- Smartwatches will continue to dominate due to the strength of the Apple smartwatch and the growing number of companies offering impressive functionalities.
- 5G smart home-enabled smartwatches to be in the market by 2024.
Demand for wearables and accessories will grow, after a slowdown last year, to 344 million units this year, fuelled by renewed demand from consumers.
According to technology intelligence firm ABI Research, 300 million wearables devices were shipped in 2021 and it will grow to more than 650 million devices worldwide by 2027, at an annual growth rate of 13.2 per cent between 2022 and 2027.
Up to the end of the current year, the growth in the wearables market is foreseen to be driven mainly by two segments, namely sport, fitness, and wellness trackers and smart home-enabled smartwatches.
“The reason behind the rise of these two segments is the continuing direct consequence of the pandemic on consumer’s habits. This year, smartwatches will continue to dominate the wearables market due to the strength of the Apple smartwatch and the growing number of companies offering smartwatches with impressive functionalities,” David McQueen, Consumer Technologies Research Director at ABI Research, said.
Moreover, he said the increasing demand for activity trackers is predicted to drive the wearables market.
Health and fitness use cases
Activity trackers will reach shipments of about 91.5 million by the end of 2022 and are forecast to reach 105 million by 2027, at an annual growth rate of 2.9 per cent.
“There is rapid growth in the use of wearables, notably smartwatches and activity trackers, among cyclists, runners, gym-goers, swimmers, and athletes, to track calories burned, hourly activity, stationary time, and activity time. The growth in health and fitness use cases is expected to propel wearable shipments,” McQueen said.
However, he said that standalone cellular connectivity will be confined to smartwatches for the time being as sport, fitness, and wellness trackers market will not ship with a cellular connection before 2026..
In comparison, smart home-enabled smartwatches (smartwatches with the ability to interact with smart home devices) represented about 4 million devices in 2021 and is expected to expand to 32 million in 2027, at an annual growth rate of 35.8 per cent between 2022 and 2027.
This category will mainly be shipped with a 4G connection, producing a spectacular growth rate of about 60 per cent from 2022 to the end of 2027.
ABI Research forecasts 5G smart home-enabled smartwatches to be in the market by 2024.
New market opportunities
“This category represents a very small portion of wearable devices shipped with 5G cellular connectivity. Furthermore, these gadgets are projected to record very rapid growth, especially between 2024 and 2027,” McQueen said.
The global smartwatch market recorded about 102.57 million shipments during 2021 and is expected to increase to 121.03 million by the end of 2022. The market is forecast to grow to 289.7 million units worldwide by 2027, at an annual growth rate of 19 per cent.
During the first half of this year, Apple was the lead vendor with 49.6 per cent of the market share, followed by Huawei (17.8 per cent), and Samsung (11.4 per cent).
In terms of connectivity, 4G smartwatches will be the main devices shipped with a penetration rate of 5 per cent during 2022, while 5G will appear in 2023, with a low penetration rate of about 0.3 per cent.
With the main exception of smartwatches, McQueen said that cellular connectivity in the wearables market has been minimal but is set to flourish, both in size and complexity.
“New technologies continue to emerge, and existing technologies are evolving to address new market opportunities and use cases.“