Report: Wearables To Top 10 Million Shipments in 2016

• By Joshua Bolkan
• 03/21/16

Global sales of wearable devices will exceed 10 million this year, up 32.8 percent over 2015, according to a new forecast from International Data Corp. (IDC). That total will more than double by the end of the forecast period, 2020, to hit 237.1 million shipments if the company's prediction holds true.

"Watch and wristband shipments will reach a combined total of 100 million shipments in 2016, up from 72.2 million in 2015," according to a news release. "Other form factors, such as clothing, eyewear, and hearables, are expected to reach 9.8 million units in 2016 and will more than double their share by 2020. This will open the door for new experiences, use cases, and applications going forward. Still, the primary focus of the wearables market will be on smartwatches."

"Although smartwatches like the Apple Watch or Android Wear devices capture the spotlight, they will only account for a quarter of all wearables in 2016 and will grow to about a third by 2020," said Jitesh Ubrani, Senior Research Analyst for IDC Mobile Device Trackers. "It's time to start thinking about smarter watches — traditional watches with some sort of fitness or sleep tracking but are unable to run apps — built by classic watch makers. These devices have the potential of making the technology invisible while still integrating themselves within day-to-day activities.

"By creating smarter watches, vendors also stand to side-step some of the typical challenges that smartwatch platforms face," added Ubrani. "There's no need to create a developer or app ecosystem for one thing, and there's plenty of room for simpler devices that appeal to the average user while smartwatches continue catering to the technophiles."

Apple's watchOS will lead the market segment, growing from 14 million shipments this year to 31 million shipments in 2020, but will lose market share over the period, dropping from 49.4 percent to 37.6 percent.

"Apple's watchOS is likely to see some slowdown in the early part of 2016 as anticipation builds for the second generation device," according to information released by IDC. "However, with newer hardware and an evolving ecosystem, Apple will remain the smartwatch leader through the majority of the forecast."

Android Wear, currently in second place, will also maintain its spot and even challenge Apple for market leader, landing at a 35 percent share in 2020 on the strength of more than quadrupled shipments over the forecast period, reaching 28.8 million sales by 2020, up from 6.1 million this year.

"Android Wear remains in second place as its list of partners grows and the platform further integrates into Google's larger ecosystem," according to a press release. "Google's decision to limit UI differentiation will stifle further growth (unlike its success in smartphones) but this may have the positive side effect of forcing brands to compete on design and price, appealing to the fashion conscious, the budget conscious or both."

Real-Time Operating System (RTOS) will move from fifth place to third doubling its 2016 5 percent market share to hold 10.1 percent of the market by 2020. Total shipments for the company will improve from 1.4 million units this year to 8.3 million units by the end of the forecast.

RTOS will achieve those gains on the strength of customers in emerging markets looking for a cheaper alternative to other providers, according to IDC.

Tizen will be the only OS in the top five to lose market share, falling from 11.3 percent this year to 6.6 percent by the end of the forecast period. Actual shipments will improve from 3.2 million devices to 5.4 million.

"Tizen's limited app ecosystem makes it a tough sell as a smartwatch, though this underdog has the potential to pose a serious threat to Android Wear if Samsung is able to provide some synergy between its lineup of Gear S watches and the rest of its consumer electronics portfolio," according to information released by IDC.

Android will round out the top five in 2020, shipping 4.3 million devices that year for a 5.2 percent market share, up from 1 million shipments and a 3.6 percent share this year.

"Adding Android-based smartwatches to Android Wear would push the category into first place in 2020," according to a press release. "However, Android smartwatches are expected to remain a small portion of the overall market and will likely be relegated to emerging regions as local vendors attempt to differentiate themselves."