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New Wearables Forecast from IDC Shows Smartwatches Continuing Their Ascendance While Wristbands Face Flat Growth

The worldwide wearables market is forecast to ship 124.9 million units
by the end of 2018, up 8.2% from the prior year. Although this growth is
slightly lower than the 10.3% growth experienced in 2017, the market is
expected to return to double-digit growth from 2019 until 2022 as
smartwatches and other form factors grow in popularity, according to the
International Data Corporation (IDC)
Worldwide
Quarterly Wearable Device Tracker.

“The shift in consumer preferences towards smartwatches has been in full
swing these past few quarters and we expect that to continue in the
coming years,” said Jitesh
Ubrani senior research analyst for IDC Mobile
Device Trackers. “While Apple will undoubtedly lead in this
category, what bears watching is how Google and its partners move
forward. WearOS (formerly Android Wear) has been somewhat of a laggard
recently and despite expected changes to the OS and the release of new
silicon, we anticipate Android-based watches to be WearOS’ closest
competitor due to the high amount of customization available to vendors
and the lack of Google services in China.”

“Additionally, keep an eye on the other smartwatch platforms, including
Fitbit’s Fitbit OS, Garmin’s Connected IQ, and Samsung’s Tizen,” said Ramon
T. Llamas, research director for IDC’s Wearables
team. “Fitbit’s Versa has had a warm reception in the market, and
Garmin’s devices have had a steady presence for many quarters. Expect
both companies to dive deeper into health and fitness while exploring
new areas as well. Samsung, meanwhile, continues to make strides in the
commercial space, including health care and wearable workflows.”

Smartwatches will evolve to encompass far more features and
functionalities than they have today. “The smartwatches of 2022, even
2020, will make today’s smartwatches seem quaint,” added Llamas. “Health
and fitness is a strong start, but when you include cellular
connectivity, integration with other Internet of Things (IoT) devices
and systems, and how smartwatches can enable greater efficiencies, the
smartwatch market is heading for steady growth in the years to come.”

Beyond the typical wrist-worn devices, IDC also anticipates earwear to
gain momentum as various brands start to capitalize on the growing
interest in smart assistants. Qualcomm’s upcoming silicon designed for
this category is likely to also help bolster supply by offering brands a
platform solution to build their products. Clothing with built-in
sensors is also expected to grow and double its share by 2022.

Category Highlights

Smartwatches will gain an increasing amount of market share over
the course of the forecast, accounting for 44.6% of all wearables
shipped by the end of 2022. Apple’s decision to include cellular
connectivity on the latest Watch has helped bring some much-needed
attention to the smartwatch category from telcos and, more importantly,
it has helped with consumer acceptance. It’s only a matter of time
before other vendors (beyond those who have already dabbled with it)
begin to include this capability and consumers, along with developers,
take advantage of the tech to enable additional use cases.

Basic watches, which to date have been primarily comprised of
sport watches, kids’ watches, and hybrid watches, are forecast to see a
compound annual growth rate (CAGR) of 7.4% from 2018 – 2022. Though
these devices offer many advantages such as long battery life,
simplified interfaces, and highly fashion-forward designs, this category
will continue to remain in the shadow of smartwatches as its share
declines from 23.7% in 2018 to 19.7% in 2022. The entire category also
faces internal challenges as many sport watch and kids’ watch vendors
are focused on transitioning their user base to smartwatches in hopes of
increasing revenue.

The market for wristbands is expected to decline 6.6% in 2018 as
demand for these simple devices has cooled off and incumbents like
Fitbit and Garmin continue to pursue smartwatch growth instead. Beyond
2018, the category is expected remain largely flat with growth below 1%
in the following years. Meanwhile, average selling prices (ASPs) are
expected to drop below $50 by 2022.

Worldwide Wearables Forecast, Product Shipments, Market Share
and CAGR, 2018 and 2022(shipments in millions)

2018Shipments*

2018MarketShare*

2022Shipments*

2022MarketShare*

2018–2022CAGR

SmartwatchTotal

* Note: All figures represent forecast data.

In addition to the table above, a graphic illustrating IDC’s worldwide
forecast for basic and smart wearable devices is available by viewing this
press release on IDC.com.

About IDC TrackersIDC
Tracker products provide accurate and timely market size, vendor
share, and forecasts for hundreds of technology markets from more than
100 countries around the globe. Using proprietary tools and research
processes, IDC’s Trackers are updated on a semiannual, quarterly, and
monthly basis. Tracker results are delivered to clients in user-friendly
excel deliverables and on-line query tools.

For more information about IDC’s Worldwide Quarterly Mobile Phone
Tracker, please contact Kathy Nagamine at 650-350-6423 or knagamine@idc.com.

About IDCInternational Data Corporation (IDC) is the
premier global provider of market intelligence, advisory services, and
events for the information technology, telecommunications, and consumer
technology markets. With more than 1,100 analysts worldwide, IDC offers
global, regional, and local expertise on technology and industry
opportunities and trends in over 110 countries. IDC’s analysis and
insight helps IT professionals, business executives, and the investment
community to make fact-based technology decisions and to achieve their
key business objectives. Founded in 1964, IDC is a wholly-owned
subsidiary of International Data Group (IDG),
the world’s leading media, data and marketing services company that
activates and engages the most influential technology buyers. To learn
more about IDC, please visit www.idc.com.
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