Apple has revealed that Q4 sales in its wearables division rose 54% year-on-year to $6.5bn, suggesting that the US tech giant is successfully tapping a global wearables market that a new report says will generate sales of almost $52bn in 2020.
According to research firm Gartner, global end-user spending on wearables – such as smartwatches, head-mounted displays, ear-worn gadgets and smart clothing – is expected to reach $51.54bn next year.
That represents an increase of 27% from the $40.58bn in sales that is expected in 2019 and marks another considerable advance on the £32.45bn of sales made in 2018. Furthermore, Gartner predicts that end-user spending on wearable devices will continue growing to $62.99bn by 2021.
The fastest growing segments are smartwatches and smart clothing, with spending on these devices increasing by 34% and 52% respectively.
Smartwatches are also expected to take the lead in terms of overall shipments in 2020 – at 86 million units – while ear-worn shipments are forecast to reach 70 million units.
Gartner noted that the wearables market is becoming increasingly crowded and while brand leaders in the smartwatch segment, such as Apple and Samsung, can still expect to command premium pricing, competition from the likes of China’s Xiaomi and Huawei could reduce the average cost of a smartwatch by 4.5% by 2021.
Looking at the Gartner data in closer detail, it is expected that end-user spending on smartwatches will hit $22.8bn in 2020, followed by head-mounted display ($10.6bn), ear-worn devices ($8.7bn), sports watches ($4.6bn), wristbands ($3.1bn) and smart-clothing ($1.7bn).
And several factors beyond competitive pricing are driving this global demand. Miniaturisation and the manufacture of smaller and smarter sensors, for example, are expected to provide a big boost for the smart clothing market.
“These discrete and nearly invisible wearables will particularly increase acceptance among reluctant end users,” said Alan Antin, senior research director at Gartner.
Not surprisingly, new users will be another important driver of growth, but so too will be improved measures to protect data security and privacy – an especially important consideration for the healthcare market.
Sourced from Gartner; additional content by WARC staff