Wearables coming off strong growth in 2021
Despite turbulence from the pandemic, wearables have overcome supply chain difficulties and resonated with buyers increasingly conscious of their health and fitness. Strong device adoption and replacement has continued in developed markets, and interest has also been sparked in emerging economies — creating a storm of purchasing throughout 2021 and driving a 20% growth in shipments over the year.
Smartwatches led adoption in 2021 , and market leader Apple has continued to break shipment records thanks to its highly developed offering. But the growing presence of Chinese brands is poised to take advantage of growing interest from developing markets. Google also looks set to reignite competition with investment in its Wear OS platform — and with the potential launch of a long-awaited Pixel watch later in 2022. Although Apple looks set to perform well in 2022, an Android growth spurt is expected as customers are given the opportunity to choose from an enhanced Google offering. We therefore forecast smartwatch shipments to increase by 21% in 2022 (see Market Forecast: Wearables, Worldwide, 2022-2026).
Android mobile phone users have arguably been underserved in wearables, and certainly haven’t benefited from the strong product ecosystems that have helped the Apple Watch. The highly fragmented Android smartphone market, and its wider range of prices, have left Google-based smartwatches to become a bit of an afterthought.
As such, the smart wearables space has seen instability over the years — manufacturers such as LG, Asus and New Balance have come and gone, and investment in hardware platforms has been patchy. For example, Intel disbanded its wearable device team in 2018, leaving Qualcomm to support hardware for the Android smartwatch market almost single-handedly.
Change in the smartwatch market seemed to start in 2021, with small steps away from Apple’s domination as a wide range of brands made headway. In all segments there’s been a persuasive story of growth, ultimately resulting in Apple’s share of smartwatch shipments falling from 47% in 2020 to 44% in 2021 — despite overall Apple Watch shipments increasing. Samsung’s move to Wear OS for its Galaxy smartwatch range proved a success, spurring sales to new customers and offering new replacement benefits for existing ones. Huawei saw strong sales in China, aided by continued nationalistic purchasing trends in its home market. And the growing number of Chinese Android manufacturers increased wearables sales as their brands expanded worldwide.
Although smartwatch growth was certainly the wearables headline of 2021, the fitness tracker market also continued to expand with a 14% growth in shipments over the year. This product category offers a low-cost way for people to dip their toes into wearable technology — but more importantly for long-term wearables growth, it’s been shown to spark interest that leads to upgrades to more-advanced smartwatches.
Overall, the wearables market is in a fantastic position; as such, we expect more diversity to appear in the next few years. CCS Insight forecasts overall wearables shipments at 402 million units by 2026, with smartwatches only increasing their dominance. With added investment in product development from brands beyond Apple, and Google enhancing its own products, customer choice will grow and a new wave of competition will appear.
The chart below offers a snapshot of our global wearables forecast. For more information about our projections, simply drop us a line.
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