The Apple Watch is winning in the battle of fitness trackers

Consumers are ditching their fitness trackers for the added functionality of smartwatches. And as smartwatches become increasingly easy to use and affordable, they will capture an even greater share of the wearables market, driving down demand for fitness- and activity-tracking bands, like the Fitbit. The fitness-band category will make up 42% of total wearables shipments in 2020, down from an estimated 48% share this year, and a 53% share in 2014.

To win over nontech buffs, smartwatch makers are also offering models that cater to health and fitness enthusiasts. The Apple Watch Sport model, for example, has basic materials like an aluminium case with a rubberised band, similar to the material on popular fitness trackers like the Jawbone Up or Fitbit Force.

In a recent report, BI Intelligence takes a closer look at how smartwatches will siphon market share from fitness trackers in the wearables market, and how Apple’s smartwatch might impact the market for luxury watches. We also forecast shipments for both Apple Watch and the broader luxury watch market over the next five years, and examine the pricing and design strategy behind the Apple Watch, the new retail distribution opportunities with this device, and the wider opportunity among tech-savvy consumers.

Access The Full Report And Our Ongoing Research By Signing Up For A Trial Membership Today >>

Here are some key points from the report:

  • Potential smartwatch buyers are interested in notifications and health and fitness apps. Apple has the advantage among these buyers: three times as many people are interested in a smartwatch from Apple, over one running the Android platform, according to our BI Intelligence global online survey on smartwatch adoption and purchase intent.
    • A significant 27% of respondents interested in the Apple Watch said they already wear a watch and that the added functionality of a connected watch appeals to them.
    • Fitness bands have more limited functionality and will cater to a more niche, health-focused audience.
  • Fitness bands are aiming to widen their reach by offering designer brand versions of their devices. For example, Nordstrom carries a Tory Burch-design version of a Fitbit fitness tracker for the more fashion-conscious consumer.
  • By 2020, Apple Watch shipments will be equivalent to about two-fifths of the luxury-watch market. Assuming a lower-bound price of $US350 for the luxury-watch category, and including Apple Watch in that category, traditional wristwatches would account for ~60% of total shipments in 2020, while Apple Watch would account for ~40%.

The report is full of charts and data that can be downloaded and put to use.

In full, the report:

To access the full report from BI Intelligence, sign up for a 14-day trial here. Members also gain access to new in-depth reports, hundreds of charts and datasets, as well as daily newsletters on the digital industry.

NOW WATCH: 14 things you didn’t know your iPhone headphones could do

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.