth over the next three to five years as those products get into stores and into consumers’ homes.
This might be the toughest market to track, though, as there are countless variations out there in terms of the types of materials that can be used, how they’re used, what defines a desktop 3D printer, and so on.
“While desktop 3D printers were earlier used by hobbyists or for limited use in the education sector, these printers are increasingly finding applications in diverse industries such as engineering, product design, art, jewelry, dentistry, and consumer products,” Mark Cotteleer, Research Director, Deloitte Services LP, said in a recent analysis of the space.
$435 million Expected value of the 3D printing market by 2020, according to CTA
707k Units estimated sold in 2020, according to CTA
For our purposes here, we looked into the home-helper robots—things like robotic vacuum cleaners and floor washers, rather than robotic toys, which is a whole separate conversation. Products you’d find here include anything that might come down from a company like Dyson or the Roomba by iRobot.
Major manufacturers did tout their future robotic products, but very few appeared to be commercially ready—LG, for example, had their Airport Robot and a smaller Airbot smart home hub robot at CES 2017; the Airport bot should roll out later this year, but the company shared no info about pricing or availability on the smaller in-home model.
That said, the space is primed to take off as these companies look to expand past the basic vacuum cleaner and into the smart home robotics space. Whereas CTA projects the market to reach $528 million with 1.8 million units sold by 2020, we’ve seen much more bullish predictions for this space.
$2.5 billion Markets and Markets prediction for value of home/cleaning robot market by 2020
20 million Home robots sold by 2020, according to Tractica
VR and AR
We’ve been notoriously harsh on the VR market. That’s not to say we think it’s a failing market, but it has had a very tough time gaining the widespread adoption among consumers that industry analysts had predicted in years past. Consumers aren’t going to commit the amount of money needed to jump into this market. Prices need to come down, and the hardware needs to evolve in some way that makes it less clunky to use.
“Most early adopters have bought in already,” market research firm SuperData Research said in an email to Dealerscope. “A minority of those considering it may purchase one for themselves but … [the] specs required are complex and the purchase would be difficult to navigate if you are not an enthusiast.”
AR, on the other hand, isn’t getting as much attention but is a market worth paying attention to. The failure of Google Glass hurt the market’s reputation a few years back, but then Pokémon Go burst onto the scene last summer and people suddenly remembered how awesome (and addicting) this technology can be.
CTA expects this market to see $848 million in revenue by 2020 with 4.7 million headsets sold. That’s just one piece of the puzzle, though. This space includes much more that just headsets. Software sales matter, new PC sales should be accounted for, and other peripherals will pop up over time as well.
One very-promising trend to note: VR and AR app downloads have skyrocketed over the past year, which could translate into more consumers buying into this market.
$162 billion Global AR/VR market reach by 2020, according to IDC—that represents a compound annual growth rate of more than 181 percent
>50 percent IDC predicts more than half of the global market reach will come from VR and AR hardware sales
Perhaps the most controversial emerging tech on our list, drones have enormous value on the commercial and entertainment side of things, but as far as consumer-grade drones are concerned, we’re seeing issues of privacy arise. Every other week it seems we hear about some angry neighbor shooting a drone out of the sky because they think someone’s spying on them.
Privacy issues aside, federal drone policies—namely having to register drones, and possibly get licensed to fly drones—could impact overall sales in the next few years. But analyses we’ve come across didn’t let these outside forces impact their predictions for the market. In fact, several sources point to the growing popularity of drone racing events and professional drone racing leagues as reason to believe the market could experience even greater growth than they’d expected.
“We hope to follow the growth trajectory of eSports,” Drone Racing League founder Nick Horbaczewski said in a recent interview with research firm PSFK. “But it’s still early. With exciting new things like drone racing, it’s very easy to hype them up. If you promise something or say something’s going to be amazing, you really have to deliver it.”
$1.6 billion Expected consumer drone market revenue by 2020, via CTA
5.7 million Estimated number of consumer drone units sold in 2020, according to CTA
Good luck finding any solid numbers on this market, because they truly are all over the place. The smart home could constitute anything from smart appliances, to robots, to security products, to lighting and shading, and that would cover only about half of what the next forecast includes. Others might have smart HVAC and energy management products folded in there. Even more might include smart TVs and network connectivity products.
For its purposes, CTA projects the smart home market will reach $6 billion dollars by 2020 with 53 million units sold. That’s likely on the very low end, at least according to some of the other forecasts out there.
One by Grand View Research, though, has the market reaching $47.61 billion by the same year. And another by Markets and Markets has the figure at $121.73 billion by 2022.
What’s clear is that we haven’t even begun to see the smart home market mature. Despite how long some of this technology has been around—look at a company like Nest Labs, for example, which was founded in 2010—we’re still in the early adoption phase. And the adoption of smart home technology is only going to explode as better network connectivity rolls out with the introduction of 5G in the next few years, and as new products that haven’t even been conceptualized yet get pumped out into the market.
Helping the market along? Major players like Comcast have started to latch onto this space, which could up the pace of innovation.
Our guess here is that the higher-end projections will likely end up panning out for this fast-expanding space.
$121.7 billion Expected smart home market value by 2022, according to Markets and Markets
25 billion Number of IoT-connected devices in use by 2020, according to Gartner Research
Though it’s struggled to maintain growth over the past year or so, the wearables market could be set for a rebound in the next few years. Companies like Fitbit and Fossil have had a tough go of it, getting consumers to strap their connected fitness trackers and smartwatches on their wrists, but this might only be a sign from consumers that the space needs to evolve a little.
By 2020, the term wearables will refer to far more than a product that you see wrapped around someone’s wrist—and we’ve already noticed this trend at the last few CES events. More and more, wearables refer to products ranging from a fitness shirt, to shoes, to eyewear, and more.
“Unlike the smartphone, which consolidated multiple technologies into one device, the wearables market is a collection of disparate devices,” Jitesh Ubrani, senior research analyst for IDC Mobile Device Trackers, said in a statement. “Watches and bands are and always will be popular, but the market will clearly benefit from the emergence of additional form factors, like clothing and eyewear, that will deliver new capabilities and experiences.
CTA’s wearables forecast for 2020 is a bit modest with the market reaching $6.9 billion and 68 million units sold. Others we’ve seen have the space performing a little better.
213.6 million Units sold worldwide by 2020, according to IDC
52 percent Wearables market share of smartwatches by 2020, up from 40 percent in 2015
Digital Voice Assistants
A market that could be folded into the smart home category, digital voice assistants have struck a chord in the consumer tech industry, both with the consumer and with analysts—all thanks to the success of Amazon’s Alexa Voice Assistant.
Until we met Alexa, consumers basically knew of (and loathed) Siri and Google’s voice search. But as Apple and Google realized the success of Alexa, the services have evolved to try to recreate some of that magic on their own platforms. And then there’s Windows with Cortana…
The market, at this point, really boils down to two main products: the Echo by Amazon and Google Home. There are plenty of variations out there, but this is really it. Siri only exists on the iPhone. Cortana can’t live without the Windows platform. And everything else is just a third-party product trying to be the next Alexa—or they’re actually using Alexa.
“This technology is an excellent case study about the remarkable pace of innovation. We’ve made more progress in voice-recognition in the last 30 months than in the first 30 years,” CTA Chief Economist Shawn DuBravac wrote in a column for Dealerscope. “Voice is poised to propel a number of categories forward. We are already seeing smart home devices gain popularity, and this year, the U.S. adoption of this technology is expected to accelerate further, as consumers find more items than ever on store shelves.”
Expect voice to be one of the fastest growing markets in the consumer tech industry.
11.5 percent Estimated share of U.S. households (that’s roughly 13.9 million) with a voice-activated digital assistant, up from 2 percent in 2016, according to Strategy Analytics
15.1 million Number of annual voice assistant device shipments by 2020[“Source-dealerscope”]