The latest forecast by CCS Insight predict sales of smart devices such as the Apple Watch will double in the next four years.
2018 has been good for smart wearables, with an estimated 117 million devices to be sold by the end of the year according to CCS Insight. The analyst firm expects that figure to double to 233 million in 2022 with a market value of over $27 billion.
Leading the charge are smartwatches, with 85 million units expected to be sold in 2019, growing to 137 million in 2022. This forecast covers a wide range of smartwatches, including smart sports watches, smart analogue watches, smartwatches with built-in connected location trackers specifically designed for children, and smartwatches with cellular connectivity.
Smartwatches continue to gain in popularity, primarily thanks to the success of market leader Apple, which extended its product range with the launch of its Series 4 Apple Watch in September. The company is also offering the Apple Watch at the broadest range of prices so far, making it more accessible to iPhone owners.
CCS Insight believes the high engagement among current smartwatch owners will provoke a wave of replacement sales in coming years. The company believes Apple is best positioned to take advantage of this, particularly with the latest update to the Apple Watch series. However, it also notes that growing awareness and satisfaction with smartwatches among technology enthusiasts will help to broaden the potential market, with wrist-worn wearables from new brands making progress.
“The Apple Watch has done well because it’s bought by iPhone owners. People with Android smartphones represent a far bigger market and we believe that conditions are right for the next wave of smartwatch adoption thanks to an ever-improving selection of smartwatches from fashion and consumer electronics brands hit the market,” says Jijiashvili.
The research firm notes that Fitbit’s smartwatches have seen solid uptake during 2018 and it is also positive about the opportunity for smartwatches powered by the recently revamped Wear OS from Google, particularly when combined with an updated technology platform from chipmaker Qualcomm.
“We’re hugely encouraged that established watchmakers such as Fossil are betting their future on a wide range of smartwatches for several fashion brands such as Diesel, Michael Kors and Skagen, and premium watchmakers such as Louis Vuitton, Montblanc and TAG Heuer continue to invest in this area. When you combine this with the renewed interest in smartwatches from leading smartphone makers such as Huawei and Samsung, you can see a groundswell of activity that signals a positive outlook for the market”.
The company believes that the growing proportion of cellular-enabled smartwatches also represents a great opportunity for mobile network operators:
“As cellular-enabled smartwatches take an increasing share of the market, operators have the chance to derive new revenue from the additional monthly fees they can charge users, particularly as the ability to offer one number on multiple devices continues to grow”. However, Jijiashvili cautions that “operators must ensure they don’t get greedy with the fees they charge to connect smartwatches or they risk dampening demand for the promising new product category”.
CCS Insight believes growing adoption of basic cellular-enabled watches, predominantly aimed at kids, is an important factor in the wearables market. The demand for these devices is especially strong in China and there are signs of interest in other regions, despite modest uptake so far, partly because of privacy concerns. However, several mobile operators beyond China are assessing the potential of these devices. A notable example is Vodafone, which now offers a range of wearable products as part of its V by Vodafone initiative; this range includes a smartwatch for children.null