Critical Year Ahead for Smartwatches as Big Brands Join the Party


CCS Insight's latest wearables forecast predicts 60 million smartwatches and 44 million fitness trackers to be sold in 2018.

Apple Watch continues to dominate the smartwatch segment, and is expected to take more than 50 percent of a $7.9 billion market in 2017. The arrival of a cellular-enabled Apple Watch would further consolidate its position.

China accounts for the biggest volume of connected devices, largely thanks to sales of child-trackers, which are expected to hit 20 million there in 2018.

Weakness in the North American market for fitness trackers contributed to Fitbit's woes in 2017. Global market growth is expected to return in 2018 but at a slower rate, with lower average prices and new categories such as smart footwear.

London, 30 August 2017: In the latest update to its forecast for smart wearable devices, CCS Insight confirms the dominant position held by the Apple Watch. The device, which CCS Insight estimates will sell 14 million units in 2017, has exceeded expectations and is anticipated to take more than 50 percent of a $7.9 billion market this year. The device's appeal is set to lift the overall value of the smartwatch market in 2018, when a total of 60 million smartwatches are predicted to be sold.

CCS Insight's wearables analyst, George Jijiashvili comments, "The Apple Watch Series 2 is clearly a big hit with consumers. The addition of enhanced fitness tracking capabilities and waterproofing has given it a huge boost. Apple stands head and shoulders above its smartwatch rivals and the much-anticipated introduction of a cellular-enabled version would only propel it to greater heights".

However, 2017 is proving to be a critical year for the broader smartwatch market as major watchmakers unleash full-touch models. They are led by Fossil (which licenses brands such as Michael Kors and Diesel) and include names such as Guess, Hugo Boss, Louis Vuitton, Montblanc, TAG Heuer, Movado and Tommy Hilfiger. Reflecting this rash of new devices, CCS Insight's forecast predicts that Google's Android Wear operating system will take 21 percent of the advanced full-touch smartwatch market in 2017, up from 14 percent in 2016.

Jijiashvili notes, "We believe established watch brands using Google's Android Wear have a much better chance of energising the smartwatch market than smartphone makers such as Asus, Motorola and Sony, all of which have effectively withdrawn. Traditional watchmakers will be relying on their strengths in distribution, retail and branding in the hope of cracking a nut that proved too tough for many of the biggest names in the smartphone world". But it will not be a simple task. Jijiashvili cautions, "Several established brands are entering the smartwatch market for the first time. If sales don't live up to expectations and distributors end up with a lot of unsold stock in mid-2018, they may reconsider their involvement in this area".

Another notable player in the smartwatch market is Samsung, with its Tizen-powered devices. CCS Insight predicts Samsung will extend its range of devices during the forthcoming IFA event in Berlin, underlining the Korean company's commitment to the product category.

Performance sports-centric watches remain an important segment. CCS Insight estimates that 6 million units will be sold in 2017, rising to 7 million by 2020. However, companies focussed on this segment face challenges. Jijiashvili notes, "Sports watchmakers are under mounting pressure as other suppliers, notably Apple, add more comprehensive fitness tracking capabilities and GPS sensors to their devices. Some companies, such as Garmin, continue to thrive, but TomTom's recent announcement that it is reviewing its future in this area reflects the pressure some manufacturers face".

In other segments, smartwatches specifically designed for children continue to sell in huge numbers in China. CCS Insight estimates that 18 million units will be sold in the Chinese market in 2017, rising to 22 million units in 2021. Jijiashvili comments, "It remains unclear whether this trend will cross over into other markets and we remain cautious at present. However, the US market is showing some signs of potential, particularly as wireless carriers show more interest in the area. A clever licensing deal with a popular children's brand such as Lego, Minecraft or Disney could be a potent combination that boosts interest in the category".

Although smartwatches continue to dominate the wearables market in value terms, fitness trackers also contribute significant volume. CCS Insight expects 44 million fitness trackers to be sold in 2018, rising to 54 million in 2021. However, growth has slowed and the overall value of this segment is in decline as prices fall.

Jijiashvili notes, "Fitbit has had a difficult year, particularly in North America, and Jawbone has left the market. Smartwatches are clearly eating into sales of fitness trackers and it's little surprise that Fitbit has decided to introduce a more-capable smartwatch".

New opportunities in the "quantified self" category include wearable tokens (such as rings and jewellery), smart clothing and most notably smart footwear. CCS Insight estimates that 1.5 million pairs of smart training shoes will be sold in 2017, rising to 5 million in 2020.

Other categories covered in CCS Insight's forecast including hearables, for which CCS Insight sees opportunities as Bluetooth headsets become smarter, and wearable cameras, a segment where GoPro remains the market leader.

Click here for a PDF version of the chart above.

Notes to editors

CCS Insight is a leading provider of wearables-related research. Its wearables forecast covers numerous product segments including quantified self (fitness, activity and sports trackers), smartphone companions (predominantly smartwatches, but also other devices that work in conjunction with smartphones) and wearable cameras. The forecast presents three scenarios (core, low and high), depending on different market developments.

This forecast is part of a broader suite of wearables services including an extensive database of over 500 wearable devices, regular category reports and monthly updates on the latest wearables-related developments.

About CCS Insight

CCS Insight is a global analyst company focussing on all aspects of the connected world spanning mobile operators, enterprise mobility, business IoT, multiplay strategies, smartphones, wearables, virtual and augmented reality, Internet players, semiconductors and more. It provides a comprehensive suite services that are tailored to meet the needs of its international clients. It helps them grow their businesses while navigating the ever-changing technology terrain. Follow @CCSInsight on Twitter or learn more at www.ccsinsight.com.

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