Sports, fitness and wellness trackers and smart home compatible smartwatches are becoming the fastest growing segments following renewed consumer demand
LONDON, August 11, 2022 /PRNewswire/ — Demand for apparel and accessories has slowed in 2021 due to economic and geopolitical factors impacting consumer priorities. Despite this decline, the global technology watch firm ABI Search expects continued growth through 2027. Over 300 million wearables have been shipped by the end of 2021 and will reach around 344 million by the end of this year. Additionally, more than 650 million of these devices are expected to ship globally by 2027, a CAGR of 13.2% between 2022 and 2027.
Until the end of the current year, wearables market growth is expected to be mainly driven by two segments, namely sports, fitness and wellness trackers and home-compatible smartwatches. “The reason for the rise of these two segments is the direct and continued impact of the pandemic on consumer habits. This year, smartwatches will continue to dominate the wearables market due to the strength of Apple’s smartwatch and the growing number of companies offering smartwatches with awesome features,” says David McQueenresearch director in consumer technologies at ABI Research.
The growing demand for activity trackers is expected to drive the wearables market. Activity trackers will reach shipments of approximately 91.5 million by the end of 2022 and are expected to reach 105 million by 2027, a CAGR of 2.9%. “There is rapid growth in the use of wearable devices, including smartwatches and activity trackers, among cyclists, runners, gym goers, swimmers and athletes to track calories burned, hourly activity, stationary time, and active time. The growth of health and fitness use cases is expected to propel wearable expeditions. However, standalone cellular connectivity will be limited to smartwatches for now, as the market for sports, fitness and wellness trackers will not ship with cellular connectivity until 2026,” McQueen says.
By comparison, smart home-enabled smartwatches (smartwatches capable of interacting with smart home devices) accounted for approximately 4 million devices in 2021 and are expected to reach 32 million in 2027, a CAGR of 35.8% by 2022. and 2027. This category will mostly come with a 4G connection, producing a dramatic CAGR of around 60% from 2022 to the end of 2027. ABI Research predicts that 5G smart home-enabled smartwatches will hit the market by 2024. McQueen explains, “This category represents a very small portion of wearables that ship with 5G cellular connectivity. Additionally, these gadgets are expected to see very rapid growth, especially between 2024 and 2027.”
The global smartwatch market recorded around 102.57 million shipments in 2021 and is expected to reach 121.03 million by the end of 2022. The market is expected to reach 289.7 million units globally by 2027, a CAGR of 19%. During the first quarter of 2022, Apple was the main supplier with 49.6% market share, followed by Huawei (17.8%) and Samsung (11.4%). In terms of connectivity, 4G smartwatches will be the main devices shipped with a penetration rate of 5% in 2022, while 5G will appear in 2023, with a low penetration rate of around 0.3%.
With the main exception of smartwatches, cellular connectivity in the wearable device market has been minimal, but is expected to thrive, both in size and complexity. New technologies continue to emerge and existing technologies evolve to meet new market opportunities and new use cases. It is the move towards 5G Advanced and the emergence of 5G Reduced Capability (RedCap) NR user equipment that will have the most impact on the industry, presenting a unique value proposition to enhance the user experience. “RedCap enables the creation of less complex, lower cost products with good battery life and requiring less bandwidth than 5G NR products, which is well suited for the wearable market.” concludes McQueen.
These findings are taken from ABI Research’s Mobile Accessories and Wearables Market Share and Forecast Market Data Report. This report is part of the company’s Consumer Technologies research service, which includes research, data and analyst insights. Market data spreadsheets are comprised of in-depth data, market share analysis, and highly segmented, service-specific forecasts to provide detailed opportunity insights.
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SOURCE ABI Research