What's Driving the Wearables Market?December 14, 2016
According to International Data Corporation (IDC), a premier market research, analysis, and advisory firm, the global shipments of wearable devices are anticipated to experience a growth of 29.0% over 2015, touching 101.9 million units by the end of 2016.
As forecasted by IDC, the compound annual growth rate (CAGR) for wearable devices is foreseen at 20.3%, totaling to almost 213.6 million units to be shipped by 2020.
"Unlike the smartphone, which consolidated multiple technologies into one device, the wearables market is a collection of disparate devices," explains Jitesh Ubrani, senior research analyst for IDC Mobile Device Trackers. "Watches and bands are and always will be popular, but the market will clearly benefit from the emergence of additional form factors, like clothing and eyewear, that will deliver new capabilities and experiences. Eyewear has a clear focus on the enterprise as it stands to complement or replace existing computing devices, particularly for workers in the field or on the factory floor. Meanwhile, clothing will take aim at the consumer, offering the ability to capture new forms of descriptive and prescriptive data."
Another recent study by global market research firm, Mintel reveals that consumer interest in wearables is booming and pushing the market for wearables towards growth. According to the study, one in five consumers are interested in wearables that include smartwatch features (19%). The number also includes 10% of those who would find it convenient to use a watch as a credit card and another 10% who would prefer using a watch as a remote control. This suggests that consumers now perceive smartwatches as something more than just a second screen for their smartphones. Also, the ownership of smartwatches is poised for growth with one out of five consumers willing to put their money on the latest technology.
Industry Highlights, Product Categories, and Market Forecasts for Wearable Devices
Smartwatch: The most familiar merchandise in the wearable domain, smartwatches are presumed to expand from 41.0% in 2016 to 52.1% of the entire wearable shipments in 2020. Popularized by leading players like Apple, Google, Motorola, Samsung, and others, smartwatches will be trending for quite some time with fashion and fitness brands such as Fossil, Fitbit, and Withings expected to propel its growth in the coming years.
Eyewear: Microsoft's recent revelation of Windows Holographic, along with Google's competitive Android platform and other innovative hardware solutions are expected to drive the market for eyewear in future years. While this class of wearables will only account for about 10% of the shipments in 2020, it will still be the industry's most lucrative category making for more than 40% of the total revenue due to its expensive price tag and specialized application areas.
Medical Devices: According to estimated figures stated in a report published by Grand View Research, the market for wearable medical devices will attain a valuation of $27.8 billion by 2022. Rising health concerns like obesity and hypertension, in addition to increasing degrees of chronic conditions such as blood pressure and diabetes, which require round-the-clock monitoring, will move the demand for wearable technology in the medical space.
Smart Clothing: All eyes are on this upcoming wearable segment, as popular fashion brands race to tie up with leading tech companies to produce smarter clothing. Just when fashion-tech is beginning to gain traction in the consumer market, tech giants jostle to make their presence felt in this emerging category that promises to contain 7.3% of the wearable market share by 2020.
"The trajectory of the wearables market signals a strong opportunity for developers," said Ramon T. Llamas, research manager for IDC's Wearables program. "Applications increase the value and utility of a wearable, and users want to see more than just their health and fitness results. News, weather, sports, social media and Internet of Things (IoT) applications will all have a place on a wearable. And, when combined with cellular connectivity, users will not have to take out their smartphones to get the latest information. All they will need to do is glance at their wearable."