Smartwatches, Bluetooth headsets to drive high growth wearables market
The firm expects that 310.4 million wearable devices will be sold worldwide in 2017 – an increase of 16.7 percent from 2016 – generating revenue of $30.5 billion. Smartwatches are expected to account for $9.3 billion of that revenue, with sales totaling 41.5 million units.
Apart from Bluetooth headsets, smartwatches are on pace to account for the highest unit sales of all wearable device form factors from 2019 to 2021, says the report. By 2021, they are predicted to total nearly 81 million units and represent about 16 percent of total wearable device sales.
“Smartwatches are on pace to achieve the greatest revenue potential among all wearables through 2021, reaching $17.4 billion,” says Angela McIntyre, research director at Gartner. “Revenue from smartwatches is bolstered by relatively stable average selling prices (ASPs) 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.”
Two smartwatch sub-categories that are expected to perform well are kids’ smartwatches and traditional watch brands. Kids’ smartwatches – which are targeted at parents of two to 13 year-old children as a gateway to smartphones – are predicted to account for 30 percent of smartwatch unit shipments in 2021.
Meanwhile, fashion and traditional watch brands are expected to account for 25 percent of smartwatch units by 2021. “Luxury and fashion watch brands will offer smartwatches in an attempt to attract younger customers,” says McIntyre.
Besides smartwatches, the wearable device categories considered in the report include head-mounted displays, body-worn cameras, Bluetooth headsets, wristbands, Sports watches, and “other fitness monitors.” Of these, Bluetooth headsets are expected to remain the most sold wearable device through 2021, with sales of 206 million units predicted in 2021.
The growth of Bluetooth headsets, says the report, will be driven by the elimination of headphone jacks by most smartphone providers. “By 2021, we assume that almost all premium mobile phones will no longer have the 3.5 mm jack,” says McIntyre.
Meanwhile, an area of the wearable market that is getting a lot of attention with its association with virtual and augmented reality – head-mounted displays – will only account for seven percent of wearable devices shipped in 2017. However, says McIntyre, “Current low adoption by mainstream consumers shows that the market is still in its infancy, not that it lacks longer-term potential.”
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