Commentary

Smartwatch Shipments Growing 32% A Year, But 51% Don't See The Point Of Owning One

Smartwatches still have somewhat of an uphill climb.

The latest tracking numbers from IDC show the number of smartwatches hitting the market this year to be around 20 million devices, a 4% growth from last year.

As might be expected, more than half of those are Apple watches, though Android is catching up.

The growth of LTE-connected smartwatches being shipped will be 32% annually over the next five years, according to a new report by BI Intelligence. By 2021, the number of independently smart watches will hit 30 million.

Another twist along the smartwatch path is the added ability for a consumer to use a smartwatch to pay for things.

Within four years, 62% of wearable devices shipped globally will be payments-enabled, according to BI Intelligence estimates. This will be driven mostly by smartwatches, with more than half (54%) of total payment wearables being smartwatches.

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Payment capabilities also will come in fitness bands (6%) and eyewear and other connected clothing (2%).

Smartwatches are generally defined as those that can run third-party applications, which include Apple Watch, Samsung’s Gear S3, Motorola’s Moto 360 and Pebble Watch.

Ultimately, smartwatches are moving to be less smartphone-connected and more standalone.

The catch is that smartwatch growth faces a number of barriers to adoption. There are four areas that need to be overcome to drive growth, according to BII:

  • Limited perceived utility – An earlier BII study found that 51% of consumers didn’t see the point of owning a smartwatch.
  • Smartwatches are not fashionable – The wrist devices are not yet seen as an attractive accessory, like luxury traditional watches.
  • Data utility – Gaining access to large volumes of data is not enough to generate savings for many businesses. Hence, companies may be less inclined to provide wearable devices for employees.
  • Workplace adoption may be sluggish – Many businesses are concerned about security around smartwatches as well as other connected devices. The different watches also run on different operating systems, which can cause some headaches for technical departments.

The potential, longer-term opportunity for smartwatches may be to start to take the place of the smartphone in the world of the Internet of Everything. 

The smartphone is currently the most practical hub to control various connected devices in the home.

The smartwatch advantage is the hands-free, always on capability to be able to manage and control other devices, ultimately by voice.

And then, plenty of watches will flood the market.

The capability of the watch being able to tell time will be within the same context of a smartphone being able to be used to make a phone call.

Until then, there’s still the traditional watch – and the smartphone.

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