Analysts have been too quick to write off the smart watch market after the negative reception for Samsung’s Galaxy Gear watch device.
We still agree with Apple CEO Tim Cook when he said in May 2013, “I think the wrist is interesting.”
The $US2.5 billion wearable computing market has so far been anchored by smart fitness bracelets and the Kickstarter-funded Pebble smart watch. These two categories are quickly fusing into one larger market: smart wristwear. Smart wristwear will become the wearables category-leader for the ordinary consumer. (See chart, above.)
New mass-market smart watches from companies like Sony, Qualcomm, and Nike are debuting all the time. They may be of uneven quality, but they will get better. Many of them are fitness bands that include watch displays, or timepieces with fitness band-type features like GPS and pedometers. Speculation surrounding an Apple iWatch pegs its release date around mid-2014.
In a recent proprietary forecast for the smart watch market, BI Intelligence has published a half-dozen charts and datasets illustrating the potential for smart watches within the wearable computing space and mobile.
Here are the dynamics and numbers driving the emerging smart watch market:
- We forecast 91.6 million smart watch units — Internet-connected wristwear that tells the time — sold globally in 2018. With an average selling price of about $US100, that translates to a $US9.2 billion market by 2018. Subscribers can download a spreadsheet and charts that show year-by-year estimates and the numerical assumptions behind our market forecast.
- A mass-market smart watch would be the first new mobile device since the smartphone to upgrade or enhance a ubiquitous consumer product — the wristwatch. A watch with an Internet connection isn’t as alien a concept as Google Glass.
- And watches are a huge addressable market. It varies by age and gender, but consumer surveys reveal a slight majority of the U.S. and global populations still wear a watch, around 55%.
- Even if only a minority of watch-wearers upgrade to Internet-connected and app-centric smart watches, that’s still a huge market and a boon for growth-hungry tech players and app makers.
- In the future, about one in 20 smartphones will be paired in some way with smart watches.
- Through just the first half of 2013, the Kickstarter-launched Pebble watch has shipped 93,000 smart watches and has taken over 275,000 pre-orders.
- Smart watches will have screens, even if they’re tiny, and potentially run software that allow them to serve as a robust extension to smartphone operating systems and apps.
In full, the report:
- Analyses the data showing that smart watches will turn out to account for one-third of the wearable computing market
- Explains why the key to the smart watch market is the “attach rate” the percentage of smartphone owners who will acquire a smart watch to complement their phone
- Breaks down the attach rate and smart watch sales between smartphone owners, new smartphone purchasers, and wristwatch-wearers
- Explains why app-centric smart watches represent the natural evolution of the digital watch
- Looks at how the smart watch market has been sized by different research firms and compares their estimates with ours
- Examines hints that Apple’s foray into a smart watch may not be a stand-alone watch but a modular system of compatible and differently styled wrist-worn wearable devices for different lifestyles
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