FRAMINGHAM, MA – Total smartwatch shipments will reach 20.1 million units in 2016, an increase of 3.9% from 2015, says the International Data Corp.
A year after the launch of the Apple Watch established a new benchmark for the worldwide smartwatch market, new smartwatch shipments are expected to see only modest growth for the rest of 2016 due to late-in-the-year and iterative product releases, says the research firm.
IDC categorizes smartwatches as those that can run third-party applications. Examples include Apple's Watch, Samsung's Gear S3, Motorola's Moto 360, and Pebble's Watch.
IDC expects total smart wearable volumes to reach 21.5 million units shipped in 2016. By volume, smartwatches account for the largest part of the category, and are expected to reach a total value of $17.8 billion dollars in 2020.
By the end of 2016, total shipments of basic wearables will reach 80.7 million units. IDC categorizes basic wearables as those that do not run third-party applications. Examples include Fitbit's selection of fitness trackers, Garmin's Vivofit devices, and Xiami's MiBand.
"To date, smartwatches have remained in the realm of brand loyalists and tech cognoscenti, but we expect that to change over the next few years," said Ramon Llamas, research manager for IDC's Wearables team. "First, smartwatches will look and feel like traditional watches, appealing to those who put a premium on design and style. Second, once the smartwatches get cellular connectivity, they’ll disconnect from the smartphone, making them more useful. Third, smartwatch applications will build on this cellular connection, and connect with other devices within the home and at work. Finally, smartwatch prices will come down, making them more affordable to a broader market."
"It is increasingly becoming more obvious that consumers are not willing to deal with technical pain points that have to date been associated with many wearable devices," said Ryan Reith, program vice president for IDC's Mobile Device Trackers. "Complaints about battery life, smartphone dependency, and minimal use cases have been well versed across most publications and research findings. The aforementioned improvements that are rapidly being deployed by most vendors should improve this aspect, but at the same time the increase in devices that have more fashion appeal over technological appeal should also be a catalyst to growth in both smartwatches and basic watches with minimal functionality beyond normal analog."