Global sales of wearable devices are set to top 310 million units this year.
According to a new report from Gartner, sales will see a year-on-year increase of 16.7 per cent, to generate $30.5 billion of revenue. Of that, almost a third ($9.3 billion) will be from smartwatches.
The report goes on to say that by the end of the year, 41.5 million smartwatches will be sold. Looking ahead, they are on pace to account for the highest unit sales of all wearable device form factors from 2019 to 2021, aside from Bluetooth headsets. By 2021, there will be an estimated 81 million units, representing 16 per cent of total wearable device sales.
"Smartwatches are on pace to achieve the greatest revenue potential among all wearables through 2021, reaching $17.4 billion," said Angela McIntyre, research director at Gartner. Revenue from smartwatches is bolstered by relatively stable average selling prices (ASPs) of Apple Watch.
"The overall ASP of the smartwatch category will drop from $223.25 in 2017 to $214.99 in 2021 as higher volumes lead to slight reductions in manufacturing and component costs, but strong brands such as Apple and Fossil will keep pricing consistent with price bands of traditional watches," she added.
Unsurprisingly, Apple will continue to be the market leader. However, as more vendors enter the fray, the iPhone-maker’s share will decrease from approximately a third in 2016 to a quarter in 2021. It is expected that other brands such as Asus, Huawei, LG, Samsung and Sony will make up only 15 per cent of smartwatches in 2021, because their brands do not have as strong an appeal as lifestyle brands for personal technologies.
It is expected that kids’ smartwatches and traditional watch brands will emerge as significant segments for smartwatches. Gartner expects kids’ smartwatches to represent 30 per cent of total smartwatch unit shipments in 2021. These devices are targeted at children in the two to 13 year-old range, before parents provide them with a smartphone.
The other sub-category, which will account for 25 per cent of smartwatch units by 2021, is fashion and traditional watch brands. "Luxury and fashion watch brands will offer smartwatches in an attempt to attract younger customers," said McIntyre.
Finally, products from startups and while-label brands, such as Archos, Cogito, Compal, Martian, Omate or Quanta, will account for 5 per cent of smartwatch unit sales in 2021.
Source: Gartner (August 2017)