Apple Watch and Hearables to Fuel Growth in Wearables

Forecast Expects 243 Million Wearable Devices to Ship in 2022


Worldwide wearables sales are expected to grow an average of 20 percent each year over the next five years, becoming a $29 billion market by 2022, according to our latest wearables forecast, published yesterday.

Smartwatches continue to be the product most widely associated with wearables. The Apple Watch has been a trailblazer in this category, with sales rising 60 percent in 2017 to 16 million units. We estimate that about a quarter of Apple's sales in the fourth quarter of 2017 were made up of the cellular-enabled Apple Watch.

It's not surprising that traditional watchmakers are looking over their shoulders nervously at Apple given the significant slice of the market it has secured in just three years. Our projections show that in 2018 Apple will come close to matching worldwide sales of Swiss-made watches, which sold 24 million units in 2017.

But it's not just traditional watchmakers that are facing pressure from Apple. CCS Insight's forecast signals that Google-powered Android Wear smartwatches have lost momentum, estimating that just under 5 million units were shipped in 2017 and predicts fewer than 6 million will sell in 2018.

Google has paid a heavy price for its recent lack of commitment to Android Wear. Attention seems to have shifted to its Pixel smartphones and Google Home products at the expense of smartwatches. To stay competitive and support the growing number of traditional watchmakers making smartwatches such as Fossil, Guess, Movado and TAG Heuer, there needs to be a major update to Android Wear in 2018.

We believe that Apple's success has also put pressure on the smart sports watch category. The Apple Watch's improved capabilities in health, sports and fitness tracking mean sales of smart sport watches have peaked. The future success of companies such as Garmin will depend on their ability to differentiate their products. They'll need a razor-sharp focus on specialist sports usage rather than going after the recreational health features that Apple now offers.

Another notable highlight of our latest forecast is the success of connected watches for kids in the Chinese market. We estimate that 25 million of these watches were sold there in 2017. There's strong support from Chinese mobile network operators and we expect further growth in 2018 as 4G networks improve to support even more advanced features. Despite this, growth beyond China remains elusive: although we recorded sales of about 1 million units in the US in 2017, we don't expect the kind of volumes we've seen in China. And in Europe, privacy concerns and regulatory issues have cut the market to just a few thousand units.

In 2017, we estimate there were 1.5 million hearable devices sold worldwide, and expect the market to quadruple in 2018 to 6 million units. We forecast healthy growth, particularly if Apple updates its already successful AirPods with smarter features to join other hearables from brands such as Bragi and Jabra in this burgeoning sector. Our enthusiasm for hearables is underpinned by our expectation of even faster growth over the next five years, taking the market to an impressive 30 million unit sales in 2022.

Our report also shows that fitness trackers sold 40 million units in 2017, but the market has weakened — it was 23 percent lower than its peak in 2016. This space is now dominated by two large players, Fitbit and Huami, which account for about 80 percent of global shipments. Huami has grabbed the top spot from Fitbit as it exploits its enormous home market advantage in China.

The new forecast is available to clients of our wearables research services and consists of a PDF report offering a summary of our expectations, and an Excel file with detailed forecast numbers. If you'd like to know more, please This e-mail address is being protected from spambots. You need JavaScript enabled to view it with us.

This entry was posted on February 22nd, 2018 and is filed under Services. You can follow any responses to this entry through the RSS 2.0 feed or you can leave a response.

Posted By George Jijiashvili On February 22nd, 2018


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