New data from IDC shows that the worldwide wearables market is on the right track, and is set to register an impressive growth in 2017. Vendors will reportedly ship a total of 125.5 million wearable devices this year. This represents a significant 20.4% YoY growth from the 104.3 million shipments in 2016. Between 2017 and 2021, the worldwide wearable devices shipment is estimated to be doubled, reaching 240.1 million units.
The largest share of the shipments will come from Watches, both Smart and Basic Watches. Together they will constitute 56.9% of the market share with 71.4 million shipments in 2017. Following them are wristbands, accounting for 37.9% of the market with 47.6 million shipments. The rest of the shipments will be made up by Smart Clothing (2.6%), Earwear (1.3%) and other fringe products like clip-on devices, non-AR/VR eyewear, etc. (1.3%). Basic watches, which include hybrid watches, fitness/GPS watches and most kid watches, will remain the most popular with a 32.5% market share compared to 24.5% for smart smartwatches.
Despite appreciable growth in 2017, this upward trend is not expected to slow down anytime soon. The wearables market is set to increase at a CAGR of 18.2% to reach 240.1 million shipments by 2021. This growth is being fueled by maturing software and hardware design, as well as expanding utility, app support and lowering costs. As the second and third generation of smart wearables comes out, consumers can enjoy a more refined and feature-rich experience including cellular connectivity and increasingly popular digital assistants.
Of course, not all segments of the market will experience uniform growth levels. The bulk of the shipment volume and growth in 2021 is expected to come from watches, and in particular – smart watches. In 2021, watches are expected to command a 67% market share overall. However, while basic watches will maintain a relatively stagnant market share of around ~35% from 2018 to 2021, smart watches will continue to increase in popularity and will account for nearly 33% of the market by 2021. If these trends hold, we can expect smartwatches to take over basic watches within the decade.
Clothing and Earwear are both also set for considerable growth in the upcoming years, at a CAGR of 76.1% and 39.7% resulting in a 9% and 1.7% market share, respectively by 2021. These segments are being pioneered by products such as Google and Levi’s upcoming Project Jacquared-enabled jacket and Samsung Gear Icon X Earwear.
On the flip side, the popularity of wristbands is set to fall quite drastically, with negligible growth in shipments to about 52.2 million by 2021. This would represent only 21.7% of the market in 2021. Just not too long ago they were neck to neck with watches, but that is set to change. Fitness/GPS bands now find themselves in a similar position as digital mp3 players did when the smartphone revolution came about. The expanding and often overlapping feature set of newer generation smartwatches is slowing rendering fitness bands obsolete.