By 2020 smartwatches will overtake
fitness trackers as crossover features and better price parity reduce the
New research from ABI’s wearable device market share and forecasts say that smartwatches will overtake fitness trackers by 2020. Smartwatch shipments will increase from 40 million this year to over 108 million by 2020. Conversely, activity trackers will only rise from 52 million to 67 million.
This shift in device popularity has changed the vendor share.
Apple’s share has dropped from 60% to 41%
between 4Q 2017 and 1Q 2018. Other vendors are grabbing more of the pie.
Stephanie Lawrence, Research
Analyst at ABI Research, said:
There is a growing number of new smartwatch features,
including activity tracking capabilities. This
is increasing their desirability and popularity by consumers and enterprises. Users
do not want multiple devices that can do the same thing.
It’s natural that they will opt for the smartwatch which has
more functionality. As the number of different smartwatches available continues
to grow, an increasing number of customers are opting for devices other than
the Apple Watch.
Many companies provide smartwatches with activity tracking capabilities.
For example, the Apple Watch 3/4, Samsung’s Gear Fit 2 Pro, S3, and the new Galaxy Watch, and LG Watch Sport are all smartwatches with these features.
Fitbit has also joined the smartwatch bandwagon. Two of its
latest devices are smartwatches, indicating that the company is well aware of
this market shift. The company’s shift in
focus is purely driven by needing to survive in this rapidly changing market. Fitbit’s
share of the smartwatch market is already at 10%, higher than that of Samsung,
Motorola, and LG.
More and more companies are expected to offer smartwatches
with extended functionality as the demand by consumers increases, indicating a
further spread of the vendor share of the market.
GadgetGuy’s take. Pebble proved in 2012 there was a keen interest in the wrist-worn gadgets
That was well before Apple introduced the Apple Watch and other big tech companies followed suit. Pebble is now dead – swallowed by Fitbit and never to be seen again!
But technology needed for true miniaturisation was yet to be invented. Fitness trackers were simpler, cheaper, easier to make. Fitbit and Garmin ruled this roost.
The figures speak for themselves and the trend is clear. Smartwatches will overtake fitness trackers
2016, 35 million smart devices, mainly fitness
trackers sold globally. Call this ground zero.
2017, 75 million smart devices will be sold, and 70% were fitness trackers.
2018, 92 million smart devices will be sold, and 56% are fitness trackers.
2020, projected sales of 175 million and 38% will be fitness trackers.
But actual sales reveal the underlying issue – cost.
According to Counterpoint
research, the top-selling
smartwatch in Q2 2018 was the Apple watch 1. It accounted for 90% of Apple
Watch, albeit at heavily discounted rates in Asia.
Research Director, Neil Shah, said,
Despite initial hype and traction of cellular-based Apple Watch Series 3 in the first two quarters of
2017, Apple iPhone users are actually
choosing the Series 1 as a non-cellular option over Series 3 non-cellular model
which is surprising to many industry watchers.
While this is great for Apple from an ecosystem perspective,
from an ASP perspective it is not the same bump as Apple would expect with
newer iPhone models every year.
GadgetGuy’s take. Economics, not fancy new features are
driving the smartwatch market.
While we would all like LTE connectivity, fall sensors and
ECG features the Watch series 4 starts at $599 and goes up to $1,199. In
Australia Watch series 3 now drops to between
$399 to $599.
But Apple Watch series 1 looks the same. It is still in
production and sold at US$199 on Amazon
Prime. Chinese pricing is about 1200 Yuan (about US$175). No wonder 90% of
global sales are Watch series 1.
Flagship devices be
they smartphones, TVs, cars or more are
to show off aspirational technology. But the bulk of sales still occurs in the
bread and butter products.
Fitbit smartwatch market share is rapidly growing with its
Charge 2, Versa and Iconic at $199, 299 and 399 respectively. Great devices, good
smartwatches, terrific health app and
And last year the world’s largest selling Android smartphone
was the OPPO R9 series. It started at $499 and is still selling well at $299.
Thank goodness people are starting to realise that you don’t
have to spend $1000, let alone, over $2000 to get a great phone ore watch!