The Time is Now for Smartwatches
If the numbers trickling in from the final quarter of 2017 are any indication, the smartwatch market is firmly here to stay. According to data from IDC reported on by the Wall Street Journal, there were north of 12 million smartwatch shipments during the holiday quarter. Now, roughly 60 percent of which could be attributed to Apple, but the rest of the smartwatch market has shown steady year-over-year growth during each of the last five quarters.
In 2015, according to IDC data, slightly less than 20 million smartwatches were shipped globally, or roughly 1 percent of the number of smartphones shipped during the same year. In 2017, however, that number reached 32.7 million—a 60 percent increase over 2016. Apple drove that growth thanks to the launch of its cellular-connected Apple Watch Series 3.
The IDC report is timely considering a recent argument made on Dealerscope that retailers (and manufacturers) need to be patient when it comes to consumer tech adoption. Other factors driving the growth—particularly for Apple—include a wider range of price points. The Watch, for example, starts at $250 now, compared to the $350 price tag it had when it launched in 2015. Additionally, consumers are showing a greater desire to adopt these higher-end devices that have fitness-tracking capabilities to go along with other smartphone-enabled features, according to IDC.
It’s also because of that shift in interest away from simpler wearable devices that the overall wearables market has experienced double-digit growth in average selling price in each of the last two years—a data point that should be of particular interest to consumer electronics retailers. In 2017 that average-sale-price number checked in at $380, the research firm found.
As for the top brands in the space, Apple—as mentioned—leads in both total shipments during the most recent quarter (8 million) as well as market share (21 percent). Tim Cook’s company is followed by Fitbit (5.4 million, 14.2 percent), Xiaomi (4.9 million, 13 percent), Garmin (2.5 million, 6.5 percent), and Huawei (1.6 million, 4.3 percent).
Credit: WSJ | IDC
Diving a little deeper into those numbers, it’s interesting to note that Apple’s market share figure grew nearly 60 percent year-over-year, rising from 14.4 percent to that 21 percent figure. Huawei, though holding just 4.3 percent, saw it’s share increase more than 93 percent. On the other end of that spectrum, the number-two company on that list—Fitbit—fell off more than 17 percent. The fitness-tracker company has now experienced several smartwatch flops in a row after its Ionic product, which launched in October and was supposed to clear our memories of the Blaze, fell well short of expectations.
So, while the category in general appears to be primed for growth, it’s up to the brands operating in this space to figure out what consumers actually want out of their smartwatch in order to continue growing with the market.
Related story: Patience is a Virtue with Consumer Tech Adoption