U.S. Consumer Tech Sales to Flatline at $112 Billion in 2026: Inside Circana's CES Forecast

The consumer electronics industry faces a sobering reality in 2026: after years of pandemic-fueled growth, the American technology market is essentially flat-lining. According to new research from Circana released at CES 2026, U.S. consumer tech sales will grow just 0.2% this year to reach $112 billion—a near-standstill that masks profound shifts in who's buying and what they're purchasing.

The forecast, presented at the annual Consumer Electronics Show in Las Vegas, paints a picture of an industry navigating economic crosscurrents. While affluent consumers continue spending freely on premium devices, middle and lower-income households are pulling back sharply, creating what analysts describe as a "K-shaped" consumer electronics market.

The Great Consumer Divide

Perhaps the most striking finding in Circana's research is the widening gap between consumer segments. High-income households—those earning over $150,000 annually—are driving virtually all growth in premium categories like high-end laptops, OLED televisions, and smart home devices. Meanwhile, households earning under $75,000 are cutting technology spending for the second consecutive year.

"Late 2025 spending shows evidence of a split in consumer electronics spending patterns, with higher-income cohorts driving growth, but struggling to offset a pull-back by lower- and middle-income buyers."

— Paul Gagnon, VP and Technology Industry Advisor, Circana

This divergence has significant implications for manufacturers and retailers. Companies targeting the mass market face pricing pressure and declining volumes, while premium-focused brands are seeing healthier margins but limited overall growth potential.

Category Winners and Losers

Not all technology categories are created equal in Circana's forecast. Computers remain the primary growth driver, with notebooks and desktops expected to add more than $600 million in incremental revenue compared to 2025. The Windows 10 end-of-support deadline in October 2025 is spurring replacement purchases, while AI-enabled PCs are attracting early adopter interest.

Key category projections for 2026:

• Computers: +$600 million, driven by refresh cycle and Windows 10 sunset
• Tablets: +$200 million, iPad alternatives gaining share
• Smart glasses: Emerging category showing strong growth off small base
• Traditional TVs: Flat to declining as replacement cycles extend
• Smartphones: Modest growth, largely at premium price points
• Wearables: Mature market with slowing growth rates

The television market, long a bellwether for consumer electronics health, continues to struggle. Consumers are holding onto sets longer, and the transition to larger screen sizes has largely played out. Only premium OLED and Mini-LED models are seeing meaningful growth.

Price Increases Compound the Challenge

Adding to consumer headwinds, overall average prices for technology products will climb approximately 3% in 2026—matching the pace of 2025. While some of this reflects product mix shifting toward premium devices, organic cost increases are also playing a role.

Memory prices, in particular, are rising due to AI-driven demand for DRAM and flash storage. Components that go into everything from smartphones to game consoles are commanding higher prices as data center and AI applications compete for limited supply.

Tariff concerns loom as another potential price driver. While the current forecast assumes no major new tariff implementations, the possibility of additional trade restrictions could force manufacturers to raise prices further or absorb margin compression.

The 2025 Hangover

Circana's modest 2026 forecast follows what the firm projects was a 2.2% decline in consumer tech sales during 2025. The second half of the year proved particularly challenging, with holiday season demand falling short of expectations despite promotional activity.

Several factors contributed to the 2025 disappointment:

• Post-pandemic normalization: The surge in home office and entertainment spending has fully unwound
• Extended replacement cycles: Consumers are using devices longer before upgrading
• Competition for wallet share: Travel, dining, and experiences are winning discretionary dollars
• Credit constraints: Higher interest rates and Buy Now Pay Later balances weighing on purchasing power

CES Innovation vs. Consumer Reality

The Circana forecast creates an interesting contrast with the optimistic energy pervading CES 2026. The show floor is filled with AI-powered gadgets, foldable displays, and humanoid robots—products that promise to transform how we live and work. Yet the research suggests most consumers aren't ready to open their wallets for these innovations.

This disconnect between industry enthusiasm and consumer behavior isn't new. CES has long served as a showcase for technologies that take years to achieve mainstream adoption—if they ever do. The current AI wave may prove different, but early evidence suggests adoption curves will be gradual rather than explosive.

For manufacturers, the message is clear: innovation alone won't drive growth. Value propositions must resonate with consumers facing persistent inflation and uncertain economic conditions. Companies that can deliver meaningful utility improvements at accessible price points will fare better than those chasing premium positioning.

Regional and Demographic Variations

Circana's research reveals significant geographic variation in technology spending patterns. Coastal urban markets with high concentrations of tech workers and affluent professionals are outperforming, while heartland and rural areas show more pronounced weakness.

Age demographics also matter. Younger consumers, despite their reputation as digital natives, are showing more price sensitivity than older households. This reflects both income constraints (younger workers earn less on average) and different spending priorities, with experiences and social activities commanding larger budget shares.

What It Means for Investors

For investors in consumer electronics companies, Circana's forecast suggests a challenging environment for growth. Companies with diversified revenue streams—spanning enterprise, component supply, and consumer—may prove more resilient than pure-play consumer brands.

Specific investment implications include:

• Premium positioning matters: Companies serving affluent consumers face better conditions
• Cost discipline critical: Margin pressure from weak volumes requires operational efficiency
• AI differentiation: Products with genuine AI utility may command premium pricing
• Geographic diversification: International markets, particularly emerging economies, offer growth alternatives

The $112 billion U.S. consumer tech market remains substantial, but its near-zero growth trajectory suggests that industry participants must fight for share rather than ride rising tides. In this environment, execution and differentiation become paramount.

Looking Beyond 2026

Circana's researchers cautiously suggest that conditions could improve beyond 2026 if several factors align. Lower interest rates would ease credit constraints, potential resolution of tariff uncertainties could stabilize pricing, and meaningful AI applications could reignite upgrade cycles.

However, structural challenges—including longer device lifespans, mature penetration rates, and competition from other spending categories—suggest that the high-growth era of consumer electronics may be permanently behind us. The industry that once seemed capable of endless expansion is maturing into something more stable but less dynamic.

For consumers, the silver lining is clear: competition for constrained spending will force manufacturers to deliver better value. For investors and industry participants, the message is one of adaptation—finding growth niches in a market that has largely stopped growing.