Monday, 03 December 2018 01:12

Smartwatches lead the way as wearable devices market to hit US$42b by 2019 Featured

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Apple watch Apple watch

Worldwide shipments of wearable devices will reach 225 million in 2019, an increase of 25.8% from 2018 – and spending on wearable devices is forecast to reach US$42 billion in 2019, with US$16.2 billion of that spending on smartwatches.

According to a new forecast from Gartner, by 2022, ear-worn devices, such as Apple AirPods, Samsung’s IconX and Plantronics’ BackBeat FIT, will account for more than 30% of all shipped wearables, as their capabilities expand beyond communication and entertainment.

Currently, the main use cases for ear-worn wearables are fitness and health coaching, communications and entertainment, hearing aids/medical devices, and professional.

“At the moment, the smartwatch market is bolstered by the relatively stable and higher average selling price (ASP) of the Apple Watch,” said Alan Antin, senior director at Gartner.

“But the overall ASP of smartwatches is expected to slowly decline from US$221.99 in 2018 to $210 in 2022, due to lower-priced competitors and as higher volumes lead to reductions in manufacturing and component costs, while strong brands like Apple and traditional watch brands try to keep pricing stable.”

Gartner says that in 2019, 74 million smartwatches will be shipped, which makes smartwatches the top segment of all wearable device form factors.

But, the company predicts that by 2022, ear-worn devices (“hearables”) shipments will take over as the top wearables segment with 158 million units shipped compared to 115 million smartwatch shipments in 2022.

As the smartwatch segment continues to mature, Gartner forecasts it will subdivide into four main types of providers – leading consumer electronics brands, fashion and traditional watch brands, children's watches, as well as special-purpose brands and start-ups that cater to niche audiences such as people with medical issues that need to be monitored.

And Gartner says that while consumer electronic brands such as Apple, Fitbit and Samsung have a comfortable lead, other brands are gearing up.

“Traditional watch brands such as Fossil and Casio will gain market share by offering more style and choice in their portfolio than the technology brands,” Antin said. “We think that fashion and traditional watch brands are likely to account for up to 20% of unit shipments by 2022.”

According to Gartner, future generations of ear-worn devices will be able to accommodate virtual personal assistants and subsequently be used for a multitude of tasks such as queries and hands-free directions.

And moving forward, the company says advanced ear-worn devices can reduce smartphone use, as they will take over many tasks that users solve with the help of their smartphones today.

Gartner also reports that head-mounted displays will become more expensive.

“Immersive head-mounted displays are primarily used to experience augmented reality or virtual reality. Mainstream consumer use has been limited due to availability, cost, ergonomics, unfashionable design and other factors. The main driver for AR HMDs is enterprise usage, where they are used internally as hands-free tools for business process improvement and training,” Gartner says.

“The main use case for VR HMDs is entertainment and gaming. However, there continues to be a mismatch between expectations and what the current technology can deliver. This will change, but for a price,” Antin said.

“Contrary to what we see in other segments, the ASP for HMDs will increase by 19.2% until 2022, as better content demands better technology.”

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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