Wearable Device Market to Grow 38.2 Percent in 2016, IDC Says

The analysts are predicting that the space will continue to expand, due to increasing consumer demand, more vendors and different sorts of devices.


Increasing consumer demand and a rapidly expanding number of vendors will continue to fuel the fast-growing worldwide wearable device market, which IDC analysts say will see 38.2 percent growth this year and continue with double-digit gains through at least 2020.

In a report this week, IDC analysts said there will be a proliferation of new and different wearables, which will further accelerate the growth of the market.

"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," Jitesh Ubrani, senior research analyst for IDC's Mobile Device Trackers unit, said in a statement. "It's time to start thinking about smarter watches—traditional watches with some sort of fitness or sleep tracking but 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."

According to IDC's numbers, shipments of smartwatches and wristbands will hit about 100 million units this year, up from the 72.2 million in 2015. In addition, shipments of other forms of wearable devices—including clothing, eyewear and what the analysts called "hearables"—will reach 9.8 million units in 2016, and will more than double their share of the market by 2020. That said, smart watches will continue to be the primary focus of the wearables market going forward, they said.

In 2020, 237.1 million wearable devices will ship, the analysts said.

IDC's Ubrani said that traditional watch makers, by creating smarter watches, are able to avoid some of the usual challenges that come with development smartwatch platforms.

"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," he said.

However, smartwatches with an app ecosystem, including Apple's watchOS and Google's Android Wear, will continue to gain momentum as the products and the user experience they offer grow, according to Ramon Llamas, research manager for IDC's wearables unit.

"With few exceptions, this part of the smartwatch market is still in its initial stages," Llamas said in a statement. "We expect to see major changes, with smartwatches that actually look like watches, user interfaces that are easier than swipes and gestures, applications that rival those on our smartphones, and connections to networks, systems and other devices. This puts pressure on smartwatch platforms to develop further from where they are today."

Apple's watchOS is still the top platform, but could see a slowdown in the early part of the year as consumers get ready for the second generation of devices. That said, Apple will remain the dominant player through most of the forecast to 2020. Google's Android Wear is second in line, with a growing list of partners and increased integration into Google's larger ecosystem, the analysts said. Other top platforms include Real-time Operating System (RTOS), Tizen and Pebble.

The watchOS platform will have 49.4 percent of the market this year, followed by Android Wear at 21.4 percent, Tizen (11.3 percent) and RTOS (5 percent). In 2020, Android Wear, at 35 percent, will close the gap with watchOS (at 37.6 percent), according to IDC analysts. RTOS will overtake Tizen with 10.1 percent of the market, while Tizen will hold 6.6 percent.