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Healthy smartwatch growth seen after slow 2015

Matt Hamblen | Feb. 4, 2016
More traditional watch makers will enter the space to offer sleeker designs, Gartner says

Despite slower than expected sales last year, smartwatch sales will grow at a healthy rate and will have the highest revenue potential of all wearables through 2019, according to Gartner.

The market research firm expects global smartwatch sales to reach $11.5 billion in 2016, then jump to $17.5 billion in 2019.

On Tuesday, Gartner said about 30 million smartwatches were sold globally in 2015, and that number is expected to reach 50 million in 2016, then nearly 67 million in 2017. Skipping to 2019, Gartner projects 79 million smartwatches will be sold. Gartner’s 2015 number of 30 million smartwatches sold was down from a forecast of 40 million it made last October.

A big factor in attaining that growth will be how well Apple succeeds in popularizing wearables, including the Apple Watch, as a lifestyle trend, according to Gartner analyst Angela McIntyre.

"Apple is one of the few companies that offers a crossover between style and technology, and with the Apple Watch, consumers trust Apple to set the trends," McIntyre said in an interview.

Apple was the most successful smartwatch maker in 2015, despite not entering the market until April — months later than expected. As a result, its smartwatch sales were below expectations, although overall smartwatch sales by other vendors didn't meet expectations.

IDC said Apple shipped about 13 million smartwatches in 2015, well below the 21 million the research firm projected earlier in 2015. Gartner wouldn't comment on sales by specific smartwatch makers, including Apple.

The next-generation Apple Watch 2, expected to be announced as early as March with shipments in April, is considered the product to watch to help rev up the market.

What must happen in 2016 and beyond is that smartwatch makers -- including traditional watch makers like Casio, which are now entering the smartwatch market -- need to catch the interest of mainstream buyers, or at least "early mainstream" buyers, McIntyre said. That group would expand beyond the early adopters who have already warmed to the smartwatch trend.

Many smartwatch makers are eager to find ways to entice more women to buy smartwatches. Gartner surveyed 4,000 U.S. consumers last year and found that 8% had a smartwatch; 5% of women owned one while 11% of men did.

"Before the Apple Watch, most smartwatch designs were big and masculine-looking and still tend to be that way," McIntyre said. While there is clearly a trend toward smartwatch designs that "shrink it and pink it" to lure more women buyers, women's styles for smartwatches tend to remain larger, at least in the U.S., she added.

"Part of the problem with making the device smaller is having reasonable battery life," McIntyre noted. "For women, it has to complement their personal style and wardrobe, and that may mean more than one device. All the [technology complexities] of smartwatches that fascinate men may not seem as necessary to women as they think about how they would use the watch most of the day."

 

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