- Competition from lower cost smartwatches, as per Gartner, will reduce average selling prices by 4.5 per cent in 2021
- Smartwatches and ear-worn devices will take the lead in term of shipments in 2020
Worldwide end-user spending on wearable devices will total $52 billion in 2020, an increase of 27 per cent from 2019, according to the latest forecast from Gartner. In 2019, worldwide wearable devices end-user spending is on pace to reach $41 billion. End users, as per Gartner will spend the most on smartwatches and smart clothing with spending growing 34 per cent and 52 per cent in 2020, respectively.
“More users coming into the smartwatch segment are replacing wristbands with smartwatches,” said Ranjit Atwal, senior research director at Gartner. He added, “While brand leaders, Apple Watch and Samsung Galaxy Watch command premium pricing in the smartwatch segment, lower-priced players such as Xiaomi and Huawei will counterbalance high-priced smartwatches with lower cost smartwatches. We expect average selling prices of smartwatches to decline 4.5 per cent between 2020 and 2021.”
Smartwatches and ear-worn devices to take the lead
Smartwatches and ear-worn devices will take the lead in term of shipments in 2020, with smartwatch shipments forecast to total 86 million units and ear-worn wearable shipments reaching 70 million units. The crowded ear-worn wearable market led by Apple (AirPods), Samsung (Galaxy Buds), Xiaomi (AirDots) and Bose (SoundSport), and new entrant Amazon, remains competitive.
Other competitors, such as Nuheara, Microsoft and Starkey, are offering attractive products that fuel demand such as hearing enhancements and over-the-counter hearing augmentation devices. Competition from lower cost smartwatches, as per Gartner, will reduce average selling prices by 4.5 per cent in 2021.
Factors that influence rise in wearable devices spending
One of the biggest influencers of increasing adoption of wearables is users who are new to the wearables market. Other influences include improved sensor accuracy, advances in miniaturization and better user data protection.
Device makers will focus on smaller and smarter sensors, and those built into wearable devices will increasingly be capable of more accurate readings enabling more use cases. Gartner predicts that by 2023, miniaturizing capabilities will advance so that one tenth of all wearables will be unobtrusive to the user.
Miniaturization will also greatly benefit smart garments. Advances in miniaturization have enabled device makers to integrate sensors that can track sleep or medical conditions into wearables that are almost invisible to end users. “These discrete and nearly invisible wearables will particularly increase acceptance among reluctant end users,” said Alan Antin, senior research director at Gartner.
Data security and privacy is another influencing factor in the growing number of new wearable users. Wearable device organizations and ecosystem providers will continue to invest in protecting user data. Gartner analysts expect end-user privacy will remain an influencing factor impacting adoption especially for healthcare use cases, where HIPAA in the U.S. and relevant local regulatory rules apply. GDPR in Europe and privacy regulations in other countries will also further the cause of securing data and privacy rights.