The second quarter of the year saw a resurgence in the global market for wearable devices. New market data and forecasts shared by IDC reveal an 8.5% year-on-year increase in unit shipments for the period ending June. The shipment volume hit 116.3 million units, terminating a two-quarter decline. Predictions now indicate that the total wearable device shipments will hit 520 million units for this year, signifying a 5.6% increase from last year. By 2027, IDC anticipates the market will yield 625.4 million shipments, underlining a compound annual growth rate (CAGR) of 4.7%.
Nevertheless, the recovery paints a mixed image for manufacturers. Second-quarter growth came at the cost of overall market value due to increased competition as IDC points out. Retailers resorted to heavy discounts to clear excess inventory, which subsequently led to lower average selling prices. No specific data were divulged regarding average prices or the overall market value.
Ramon T. Llamas, research director with IDC’s Wearables team, further explained the situation, stating “Most consumers think of popular brands like Apple, Samsung, and Fitbit when it comes to wearables, and they would be correct.” However, he added, the market is growing because of numerous smaller companies that have focused on regions like China and India with fully featured devices that meet price expectations.
Interestingly, consumers’ rising desire for more holistic health tracking is being fulfilled by both large and small players. Devices like connected rings, targeting demands like sleep monitoring, exercise recovery metrics, readiness scores, and stress level tracking are emerging. Brands like Oura, Whoop, and Withings are carving out a niche, leading major brands and local companies to keep a close eye on this arena, as indicated by Jitesh Ubrani, Research Manager, Mobility and Consumer Device Trackers at IDC.
According to IDC, smartwatches, making up close to 32% of unit shipments in 2023, will be overshadowed by earware, including smart headphones, earbuds, and similar products. These are projected to deliver 320.7 million unit shipments globally this year, thereby accounting for 62% of the market. However, smartwatches are set for a higher growth rate of 6.3% over the 2023-2027 period, compared to earware’s 4.5%, thus boosting their market share to 34%.
While wristbands are anticipated to experience negative growth, reducing their market share to below 5%, the ‘other’ category, including products like connected rings, is showing signs of significant growth, albeit from a low start point. What the next few years will hold in term of wearable technology is indeed intriguing.