Wearable Market Set To Grow 16.7 Percent Thanks To Smartwatches

Market research firm Gartner announced Thursday (Aug. 24) it expects 310.4 million wearable devices to be sold around the globe this year, marking a 16.7 percent increase from 2016. In a press release announcing the new forecast, Gartner said the wearable devices market will generate revenue of $30.5 billion in 2017. Of that, $9.3 billion will be from smartwatches.

“Smartwatches are on pace to achieve the greatest revenue potential among all wearables through 2021, reaching $17.4 billion,” said Angela McIntyre, research director at Gartner, in the press release. Revenue from smartwatches is bolstered by relatively stable average selling prices of the Apple Watch.

“The overall ASP of the smartwatch category will drop from $223.25 in 2017 to $214.99 in 2021 as higher volumes lead to slight reductions in manufacturing and component costs, but strong brands such as Apple and Fossil will keep pricing consistent with price bands of traditional watches,” she added.

According to Gartner, 41.5 million smartwatches will be sold in 2017. Smartwatches are on pace to account for the highest unit sales of all wearable device forms from 2019 to 2021, aside from Bluetooth headsets. By 2021, sales of smartwatches are estimated to total nearly 81 million units, representing 16 percent of total wearable device sales, Gartner reported.

Gartner predicted Apple will maintain its market share lead, currently possessing more share than any other smartwatch maker. As more players enter the market, Apple’s share is expected to decline from around one-third to one-quarter by 2021. The research firm expected other consumer electronics brands such as Asus, Huawei, LG, Samsung and Sony to sell only 15 percent of smartwatches in 2021, largely because the brands do not have as strong an appeal for personal technologies as lifestyle brands.

Additionally, two sub-categories Gartner expects will perform well are kids’ smartwatches and traditional watch brands, which will emerge as significant segments for smartwatches. Gartner expects kids’ smartwatches to represent 30 percent of total smartwatch unit shipments in 2021. The other sub-category, projected to account for 25 percent of smartwatch units by 2021, includes new offerings from fashion and traditional watch brands.

“Luxury and fashion watch brands will [likely] offer smartwatches in an attempt to attract younger customers,” said McIntyre.