The global market for smartwatches, fitness trackers and other wearable devices is forecast to reach 110 million units in 2016, rising to 237.1 million devices by 2020. Apple Inc. (NASDAQ: AAPL) is expected to nab the highest market share among smartwatch makers during the five-year forecast.
The data were reported Thursday by IDC in the firm’s Worldwide Quarterly Wearable Device Tracker. The 2016 estimate for 110 million units represents growth of about 38% over 79.6 million wearables shipped in 2015.
Smartwatch and wristband shipments are forecast to total 100 million units in 2016. and other devices included in clothing, eyewear and “hearable” are forecast to ship 9.8 million units this year.
Senior research analyst Jitesh Ubrani said:
Although smartwatches like the Apple Watch or Android Wear devices capture the spotlight, they will only account for a quarter of all wearables in 2016 and will grow to about a third by 2020. It’s time to start thinking about smarter watches—traditional watches with some sort of fitness or sleep tracking but [that] are unable to run apps—built by classic watch makers. These devices have the potential of making the technology invisible while still integrating themselves within day-to-day activities.
By creating smarter watches, vendors also stand to side-step some of the typical challenges that smartwatch platforms face. There’s no need to create a developer or app ecosystem for one thing, and there’s plenty of room for simpler devices that appeal to the average user while smartwatches continue catering to the technophiles.
IDC appears to believe that traditional watchmakers will be able to carve out a niche of some size among consumers who either don’t need or want the full technical capabilities of a smartwatch or who are satisfied with limited capability as long as it is attached to a well-know brand. We noted earlier this week that Fossil Group Inc. (NASDAQ: FOSL) plans to have smartwatches available for eight brands by the 2016 holiday season.
At the platform (operating system) level, Apple’s watchOS is forecast to take 49.4% of the market in 2016 and 37.6% in 2020, a compound annual growth rate in unit shipments of 22%. Android Wear from Alphabet Inc. (NASDAQ: GOOGL) is forecast to win 21.4% of the 2016 market rising to 35.0% in 2020, a compound annual growth rate in unit shipments of 48%. The fastest growing platform is expected to be the Real-Time Operating System (RTOS), which will post a compound annual growth rate of 56% between now and 2020, driven primarily by gains in emerging markets and adoption by Chinese original device manufacturers, which then stamp a brand on the device.