Proving the Business Case for the Internet of Things

Activity trackers dominate wearable device sales: ABI

Iain Morris
June 19, 2014

Activity trackers dominated sales of wearable devices over the first three months of 2014, according to the latest data from ABI Research, outselling smartwatches by four to one.

Some 2.35 million trackers were shipped over the January-to-March period, says the market-research company.

Fitbit (San Francisco, CA, USA) stood out as the market leader, with a majority share, but ABI expects it to face greater competition over the course of the year from other vendors, and particularly South Korea’s Samsung (Seoul), which is making a concerted effort to dominate this sector with the introduction of its Gear Fit device.

“Activity trackers are currently the most viable consumer electronics wearable device category, because they have a clear use case that cannot be matched by smartphones, in contrast to smartwatches,” said Nick Spencer, a senior practice director with ABI. “End users have been happy to ditch their watches and use smartphones to tell the time, so extending smartphone functions to the watch is a weak use case and retrograde step.”

ABI notes that smartwatch sales dropped significantly in the first quarter, compared with the final quarter of 2013, due to the seasonal effect of Christmas but also anticipation regarding the launch of Samsung’s Gear smartwatches and Gear Fit activity tracker.

The Samsung Gear dominated sales in the final quarter of 2013, although retailers and distributors were looking to clear their Samsung Gear 1 channel inventory in readiness for the upgrade in the second quarter of 2014.

“We shouldn’t dismiss smartwatches, which are an evolving and, if you believe in reincarnation, a nascent category,” adds Spencer. “Smartwatches will develop rapidly in 2014 and 2015, with hybrid activity tracker/smartwatches soon to hit the market, more specialized components being developed and most importantly the use case improving through a growing applications ecosystem.”

“As the value proposition of smartwatches increases, however, the price will still need to decrease to balance with end-user expectations,” he added.

ABI expects ten million activity trackers to be shipped in 2014 and seven million smartwatches.
 
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