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Consumer Tech Sales to Hit $505B in 2022, CES Owner Forecasts

The Consumer Technology Association offers a favorable look in areas from 5G to streaming services, but warns of the chip shortage and other supply chain challenges.

The U.S. consumer technology industry is projected to generate a record $505 billion in retail sales revenue this year, according to a forecast from the Consumer Technology Association, owner and producer of the CES Show. Despite reports of a string of companies from Microsoft to Lenovo canceling in-person plans in recent weeks due to the omicron surge, the 2022 CES in Las Vegas is forging ahead with both an in-person and virtual component, and as is typical, that begins with preshow announcements and press conferences before the exhibition, which opens on Wednesday.

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CTA’s optimistic sales forecast suggests that potentially record sales this year could be driven by demand for smartphones, automotive tech, health devices and streaming services. Spending on streaming services and software amid this pandemic is expected to reach $130 billion in 2022, up 6 percent over 2021, according to CTA’s projections. Breaking that down, CTA reported that this includes an expected $47 billion on video streaming services; $12.9 billion for streaming services that offer music, audiobooks and podcasts; and $53.6 billion for gaming software, downloads and services.

These projections were outlined by CTA vp research Steve Koenig, who, during a preshow presentation, emphasized the importance of developments involving Artificial Intelligence and 5G, calling the latter the “connective tissue” for innovation. He reported that more wireless technical standards are scheduled to be published in the spring, making 5G “the first wireless generation that will be led by the enterprise and not consumer” with expected growth in all sorts of cloud-based services.

Looking ahead, he also addressed the concept of the Metaverse, which he defined as “the next generation of the internet that will convey increasingly immersive digital experiences [that] over time — and I’m talking like over the next 10, 20 years — will become inextricably linked to our physical reality.” Koenig asserted that the “Metaverse is closer than you think,” citing “building blocks” for such experiences that are present in the industry, including 5D, cloud, haptics and volumetric video.

During his presentation, Koenig also warned that the consumer tech business would continue to be impacted by broad supply chain challenges and in particular the microchip shortage. Of the chip shortage, Koenig noted that in the short term, efforts in place to “squeeze out more production volume from existing facilities” as well as add to existing facilities, “maybe a new production line.”

But he concluded that what’s needed is more chip-making facilities. “It’s gonna take time to build these facilities,” Koenig admitted, looking toward the middle of the decade. “We’ll have a greater geodiversity of semiconductor manufacturing facilities, which is desperately needed because today about three-quarters of chip-making is attributable to East Asia. So what am I saying? I’m saying we’re potentially one typhoon or earthquake away from a major disruption in chip-making for the world.”

On Dec. 31, CES announced that the in-person event with an expected 2,200 exhibitors would close on Friday, one day earlier than originally scheduled, along with additional COVID-19 safety protocols.

This article was originally published by The Hollywood Reporter.