Smartwatch Market Overview
The global smartwatch market valued $10,223.9 million in 2017, is forecasted to witness a CAGR of 22.7% during 2018 - 2023. Growing awareness on personal health and fitness and rise in smartwatch-controlled automotive capabilities are the key factors driving the growth of this market, globally.
GLOBAL SMARTWATCH MARKET, BY PRODUCT, $M (2013–2023)
In 2013, around 2.1 million units of smartwatches were sold in the market, which marked the beginning of a new era in the mobile technology space. In 2014, more than 85 companies sold nearly seven million smartwatches across the globe.
Extension smartwatches have been contributing the highest revenue to the global market, with over 50% share in 2017. This can be majorly attributed to the introduction of next-generation smartwatches than can be used as an extension to smartphones or related devices. Besides, additional innovative applications such as tracking, alerts, and connectivity, which are compatible with extension smartwatches, have garnered consumer interest in recent years. This factor is expected to further increase the sales of smartwatch market, particularly in the middle- and upper-middle-class segments during the forecast period.
iOS based smartwatches accounted for over 40% of the smartwatch market in 2017, while on the basis of application, smartwatches with personal assistance features had the highest shipment.
Players in the smartwatch market have been increasingly investing in the design and development of economic products equipped with all basic smart features, which is suggestive of the potential growth of the classic smartwatch market during the forecast period. For instance, Huawei, in September 2017, launched its classic versions of smartwatches for customers, particularly in India, who have been demanding economic smartwatches equipped with all smart features, at a pocket-friendly price. The newly launched Huawei Watch 2, Huawei Watch 2 Classic, and Huawei Watch 2 4G are comparatively low priced than other similar offerings by players in the market and also come with latest connectivity options, such as NFC, Wi-Fi, Bluetooth, and GPS.
Smartwatch Market Dynamics
The demand for computerized wristwatches with functionalities that go beyond just timekeeping and basic smart features has been driving the growth of the smartwatch market. Early smartwatch models were largely limited to the choice of widgets, which consumers can see on the display. With increase in the demand for high-end smartwatches that are equipped with not only smartphone capabilities but also waterproof and shockproof features, companies operating in this market are putting their efforts toward introducing better scope for customization in their offerings. For instance, Apple offers its new Apple Watch series with a 50-meter water resistance capability, a dual-core processor, and a two-time brighter display feature.
New and innovative features are taking the global smartwatch market to the next level and are also expected to boost the overall sales in the market in the near future. This is because companies are focusing on the design and development of highly advanced smartwatches that are equipped with high-definition (HD) cameras, GPS receivers, tiny powerful speakers, ample storage, thermometers, and others. The high-end smartwatch market has also been on the rise with the introduction of software that has enabled next-generation smartwatches with a seamless wireless and touchless feature, high-end communication, digital mapping, and personal organizer.
The rapid emergence of technology has made people more conscious about their health and fitness. With better access to technology, people are increasingly using advanced gadgets to maintain their fitness levels. In this context, fitness and health smartwatches help them in tracking their daily activities and reducing bad practices that may affect their wellness in the long run.
The ability of smartwatches to seamlessly integrate day-to-day, health-related activities into an application-based module, which is accessible from a smart device such as smartphone or tablet, is adding to their popularity in the segment. These smartwatches are increasingly becoming popular among consumers (especially in the age group 15‒35 years) who like to track and maintain their personal health and fitness schedules. According to a recent study, smartwatches and healthcare fitness wearables have backed the widespread awareness on tracking personal health among people and pushed their outlook toward a healthy future. Thus, the growing awareness on personal health in people is a growth driver for the smartwatch market.
Hybrid smartwatch, which is a fusion of traditional mechanical watch and a smartwatch, is creating a huge opportunity for players in the smartwatch market. A hybrid smartwatch offers the features of a regular smartwatch (with some connected features) but without a touch display and charging functionality. It is smart because of its Bluetooth connectivity feature but resembles a normal mechanical watch with added functionalities, such as a heart rate tracker and a calorie (burned) tracker.
Consumers, particularly the upper and the business class, have shown great interest in such hybrid smartwatches, as they find less interest in complex smartwatches requiring long charging hours and sound technical knowledge for their optimal usage. Therefore, the segment holds a huge growth potential for the players operating in the market.
Smartwatch Market Competitive Landscape
There are a moderate number of regional and international players that offer different products and services in the smartwatch industry, which makes the intensity of rivalry moderate. There are no major differences in the base product; however, features largely vary from one model to another, based on the application. This makes the intensity of rivalry moderate.
Based on the growing demand for new models of smartwatches with next-generation features, such as touch display technology and voice recognition, companies are rolling out new versions/updates and smarter models on a regular basis to maintain a strong position in the market. For instance, a third-generation Apple Watch Series 3 was launched by Apple Inc. in September 2017. Being a dynamic and high-growth sector, the smartwatch market is also witnessing several partnerships and collaborations among regional and global players to develop advanced products and stay competent.