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Smartwatch Sales To Grow 48% By 2017, Gartner Says

Wearables will achieve over 18% growth in 2016, with smartwatches taking the lead for earnings growth potential, Gartner predicts.

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Wearable electronic sales will reach 274.6 million units in 2016, predicts Gartner. The group forecasts an 18.4% jump from 232 million units sold in 2015. The market will drive $28.7 billion in revenue in 2016.

Of that total, $11.5 billion will come from smartwatch sales. "Smartwatches have the greatest revenue potential among all wearables through 2019, reaching $17.5 billion," Gartner research director Angela McIntyre said in a statement.

For the purposes of the report, it should be noted Gartner separates wrist wearables into three categories: smartwatches, wristbands, and sports watches. Researchers also predicted the outlook for head-mounted displays, Bluetooth headsets, and smart garments.

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Smartwatch sales are largely influenced by Apple, said McIntyre, noting how the tech giant has popularized wearables as a lifestyle trend. While the brand is a consumer favorite, it's hard to determine Apple Watch sales numbers, because Watch is combined with other hardware in financial reports.

Apple aside, there are several trends driving smartwatch sales. One is the demand for convenience. Consumers may prefer to receive alerts via smartwatch, rather than constantly digging out their smartphones.

"Even though people are tied to their phones, we also want to give ourselves more flexibility," said McIntyre in an interview with InformationWeek. Being able to leave the phone behind once in a while, she said, is an increasingly popular benefit.

The use-cases for smartwatches go beyond accessible notifications, she explained. As smartwatches advance, more will be able to accurately interpret voice commands, control IoT devices, and pay for point-of-sale purchases.

Health and fitness tracking is another powerful driver of smartwatch sales. Basic fitness wearables can track steps and keep us motivated to move, but realistically the health potential for smartwatches is "just getting started," said McIntyre.

In the long term, we will be able to integrate basic health data from wearables with other information like sleep quality and nutrition, which may come from different apps.

"Having that data available every day will, eventually, provide more insight to consumers," said McIntyre. The more health data we have at our fingertips, the better we can learn how certain habits affect us.

Wristbands are more narrowly focused than smartwatches, which are intended to perform a broad range of functions, McIntyre explained. They include fitness bands like Fitbit and the Disney Magic Band, which gives customers access to their rooms and lets them pay for purchases.

(Image: Mtreasure/iStockPhoto)

(Image: Mtreasure/iStockPhoto)

Gartner predicts 44 million wristbands will be on the market in 2017. Some will have several sensors (like the Microsoft Band), but even more will be used for specific purposes. McIntyre explains how a wristband could be used to verify payments, enter a corporate building, or access confidential information.

Despite the growth of smartwatches, sports watches will continue to grow and reach 27 million devices by 2017. Demand will continue to be strong among runners, cyclists, and other athletes who prefer the features, interface, and durability of a watch designed for sports.

Head-mounted displays (HMDs) will also see growth through 2017, when they will reach 6.31 million devices, Gartner predicts. Mainstream adoption will continue among consumers and enterprises this year.

New HMDs like HTC Vive, Oculus Rift, Sony PlayStation VR, and Microsoft HoloLens are expected to be available, along with entertainment content and business apps that will drive their success, said Brian Blau, Gartner research director, in a statement.

By 2018, 26% of HMDs will be designed for business use. Common use-cases include inspecting and repairing equipment, viewing instructions in order to work hands-free, and training employees to perform complex tasks.

With respect to other wearables experiencing growth, Gartner anticipates Bluetooth headsets and smart garments will reach 139 million units and 5.3 million units, respectively, by 2017.

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Kelly Sheridan is Associate Editor at Dark Reading. She started her career in business tech journalism at Insurance & Technology and most recently reported for InformationWeek, where she covered Microsoft and business IT. Sheridan earned her BA at Villanova University. View Full Bio

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danielcawrey
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danielcawrey,
User Rank: Ninja
2/2/2016 | 3:26:36 PM
Health
There is really some great health-related applications for wearable devices, which I think is why there will be sales growth. There still needs to be some more compelling applications for wearables, but over time I believe that there will be some great software. 
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