New research by market analytics company, CCS Insight, shows that 71 million smartwatches are forecast to be sold in 2018 and an extra 140 million in 2022. This is exceeding previous sales from 2017 of 25 million. Global sales of the Apple Watch alone reached 16 million units. It has been published that worldwide wearable sales will grow at an average of 20% each year for the next five years.
Furthermore, in the hearables category – smart headphones, wireless earphones, wireless speakers – the strong growth is predicted to hit sales of 33 million units in 2022. However, rates have fallen for the fitness trackers in which sales decreased by 18% in 2017. Two companies, Fitbit and Huami now account for 80% of the market.
George Jijiashvili, senior analyst for wearables at CCS Insight, comments: “Apple has become the market leader for smartwatches. Sales volumes have exceeded expectations and the introduction of a cellular-enabled model has pushed up the value of its sales, which we estimate at $5 billion in 2017.”
Looking ahead to the Baselworld event in Switzerland in March, Jijiashvili notes: “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”.
It is not just traditional watchmakers that are facing pressures from Apple; Google-powered Android is also struggling to find momentum with just under five million units shipped in 2017. The company is predicted to sell fewer than 6 million in 2018.
Jijiashvili observes: “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.”
CCS also believes that Apple has put a strain on the on the smart sports watch industry. Jijiashvili notes: “We’ve concluded that 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.”
More notable highlights from CCS Insight’s latest forecast include the strong shipments of connected watches for children in the Chinese market. The research firm estimates that 25 million of these watches were sold there in 2017.
Jijiashvili comments: “The success of kids’ watches in China is impressive. There’s strong support from Chinese mobile network operators and we’re expecting further growth in 2018 as 4G networks improve to support even more advanced features.” However, Jijiashvili cautions that 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, CCS Insight estimates there were 1.5 million hearable devices sold worldwide, and it expects the market to quadruple in 2018 to 6 million units. Jijiashvili notes, “We forecast healthy growth in the hearables market, 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”.
CCS Insight’s report also indicates that fitness trackers sold 40 million units in 2017 but the market has weakened — it was 23% lower than its peak in 2016. Says Jijiashvili, “The fitness tracker market is now dominated by two large players, Fitbit and Huami, which account for about 80% of global shipments. Huami has grabbed the top spot from Fitbit as it exploits its enormous home market advantage in China.”
The new report also assesses the market beyond wrist-worn wearables, including hearables, which are defined as smart wireless headphones, earphones or earbuds that connect to smartphones and other compatible devices over Bluetooth, offering additional capabilities beyond audio features.
More details of CCS Insight’s wearables research service can be found at: www.ccsinsight.com/our-services/wearables.