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Apple Watch, Android Devices Driving Wearables Market

The Apple Watch and Android-based wearable devices are expected to lead the market during the next four years, according to IDC latest report.
10 Cool Fitness Trackers That Aren't Apple Watch
10 Cool Fitness Trackers That Aren't Apple Watch
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Wearable device shipments are expected to reach 76.1 million units in 2015, up 163.6% from the 28.9 million units shipped in 2014, according to IT research firm IDC's quarterly Wearable Device Tracker.

Worldwide shipments are projected to hit nearly 175 million units by 2019, resulting in a five-year compound annual growth rate (CAGR) of 22.9%, though the Sept. 14 report notes the forecast includes both basic and smart wearables, two very different product categories.

The worldwide market for wearables is being fueled by a growing list of vendors (most notably Apple with its highly publicized Watch), a proliferation of devices, various price points, and steady consumer adoption.

The IDC report predicted that wearable devices that give consumers the ability to download and use third party apps, like the Apple Watch, Motorola Moto 360, Samsung Gear S-series, and Pebble Time smart watches, would come to dominate the market.

"Applications raise the value and utility of the device, similar to what they do for smartphones and tablets," Ramon Llamas, IDC's research manager for wearables, told InformationWeek.

The current market consists primarily of basic wearable devices, like Fitbit's fitness band, that help people keep track of basic health and fitness statistics but lack a display and more sophisticated computing power.

"Wearables without a display will continue to find a part of the market, although I expect that part of the market to shrink in the years to come," Llamas said. "A wearable with a display easily and conveniently shows data without [the wearer] having to consult a smartphone or a tablet. Some form factors may lend themselves to not having a display -- think of smart shirts or shoes, and some smaller fitness trackers. But if it goes on the wrist, I’d prefer a display."

Among operating systems, IDC expects watchOS, which Apple recently announced an update for, would quickly establish itself as the overall leader in the smart wristwear market and maintain its position throughout the forecast, climbing to 40.3 million units shipped by 2019 and capturing just under half of marketshare.

Android and Android Wear devices, which currently constitute around 17% of the market, are expected to climb to 38.4% marketshare by 2019, with 32.6 million devices shipped, up from just 4.1 million units shipped this year.

Pebble's OS is expected to see a small boost from 2.1 million devices to 2.6 million devices in 2019, but will see marketshare cut by more than half, from 8.7% this year to just 3.1% in 2019.

While Apple is expected to see its marketshare erode as other platforms enter the space and find favor with consumers, IDC expects second and third generations of the Watch to drive shipment volumes later in the forecast, particularly among those customers content to wait.

[Read about the strong debut of the Apple Watch.]

"It's only the first generation device, [...] it's only been out for one quarter, and it's only been in select markets," Llamas explained. "There are a lot of potential customers taking a wait-and-see approach, which gives Apple the time to develop the product that much more."

Llamas explained the same goes for the rest of the market, with Android Wear showing steady improvement as are Samsung and Tizen.

"Today's Fitbit [models] are better than the first- and second-gen models, and we can draw similar conclusions to other devices as well," he said. "Here's where I preach patience on the market."