Wearable device sales to grow 18.4%

Wearable device sales are expected to grow by 18.4% from 232 million units in 2015 to 274.6 million in 2016, according to Gartner Inc. Sales of wearable electronic devices will generate revenue of $28.7 billion in 2016. Of that, $11.5 billion will be from smart watches.

Although the smart watch segment is witnessing strong growth, smart watch sales will remain much lower than smartphone sales. “For example, in 2016 more than 374 million smartphones will sell in mature market countries and in large urban areas of emerging market countries, for example, in Hong Kong and Singapore,” said Angela McIntyre, research director at Gartner.

Fitness wearables — which include wristbands, smart garments, chest straps, sports watches and other fitness monitors — continue to increase in popularity.

“Of all the fitness wearables, sports watches will be the one product category to maintain its average retail price over the next several years,” said McIntyre.

“Race runners, cyclists and divers will choose sports watches over smart watches because the user interface, capabilities and durability are tailored to the needs of an athlete in their sport. Continued advances in sensors and analytics for sports watches will bring new capabilities that bolster average retail prices.”

Although the size of the worldwide wristband market was on par with the unit sales of smart watches in 2015, looking forward smart watches will have stronger appeal with consumers as they typically have more multifunctional devices that can track exercise. Examples of emerging value propositions for wristbands beyond fitness include mobile payments, access, safety, wellness and health.

Head-mounted displays (HMDs) are an emerging market with origins as expensive military projects, and in 2016 the HMD market will progress towards mainstream adoption for consumers and enterprise use. “New virtual reality HMDs for consumers, such as the HTC Vive, Oculus Rift, Sony PlayStation VR and Microsoft HoloLens are expected to be available along with video games and entertainment content as well as business applications critical for their success,” said Brian Blau, research director at Gartner.

Enterprise use of HMDs will also grow in the coming years with 26% of HMDs designed for business use in 2018. HMDs will be purchased by businesses for use by employees for tasks such as equipment repair, inspections and maintenance. Workers also will use HMDs for viewing instructions and directions hands-free while they are performing a task.

Additional information is available in the report ‘Forecast: Wearable Electronic Devices, Worldwide, 2016’.