Apple Watch to Fuel Rapid Growth of Wearables Market

By Jeffrey Burt  |  Posted 2015-03-31 Print this article Print
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IDC analysts say the new device, launched March 9, will raise the profile of all wearable products and drive vendors to build similar offerings.

The new Apple Watch will be a key driver in the expected growth of the global wearable device market, which should more than double in size this year, according to analysts with IDC.

The market research firm is expecting that shipments of wearable devices—including products for the wrist, eyes and ears—will grow from 19.6 million units last year to 45.7 million in 2015, a 133.4 percent jump. By 2019, the total number of shipments could grow to as much as 126.1 million units, the analysts wrote in a research note March 30.

The strongest growth will be among what IDC calls smart wearables—those devices that can run third-party applications. Those include Motorola Mobility's Moto 360 smartwatch, Samsung's Gear watches and, notably, the Apple Watch, which the computing giant announced March 9. Such smart devices will account for 25.7 million of the wearables that ship this year, a 510.9 percent increase from the 4.2 million units shipped in 2014.

Shipments of basic wearables—those that can't run third-party applications—will grow from 15.4 million units last year to 20 million units in 2015, a 30 percent increase.

Apple's new device will fuel much of the growth in the wearables space, according to Ramon Llamas, research manager with IDC's wearables group.

"Smart wearables are about to take a major step forward with the launch of the Apple Watch this year," Llamas said in a statement. "The Apple Watch raises the profile of wearables in general and there are many vendors and devices that are eager to share the spotlight. Basic wearables, meanwhile, will not disappear. In fact, we anticipate continued growth here as many segments of the market seek out simple, single-use wearable devices."

Apple earlier this month launched three models of the Apple Watch, from a $349 Sport version to a $17,000 luxury Apple Watch Edition version. Customers can preorder the devices in the United States starting April 10, and availability is expected to begin April 24.

The Apple Watch got mixed reactions from industry analysts when it was announced. Dan Maycock, an analyst with Transform, told eWEEK earlier this month that the device will be a boon for the company, and that "people will line up around the block to buy one, just like they did with the Apple iPhones and other mobile devices. But it's going to be the greatest test today around the viability of the smartwatch space and how far Apple can really push the envelope in that category."

Charles King, principal analyst with Pund-IT, was more skeptical about the Apple Watch's long-term viability and its impact on the larger smartwatch market.

"Smartwatches as a class of devices haven't really been flying off the shelves, and I don't see much of anything in the Apple Watch that will move the segment forward as a whole," King told eWEEK. "Unless the company and its developer community can help evolve the Apple Watch into a must-have device, I expect it will be remembered as a profitable yet short-lived showpiece."

However, IDC analysts said wearables for the wrist—including bands, bracelets and watches—will make up more than 80 percent of all wearable device shipments throughout 2019 as vendors continue to focus much of their efforts in this category. Other popular types of wearables include those that can be clipped or strapped to the body and clothing—such as hats, shirts and socks embedded with technology.

Fitness bands led the way for the wearables market, but the price of the technology has come down enough that smartphone makers are bundling it into their devices.

"Meanwhile, the market is quickly shifting toward higher-priced devices that offer greater functionality," Ryan Reith, program director with IDC's Worldwide Quarterly Device Trackers unit. "While Apple's entry into the market is symbolic, the key to success will be to create compelling use cases for the average consumer. Many users will need a good reason to replace a traditional watch or accessory with a wrist-worn device or some other form of wearable that will likely require daily charging and occasional software upgrades."



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