The global market for smartwatches is expected to grow this year, and could begin to catch up to the traditional watch market.
By the end of this year, the total value of smartwatches shipped worldwide will be two-thirds of the size of the traditional Swiss watch market, according to a new study by Canalys.
More than 28 million smartwatches will be shipped this year, up from 24 million last year, according to Canalys. The total value of smartwatches shipped will grow to $10 billion.
Watch brands may need to expand their marketing efforts from the traditional watch market to compete, according to Canalys analyst Jason Low.
“Forming partnerships with technology companies will be the first step,” Low said in a statement. “A well-formulated strategy to sell a watch will play a larger role as watchmakers have to appeal not only to watch fans, but consumers who are yet to buy a wearable.”
Last year, Apple shipped almost 12 million smartwatches, capturing 49% of the market, followed by Fitbit (17%) and Samsung (15%), according to Canalys.
However, the smartwatch market appears to be small in relation to other wearables, at least in the U.S.
A recent Kantar study found that fewer than half (35%) of wearables sold in the fourth quarter of last year in the U.S. were smartwatches, as the IoT Daily reported at the time (16% Own Wearables, 76% Don't Plan To Buy Any).
That study also found that general interest in wearables is low, with more than three-quarters (76%) of U.S. consumers who don’t own a wearable saying they don’t plan to purchase one within the next year.
Although some traditional watches now have connected features, such as fitness tracking and GPS location, Canalys expects smartwatches to overtake those in the next two years.
“Basic bands have been eroding the low-end watch market and despite being a nascent market, smartwatches have negatively affected the high-end mechanical watch segment,” Canalys’ Low stated. “With fewer people wanting to buy traditional watches, connected watches with limited functionality risk ending up like basic bands: being taken over by smartwatches by 2018.”
Canalys defines smartwatches as 'multipurpose devices that serve as accessories to smart devices' and connected watches as 'fully independent watches with some connectivity built in.'
By 2021, the number of smartwatch shipments is expected to grow to 53 million, according to Canalys.