Home Automation Sales to Skyrocket

By Susan Pechman
Published on: June 16, 2017

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The NPD Group just released our The Future of Tech report that announces that home automation products will add $1.8B of new consumer electronics sales through 20181The Future of Tech report forecasts 74 percent growth in the home automation category from 2016 to 2018, driven by sales of security and monitoring products, as well as growth in power and sensors. This will be the largest infuser of new consumer electronics sales.

I sat down with Stephen Baker, vice president, industry analyst for The NPD Group.

Susan Pechman: First of all, explain to our readers what the Future of Tech report is all about.

Stephen Baker: The Future of Tech report is a 24-month tech industry forecast with analysis and insights that cover over 200 technology categories2. To show what lays ahead, this report combines point-of-sale data, consumer information, and industry expertise to help companies across the industry maximize their potential.

SP: Stephen, what’s behind this category growth we’re reporting on?

SB: Awareness and interest are starting to build significantly for smart home products, with Alexa and Google Home catalyzing growth. 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.

SP: 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. Tell me more about this segment.

SB: Virtual reality is currently leading the 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.

SP: The report also highlights innovation in mainstream categories, such as headphones and PCs, which will contribute to sales growth as well. Can you talk about that?

SB: 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. A mid-market in-ear set may be perfect for trips to the gym, but may fall short of audiophiles’ at-home ideal.

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

2Based on forcasted 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.

Susan Pechman

Susan Pechman

Susan has served as chief marketing officer of The NPD Group, a leading global provider of market information and business solutions, since 2001. Previously she was founder and general manager of Cone Interactive in NYC, a highly regarded marketing and public relations practice in Silicon Alley.

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