Wearables continue growth trend, says Futuresource
February 19, 2019
Wearable technology continues to capture the interest of consumers and is riding an upwards trend, with close to 105 million wearables shipped in 2018, a year-on-year increase of ten per cent, according to the latest wearable technology market report from Futuresource Consulting.
“Not only are shipments on the increase, but we’re also seeing a rise in the average selling price,” said James Manning Smith, market analyst at Futuresource. “As a result, last year’s global retail value exceeded $19bn, equating to a 17% increase in value, outstripping the increase in shipments by some way. This price rise is largely thanks to increasing demand for smartwatches and a parallel stagnation of activity trackers and sports watches, plus a declining interest in basic fitness devices.”
He said there was still plenty of competition in the segment.
“I expect to see increased investment in the product area, fuelling a battle for health and fitness feature inclusion and improvement across a range of devices,” he said.
Qualcomm’s recent wearable SoC release is yet to be fully adopted in the current smartwatch product line-up, however the platform looks set to ignite innovation across the Wear OS device space during 2019. Google’s recent $40m investment in Fossil Smartwatch IP highlight the technology giant’s commitment to wearable technology, leaving the market anticipating a hardware release from Google or potential revamp of its Wear OS platform.
Looking to the brands, Apple regained its position as the largest connected watch vendor during Q4, totalling 20 million Apple Watch shipments during the year. However, in volume terms it has been challenged by Xiaomi throughout the year, which has gained in volume rankings during 2018.
Fitbit and Fossil remain challengers to Apple’s dominance on the smartwatch market, with Fossil competing through offering a wide range of smartwatch styles and Fitbit competing on price, with its $200 Versa. In 2019, Futuresource expects vendors to benefit from a strong market for smartwatches, with tailwinds driven by replacement and upgrade purchases generating strong market growth.
Although the rate of growth will begin to decline from 2020, Futuresource expects growth to continue throughout the forecast period, with shipments expected to exceed 145 million units worldwide in 2022, achieving a retail value in excess of $27bn. This will be driven predominantly by replacement sales and the on-going uptake of smartwatches and wireless watches.
“A key question in the industry is at which point we will see wearable devices shift from being a fitness or mobile accessory towards becoming a standalone device” said Manning Smith.