Commentary

Wearables Off To Strong Start

With fitness tracking devices already common and Apple Watch raising the profile of smart watches, wearable devices are poised to take off this year, according to a new forecast from International Data Corporation (IDC). Smart watches in particular will grow fast in proportional terms, although their overall penetration will remain low.

Altogether IDC predicts that shipments of wearable devices of all kinds will increase 133% from 19.6 million units in 2014 to 45.7 million units in 2015, later climbing to 126.1 million in 2019. That works out to a compound annual growth rate of 45% per year over that five-year period.

The lion’s share of these will be wearables for the wrist, including bracelets and watches, which IDC forecasts will account for 80% of total units shipped. Most of the rest will be “modular wearable devices,” which include devices worn anywhere else on the body with a clip or a strap. A third category, smart clothing like shirts and hats, is less prevalent but expected to grow fastest in proportional terms in the years to come because of its ease of use.

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IDC expects adoption of smart Glass-like devices to rise, but mostly driven by enterprise uses. Meanwhile smart “earwear,” including smart earpieces and earphones, will remain a relatively small niche market.

Focusing on the smart watch market, including devices like Apple Watch, Samsung’s Gear, and Motorola’s Moto 360, the number of units shipped is set to soar 511% from 4.2 million units in 2014 to 25.7 million units in 2015. Meanwhile “basic wearables,” referring to devices that don’t run third-party apps like fitness trackers, will grow a respectable 30% from 15.4 million in 2014 to 20 million in 2015.

The growth rate in smart watches is undoubtedly impressive, and actually exceeds the uptake for the first iPhone, which sold 1.4 million units when it was introduced in 2007. But that's just a small fraction of current smartphone shipments, which IDC projects will reach 1.4 billion units this year and 1.9 billion by 2018.

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