Last week, IDC released the latest update to the Worldwide Quarterly Wearable Device Tracker and the report was interesting on several levels. First, the numbers:
“The worldwide wearable device market will reach a total of 111.1 million units shipped in 2016, up a strong 44.4% from the 80 million units expected to ship shipped in 2015. By 2019, the final year of the forecast, total shipments will reach 214.6 million units, resulting in a five-year compound annual growth rate (CAGR) of 28%.”
It’s been predicted for many years that the wearables market will be very large, shipping hundreds of millions of units by the end of the decade, and this report certainly builds that expectation. In addition, smart watches have been widely expected to drive a significant portion of the growth in wearables. In fact, in March 2015 IDC estimated “wrist wear” to account for 80.4% of the wearables market. The most recent report (Dec 2015) shows Apple maintaining a majority share of the smart watch market share by 2019, although Android Wear showing significant gains between 2015-2019. In addition, the report says “the smartwatch we have today will look nothing like the smartwatch we will see in the future. Cellular connectivity, health sensors, not to mention the explosive third-party application market all stand to change the game and will raise both the appeal and value of the market going forward.”
There are a few things of interest about this:
1. Over the course of 2015, IDC has increased their estimates of the worldwide wearables market growth every quarter, now estimating 214.6M units will be shipped in 2019. Their estimate just 9 months ago (March 2015) was 126.1M units for 2019. For those counting at home, that’s over 70% growth in the market projection in less than a year. So what’s driving the increases? Jitesh Ubrani, one of the IDC analysts authoring the report, told me the growth in the estimate was due to “more form factors, more vendors, and more fashionable designs”.
2. IDC expects “vastly improved experiences” with wearables to drive additional growth in the wearables market. It’s fair to say that if wearables don’t deliver “vastly improved experiences”, the wearables market will not meet its lofty growth expectations. As we’ve discussed before, wearables are in a somewhat unique situation where the technology has advanced much faster than the use cases, particularly in sports & fitness wearables. The technology exists to deliver “vastly improved experiences”, but the “whole products” are relatively few and far between today. However, that’s changing. We’re seeing compelling new experiences being developed at Valencell with our licenses and their plans for the future. It’s good to hear that IDC is seeing it as well.
3. Also driving growth is “a proliferation of form factors and device types. Smarter clothing, eyewear, and even hearables (ear-worn devices) are all in their early stages of mass adoption.” Valencell is certainly seeing demand for a many different form factors and use cases, particularly with wrist wear and hearables. With hearables in particular, you can expect to see more hearables with more capabilities hit the market in 2016 than any year in history. Valencell’s own Dr. Steven LeBoeuf expands on that point here.
With the wearables market growing so quickly and dynamically that the even the projected market size has growth north of 70% in less than a year, it will undoubtedly be an interesting few years in wearables. Keep an eye on this market. It changes every quarter and practically every day!