The Consumer Technology Association (CTA) forecasts 2026 consumer tech revenue to reach $565 billion, anticipating robust growth of approximately 3.7 % year-over-year in the U.S. consumer technology industry despite ongoing tariff pressures, economic uncertainty and shifting supply conditions as revealed in its 2026 forecast released ahead of CES 2026.
The outlook presented during CTA’s Tech Trends to Watch event in Las Vegas underscores the sector’s resilience as companies navigate economic headwinds while consumers continue investing in technology that enhances connectivity, productivity and quality of life.
A Resilient Industry in a Complex Economic Environment
The CTA forecast paints a picture of an industry that is adapting rather than retreating in the face of macroeconomic headwinds. While global trade dynamics and tariff-related cost pressures have introduced uncertainty—particularly for hardware manufacturers—the overall consumer technology market continues to expand.
CTA leaders emphasized that technology has become deeply embedded in everyday life, making it more resilient to economic cycles than in previous decades. Consumers may be more selective in their purchasing decisions, but they continue to prioritize products and services that offer convenience, efficiency, and long-term value.
According to CTA, this steady growth reflects not only consumer demand but also the industry’s ability to innovate, adjust pricing models, and introduce services that complement traditional hardware sales.
Revenue Growth Driven by Software, Services, and Premium Experiences
One of the most notable aspects of CTA’s 2026 forecast is the changing composition of consumer technology revenue. While hardware remains a substantial contributor, software and services are expected to play an increasingly significant role.
CTA projects that software and services revenue will grow by approximately 4.2 percent, reaching close to $194 billion in 2026. This growth outpaces hardware expansion and underscores the shift toward recurring revenue models, subscriptions, and value-added digital experiences.
Consumers are increasingly drawn to technology ecosystems rather than standalone products. Streaming services, cloud-based applications, smart home platforms, and AI-powered tools offer ongoing functionality that extends beyond the initial purchase, making them attractive even in uncertain economic conditions.
Hardware Growth Remains Steady, Not Explosive
Hardware revenue is forecast to grow by about 3.4 percent in 2026, signaling steady—but more measured—expansion compared to previous boom cycles. Unit shipments across major categories are expected to increase by just 0.7 percent, reflecting a maturing market where replacement cycles are lengthening.
Rather than buying more devices, consumers are choosing better devices. Premium features, enhanced performance, energy efficiency, and seamless integration with digital services are increasingly influencing purchasing decisions.
This trend benefits manufacturers that can differentiate through innovation, design, and ecosystem compatibility, even as overall unit volumes grow more slowly.
Changing Consumer Buying Behavior
CTA’s forecast highlights a fundamental shift in how consumers evaluate technology purchases. Instead of focusing solely on upfront costs, buyers are increasingly considering long-term value, ongoing updates, and the broader experience a product delivers.
Flexible financing options, trade-in programs, and subscription bundles are helping sustain demand, particularly for higher-priced devices. Consumers are also more willing to invest in technology that supports productivity, remote work, health monitoring, and home automation.
This evolution in buying behavior has encouraged companies to rethink their go-to-market strategies, placing greater emphasis on services, customer retention, and post-purchase engagement.
Tariffs and Cost Pressures Remain a Challenge
While the overall outlook is positive, CTA cautions that the industry continues to face headwinds from tariffs and cost increases tied to global trade policies. These pressures have uneven effects across the market, with smaller and mid-sized companies often experiencing tighter margins than larger, more diversified players.
Supply chain complexity and regional manufacturing shifts have added to operational costs, prompting some companies to adjust pricing or delay product launches. However, CTA notes that many firms have demonstrated adaptability by diversifying suppliers, investing in logistics efficiency, and optimizing product portfolios.
Despite these challenges, the forecast indicates that the industry’s growth trajectory remains intact, supported by sustained consumer demand and innovation.
Consumer Commitment to Technology Spending
CTA leadership emphasized that technology has moved from discretionary spending to a core household and business necessity. Devices and services that support communication, entertainment, security, education, and work are now seen as essential rather than optional.
Gary Shapiro, Executive Chair and CEO of CTA, highlighted that even in times of economic pressure, consumers continue to invest in technology that enhances their quality of life and productivity. This commitment has helped stabilize the market and maintain growth momentum heading into 2026.
The forecast suggests that while consumers may delay upgrades or seek better value, they are unlikely to disengage from technology altogether.
CES 2026 Sets the Stage for Innovation
The $565 billion revenue projection provides an optimistic backdrop for CES 2026, where global technology leaders will gather to showcase innovations and explore emerging trends. CTA’s “Tech Trends to Watch” series offers insight into the forces shaping the next phase of industry growth.
Among the most influential trends highlighted are:
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Artificial intelligence and intelligent transformation, as AI becomes embedded across consumer devices and services
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Digital health and longevity technologies, supporting wellness, prevention, and aging populations
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Mobility and transportation innovation, including electric and connected vehicles
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Energy management and sustainability, driven by smart home and grid technologies
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Engineering and manufacturing advancements, improving efficiency and resilience
These themes reflect the industry’s shift toward solutions that address real-world challenges rather than novelty alone.
AI as a Key Growth Catalyst
Artificial intelligence continues to emerge as a major driver of consumer technology value. From smart assistants and personalized content to predictive maintenance and adaptive interfaces, AI is reshaping how consumers interact with devices and services.
CTA notes that AI-enabled features are increasingly influencing purchasing decisions, particularly when they deliver tangible benefits such as time savings, energy efficiency, or improved health outcomes.
As AI capabilities expand, they are expected to further blur the lines between hardware, software, and services, reinforcing the integrated ecosystems that support long-term revenue growth.
The Expanding Role of Connected Ecosystems
Another important trend underlying CTA’s forecast is the growth of connected ecosystems. Consumers are no longer buying isolated devices; they are investing in networks of products that work together seamlessly.
Smart homes, connected vehicles, wearable health devices, and cloud-based platforms all contribute to this ecosystem-driven approach. Companies that can deliver interoperability, security, and ease of use are well-positioned to capture greater share of consumer spending.
This ecosystem focus also strengthens customer loyalty, as switching costs increase when multiple devices and services are interconnected.
Implications for Tech Companies
For technology companies, CTA’s forecast underscores the importance of strategic flexibility. Success in 2026 and beyond will depend on the ability to balance hardware innovation with service expansion, manage costs amid external pressures, and respond to evolving consumer expectations.
Firms that invest in software, AI, and customer experience are likely to outperform those that rely solely on unit volume growth. The forecast also highlights the value of global resilience, as supply chain adaptability becomes a competitive advantage.
What the Forecast Means for Investors and Policymakers
From an investment perspective, the projected $565 billion market size reinforces the consumer technology sector’s role as a key driver of economic activity. Steady growth, even amid uncertainty, signals a level of stability that can support long-term investment strategies.
For policymakers, CTA’s outlook highlights the importance of trade policies, regulatory clarity, and innovation-friendly environments. Reducing unnecessary barriers and supporting domestic innovation could further strengthen the industry’s growth potential.
Looking Ahead to 2026 and Beyond
As the consumer technology industry moves into 2026, CTA’s forecast reflects a market that is evolving rather than slowing. Growth may be more measured than during past surges, but it is also more diversified, resilient, and rooted in everyday necessity.
The projected $565 billion in revenue underscores the enduring importance of technology in modern life—from how people connect and work to how they manage health, energy, and entertainment.
With CES 2026 serving as a global showcase for innovation, the industry appears well-positioned to continue delivering value, adapting to economic realities, and shaping the future of consumer experiences through technology.
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