IDC: Smartwatches will make up 1/3 of the wearables market in 2018

By Jonah Comstock
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Smartwatch popularity continues to be on the rise, but traditional fitness trackers aren't going anywhere either, according to new market research from International Data Corporation (IDC). The entire worldwide wearables market is on track for 15.1 percent growth this year, for a total of 132.9 million units shipped. Of that, smartwatches represent about one-third of the shipment volume, but two-thirds of the market in terms of spend, owing to their higher average price point.

Senior research analyst Jitesh Ubrani said in a statement that health and fitness features have been largely responsible for smartwatches' traction, and while they will continue to be important, users are also moving beyond them.

"Consumers are finally starting to understand and demand the utility of a smartwatch," Ubrani said. "At present, fitness uses lead by a mile but mobile payments and messaging are starting to catch on. The addition of cellular connectivity is also starting to resonate with early adopters and looking ahead the emergence of new use cases like music streaming or additional health sensors will make cellular connectivity pivotal to the success of the smartwatch."

While smartwatch market share is expected to increase in the next few years, from 32.8 percent in 2018 to 38.3 percent in 2022, fitness band marketshare is expected to shrink during the same period, from 36 percent to 22 percent. But Ramon T. Llamas, research director for IDC's wearables team, said in a statement that the category won't shrink to nothing; in fact, total shipments could rise slightly.

"The appetite for wristbands and basic watches will not go away," he said. "Both products will enjoy sustained popularity as users’ first wearable thanks to their simplicity and lower price points and will reach new audiences as part of digital health solutions (wristbands) or for those who want wearable technology but prefer the traditional look and feel of a hybrid watch."

In addition to these two categories, IDC is tracking traditional watches, smart clothing, and earwear, including headsets and wireless headphones. Interestingly, IDC actually forecasts that basic watches will grow as a category now that the wrist real estate has been re-normalized by devices. Earwear is projected to grow from 2 to 6 percent of the wearables market and smart clothing will see more modest growth from 3.1 percent to 5.3 percent.

IDC predicts the overall wearables market will grow 13.4 percent (CAGR) over the next five years, with 219.4 million units shipping in 2020.