Is Wearable Devices Market the Next Big Opportunity for Companies?

A recent report by IDC has forecast double digit growth for wearables, as new capabilities and use cases, expand the market opportunities

The worldwide market for wearable devices, now inclusive of wireless headphones with smart assistants, is forecast to grow 15.3 per cent from 2018 to 198.5 million units by the end of 2019, according to the International Data Corporation (IDC) Worldwide Quarterly Wearable Device Tracker. Driving that growth will be the continued proliferation of watches, ear-worn devices and wrist bands as well as further adoption in the healthcare segment. Looking ahead, the market is expected to reach 279 million units by the end of 2023 with a compound annual growth rate (CAGR) of 8.9 per cent.

Ramon T. Llamas, research director, IDC wearables team, pointed out, “Two major drivers for the wearables market are healthcare and enterprise adoption.” It is to be noted here that watches had accounted for 44.2 per cent of the entire wearables market in 2018.

Jitesh Ubrani, research manager, IDC Mobile Device Trackers, added, “The rise of smart assistants on wearables, both wrist-worn and ear-worn, is a trend worth watching. Though still in its infancy, the integration of these assistants with wearables opens up new use cases, from allowing these devices to tie into the smart home to making the devices more proactive at urging users to live healthier or more productive lives.”

Wearables category highlights

Watches accounted for 44.2 per cent of the entire wearables market in 2018 and its share is anticipated to grow throughout the forecast, reaching 47.1 per cent in 2023. IDC says smartwatches from Apple will undoubtedly lead the way and despite increasing competition from watches running forked versions of Android as well as Wear OS, WatchOS will account for 27.5 per cent of all watches in 2023. Other than smartwatches, hybrid watches and simpler kids’ watches will also continue to grow albeit at a much slower pace.

Ear wear, also referred to as hearables and ear-worn devices, will be the second largest category of wearables in 2023 with 31 per cent share. The inclusion of biometric sensors and the adoption of smart assistants will help drive this category forward throughout the forecast.

Wristbands, once the most popular form factor, will experience flat growth with a CAGR of 0.7 per cent. Meanwhile, growth in terms of dollar value is expected to decline with a -4.1 per cent CAGR during the same period as average selling prices will witness a drop from $51 in 2019 to $42 in 2023. The market is already dominated by Chinese brands such as Huawei and Xiaomi.

Connected clothing will be largely comprised of step-counting shoes and similar devices. These types of products have mainly been popular in China till date but that is slowly changing as brands like Nike and Under Armour make headway in other markets. In the later years of the forecast, IDC said that it expects to see more enterprise applications introduced as companies aim to monitor employees in hazardous situations.