Demand for wearables to increase 24% this year
Demand for wearables (including smartwatches and fitness trackers) remained robust during the pandemic and will grow by 24% to 239 million units worldwide in 2021, according to market analyst company CCS Insight.
CCS Insight’s report indicates an impressive 22% growth in unit sales for smartwatches and fitness trackers in 2020, with 193 million units sold, making it a market of almost $24 billion.
The report notes that smartwatches from brands such as Apple, Samsung, Garmin, Fitbit and Amazfit were the preferred choice for 60% of those who splashed out on a new wearable in 2020, while 40% went for the simpler and cheaper alternative offered by a fitness band.
CCS Insight expects this trend will continue in 2021 and beyond. Over 1.2 billion devices are expected to be in use by the end of 2025, with yearly sales approaching 400 million units in the year.
“Like several other technology product categories such as laptops and tablets, smart wearable devices were winners in 2020 despite the problems thrown up by the Covid-19 pandemic”, observes Marina Koytcheva, Vice President of forecasting at CCS Insight.”
This contrasts with other products such as mobile phones which recorded a 13% drop in global demand in 2020.”
- The smart wearables market recorded strong growth in 2020 as users in some markets focussed on well-being, fitness and activity tracking as a result of the pandemic.
- CCS Insight expects the growth trend to continue in 2021 and beyond, with global unit sales expected to double between 2020 and 2025 to 388 million.
- Apple maintains its global leadership in smartwatches, but many other companies are eyeing up the opportunity, especially those targeting owners of Android smartphones.
Adds Leo Gebbie, Senior Analyst, Wearables at CCS Insight:
“With many people confined to their homes for prolonged periods and exercise becoming a highlight of the daily routine, there’s no doubt that well-being, fitness and activity tracking became a priority for many.
“Exercise and activity regimes moved from gyms to outdoor spaces, making a smartwatch or a fitness band that tracks steps, distance, heart rate and other activity metrics more attractive than ever for lots of people.”
“Smart wearables are resonating well with consumers around the world. To date, this growth has been fuelled by the seemingly unstoppable success of the Apple Watch, but we’re betting the next wave of strong growth will be boosted by tapping into the huge number of Android smartphone owners who have not been tempted by wearable tech so far.”
Smartwatches for kids
CCS Insight notes that this process is already underway, and despite Apple’s strong volume growth, its market share is estimated to have shrunk from 55% of smartwatch sales in 2019 to 47% in 2020 when kids’ smartwatches are excluded.
Google has been eyeing up the smartwatch opportunity for some time. However, its approach to date has been a dismal failure, with its Wear OS operating system accounting for a meagre 3% of smartwatch sales in 2020. It will be hoping its acquisition of Fitbit will change its fortunes to prevent rivals from running away with the prize, claims CCS Insight.
A segment that struggled in 2020 but is expected to bounce back in 2021 is smartwatches for kids. Koytcheva comments: “There was little incentive to make a purchase while schools were closed and kids were stuck at home during the pandemic, but we expect 28 million devices will be sold in 2021, representing growth of 32% year-on-year. That said, with over 90% of sales coming from China, smartwatches for kids cannot be viewed as a global phenomenon just yet”.
One opportunity that has still failed to materialize in a meaningful way is cellular-enabled wearables, devices that have built-in cellular connectivity and can be used without being linked to a smartphone. These premium devices have failed to take off even though they are an attractive product for manufacturers, as well as mobile operators keen to get more gadgets connected to their networks.
Gebbie notes: “Marketeers still have a lot of work ahead to explain the true benefit of owning a cellular-enabled smartwatch. I expect a big push in this area in the next few years focussing on outdoor fitness and exercise, as these are times when users may not want to take their smartphone with them.”
More details of CCS Insight’s wearables research service can be found at: www.ccsinsight.com/research-
