Gartner: shipments of wearables such as the Apple Watch to reach 225 million in 2019

Here’s some good news for the Apple Watch and AirPods: Gartner, Inc. forecasts that worldwide shipments of wearable devices will reach 225 million in 2019, an increase of 25.8% from 2018. 

End-user spending on wearable devices is forecast to reach $42 billion in 2019. Of that, $16.2 billion will be on smartwatches, notes the research group.

“At the moment, the smartwatch market is bolstered by the relatively stable and higher average selling price (ASP) of the Apple Watch,” says Alan Antin, senior director at Gartner. “But the overall ASP of smartwatches is expected to slowly decline from $221.99 in 2018 to $210 in 2022, due to lower-priced competitors and as higher volumes lead to reductions in manufacturing and component costs, while strong brands like Apple and traditional watch brands try to keep pricing stable.”

Gartner chart.jpg

In 2019, 74 million smartwatches will be shipped, which makes smartwatches the top segment of all wearable device form factors. However, Gartner predicts that by 2022, ear-worn devices (“hearables”) shipments will take over as the top wearables segment with 158 million units shipped compared with 115 million smartwatch shipments in 2022.

The research group predicts that, as the smartwatch segment continues to mature, it will subdivide into four main types of providers: leading consumer electronics brands, fashion and traditional watch brands, children's watches, as well as special-purpose brands and startups that cater to niche audiences such as people with medical issues that need to be monitored. While the consumer electronic brands such as Apple, Fitbit and Samsung have a comfortable lead, other brands are gearing up.

“Traditional watch brands such as Fossil and Casio will gain market share by offering more style and choice in their portfolio than the technology brands,” says Antin. “We think that fashion and traditional watch brands are likely to account for up to 20% of unit shipments by 2022.”

Gartner predicts that by 2022, ear-worn devices, such as Apple AirPods, will account for more than 30% of all shipped wearables, as their capabilities expand beyond communication and entertainment. Currently, the main use cases for ear-worn wearables are fitness and health coaching, communications and entertainment, hearing aids/medical devices, and professional.

Gartner forecasts that future generations of ear-worn devices will be able to accommodate virtual personal assistants and subsequently be used for a multitude of tasks such as queries and hands-free directions. Moving forward, advanced ear-worn devices can reduce smartphone use, as they will take over many tasks that users solve with the help of their smartphones today, per the research group.

Immersive head-mounted displays (HMDs) are primarily used to experience augmented reality (AR) or virtual reality (VR). Mainstream consumer use has been limited due to availability, cost, ergonomics, unfashionable design and other factors. (Apple is rumored to be working on an HMD that will debut in 2020 or 2021.

The main driver for AR HMDs is enterprise usage, where they are used internally as hands-free tools for business process improvement and training. The main use case for VR HMDs is entertainment and gaming. However, Gartner says there continues to be a mismatch between expectations and what the current technology can deliver. This will change, but for a price.

“Contrary to what we see in other segments, the ASP for HMDs will increase by 19.2% until 2022, as better content demands better technology,” says Antin.