GLOBAL SMARTWATCH MARKET
KEY FINDINGS
- The Global Smartwatch market posted a healthy 20% revenue growth in H1 2020 despite the COVID-19 pandemic and shipments remaining flat compared to the same period last year.
- Apple has managed to hold on to its top spot for the time period of October to December in the year 2020, in terms of shipments. Apple Watch shipments amounted to 40 percent of the total increase alone. In doing so, Apple also increased its market share by 6 percent.
- Apple’s Watch Series 6 and Watch SE witnessed good responses, with 12.9 million units being shipped last year.
- Samsung came in second place with a 10 percent market share. Its Galaxy 3 Watch helped the company bounce back square and fair.
- Samsung was closely followed in the smartwatch shipment sector by Huawei at around 8 percent, Fitbit at around 7 percent and the BBK group at about 6 percent market share. These companies were the top five smartwatch brands in the fourth quarter of 2020.
- Apart from Huawei, other Chinese firms like Honor, Amazfit and Xiaomi also reported double-digit growth in this period.
- Price band dynamics during Q4 2020 indicate ASPs [average selling prices] are on the rise. The ASPs are likely to continue to rise in the upcoming two to three years with the flagship models of Apple, Samsung and Huawei leading the market.
- Monitoring health has been the most advantageous aspect of wearables technology. Not only does it help fitness-enthusiasts by providing them with necessary health parameters but also aids patients by providing insights on their conditions.
- Currently, the use of smartwatches among cyclers, runners, gym-goers, swimmers, and athletes is increasing rapidly, owing to their wide range of monitoring capabilities.
- In terms of sales, Apple’s position is even stronger. In the third quarter, it achieved $2.3 billion, nearly half of global smartwatch shipments and an 18% increase over the same period last year.
- The smartwatch market is being driven by three premium brands – Apple, Samsung and Huawei.
- China surpassed North America in terms of shipment after being behind for the past seven quarters to become the market leader. While the North American market showed significant growth after the launch of the Apple Watch Series 4,
- China managed to edge ahead with smartwatches aimed towards children. Despite being the second largest smartphone market, India only accounted for about 4 percent of the total smartwatch market.
- Demand for the Apple Watch has steadily grown in overseas markets while its sales have slowed in the US and Europe. Its growth outside of North American can be attributed to carrier promotions in Southeast Asia and Latin America. Meanwhile, Huawei offered a promotion with the Huawei P40 in China.
- China saw the most growth in smartwatch shipments by 66%. Cellular-enabled smartwatches from Apple and Xiaomi made up most of China’s connected smartwatches and this is attributed in part to China’s growth in sales. Looking towards the rest of 2020, China will continue to grow in smartwatch sales with local brands like Xiaomi, Huawei, and Oppo.
INTRODUCTION
A smartwatch, much like a smartphone is a portable device designed to carry a miniature version of a computer around your wrist. Most smart watches today when connected with a smartphone via Bluetooth or an internet connection, enable the user to check notifications, make use of different apps, answer calls, text, track fitness levels, navigate locations, etc thus proving to be a one tool kit.
IoT-driven smartwatches are a key trend that will not only operate as a standalone technology but interact with other IoT-devices to vastly improve a user’s quality of life.
The Kaa IoT platform complements wearable technology, such as smart watch with superb ready-to-use IoT functions and applications. Kaa is easily integrated with tiny microchips in wearable devices. It enables instant interoperability, device management, data collection, events and rules execution, security, and other features, which will drive the market in future.
GLOBAL SMARTWATCH MARKET DYNAMICS
Although digital watches have been in the market for decades, some with unique features like built-in calculators and unit converters. It was only in the later 2010’s that tech companies entered this market segment when Pebble Smartwatch introduced its first smartwatch in 2012 and gained immediate popularity.
Later, advanced technology brought the revolution in the smartwatch industry, with Apple announcing its first ever Apple watch series in April, 2015 providing momentum to the smartwatch industry globally. Many other players were quick to enter the new market niche.
Advances in silicon miniaturisation and technology further led key players like Apple, Google and Samsung to foster the use of their own operating system and provide greatly customised products to their consumers to meet specific needs and opened doors to other kinds of dedicated- purpose smartwatches leading to an overall increase in smartwatch volume globally.
Google WearOS continues to account for 10% of the total smartwatch market, behind Apple WatchOS. Huawei’s Lite OS and Amazfit’s Amazfit OS are growing fast. Further, the cellular-capable smartwatch is becoming more popular and accounts for more than one in four smartwatches shipped, benefitting the likes of Qualcomm. Heart rate monitoring now is featured in almost 60% of the smartwatches.
Fall detection and SPO2 are the features that should see mass-adoption in future models. Square form-factor accounts for almost two-thirds of the smartwatches globally as the form factor is helping to better fit additional sensors and needed battery footprint.
The massive leaps in battery life and processing power are helping to better track overall health as continual heartrate, sleep and other monitoring can be done instead of the device sitting on a charger. The leaps in solar charging technology will also help OEMs concentrate on better monitoring. It is expected to continue to see a focus on fitness and wellness applications.
Increase in health awareness among the consumer is driving the market. Consumers across the world are spending a lot on health monitoring gadgets. The recent Apple watch series 4 can track heart rate, nervous system, emergency, or inactivity alerts, and health-related events. Using smartwatch, a user can take the required precautions in advance by consulting doctors. Doctors can easily track patient health status remotely through the smartwatch and can treat them as per the requirement.
Increasing demand for wireless sports and fitness devices is driving the market. Currently, the use of smartwatches among cyclers, runners, gym-goers, swimmers, and athletes is increasing rapidly, owing to their wide range of monitoring capabilities. The wireless synchronization of these watches with smartphones enables users to control music, notifications, alarms, auto sleep, and other functions, which drives the growth of the market.
Moreover, the ongoing technological advancements by market players are also stimulating the growth of smartwatches, as they are technical products that require constant R&D for different features. In 2019, Fossil launched the Fossil Sport smartwatch. This smartwatch is powered by Qualcomm Snapdragon Wear 3100 processor and runs the newly-redesigned Wear OS by Google. This product is ideal for all health and activity enthusiasts.
US SMARTWATCH MARKET
As consumers around the globe are willing to spend more on portable devices that can perform features like monitoring your diet, heart rate, pulse rate, distance counts, etc., the demand for smartwatches is on the rise.
Furthermore, with outdoor activities cut down, a wearable healthcare device which is easy and fashionable to carry has proven favourable for athletes, gym goers, fitness freaks and sports persons alike, thus attracting new tech players to enter this promising field.
In Oct 2019, Google (owned by Alphabet) made an offer to acquire U.S. wearable device maker Fitbit Inc.
Fitbit, pioneered the wearable devices trend, is now partnering with health insurers and has been making acquisitions in the healthcare market, to diversify its revenue stream. In Aug 2019, it launched a new product, Versa 2, with new features like voice assistant Alexa, online payments and music storage.
INDIA SMARTWATCH MARKET
In India, smartwatch is a consumer product that is viewed as an amalgamation of state-of-the-art IT and an everyday fashion item. A watch is regarded as a kind of luxury jewel for many and therefore a smartwatch serves as a symbol for wealth and fashion for many potential customers in the upper section, thus driving more sales for the smartwatch market.
India based Titan, world’s fifth largest watchmaker, manufactured 18 million watches last fiscal, of which about 700k units were smart wearable devices.
In June 2020, Chinese brand Realme sold over 15,000 smart watches (priced at $50), in less than two minutes during its first sale on both Flipkart and Realme.com. The watch had features like with real-time heart rate sensor and SpO2 monitor for blood oxygen levels. It also had 14 different sport modes, including cricket, yoga, walking, running etc.
COVID-19 has muted the pace of growth for smart wearables in India as a sizeable chunk of urban population is now working from home and having limited physical activity.
GLOBAL SMARTWATCH MARKET SEGMENTATION
By Geography
- US
- China
- Russia
- India
- Saudi Arabia
- France
- Germany
- UK
- Japan
- South Korea
- Rest of the world
By Application
- Personal Assistance
- Medical/Health
- Wellness
- Sports
- Miscellaneous
By OS
- iOS
- Android
- RTOS
- Tizen
GLOBAL SMARTWATCH MARKET SIZE AND FORECAST
Global smartwatch volumes grew 20% YOY to 12.5 Million units in Q1-2020. But Q2-2020 is likely to reverse this trend as many outlets remained shut and e-commerce was hampered in many locations.
The smartwatch space remains a popular consumer device segment, compared to the downturn seen in smartphone demand and many other segments in the first six months of 2020 due to the devastation caused by COVID-19.
Close to 42 million smartwatches were shipped in the first half of 2020 as wearables continue to see greater demand with consumers becoming more health conscious. India (+57% YoY), Europe (+9% YoY) and the US (+5% YoY), the most affected regions of COVID-19, saw a healthy growth in smartwatch shipments which offset the decline in other markets
The Fitness and Medical Application is expected to gain the highest popularity as compared to other features, considering the current market trends.
The global smartwatch market is estimated at $XXM in 2020 growing at –% CAGR till 2025
Price band dynamics during Q4 2020 indicate ASPs [average selling prices] are on the rise. The ASPs are likely to continue to rise in the upcoming two to three years with the flagship models of Apple, Samsung and Huawei leading the market. Soon, other brands focusing on budget products like OPPO and Realme are going to enter the market, thereby lowering the overall price range but also making the competition more intense.
UPCOMING AND LATEST SMARTWATCHES IN THE MARKET
Smartwatches are a revolutionary property in tech right now, and despite still being early in 2021, there are plenty of upcoming devices to get excited about.
The focus in the early part of 2021 will be on budget smartwatches, as the quality of sub-$100 devices improves.
That’s until the likes of Apple, Fitbit and Samsung look to refresh their line-ups in the second half of the year.
This affordable arms race is being driven by the same companies that tore up the rulebook for smartphones: the likes of Oppo, OnePlus, Xiaomi, ZTE and Huawei are all the busiest when it comes to new smartwatches.
- Xiaomi Mi Watch Lite: ETA: Out now Europe/UK/Asia
It features a 1.4-inch, 320 x 320 display and promises up to 9 days in full smartwatch mode and 10 hours of GPS tracking. It looks a little boxy, and isn’t expected to have a full AMOLED display, with just a colour TFT screen mooted. There’s a heart rate monitor, GPS tracking and 11 sports modes with notification support, music controls and weather reports among its smartwatch abilities.
- Xiaomi Mi Watch: ETA: Out now Europe/UK/Asia
It weighs in at 32.5g and boasts a 1.39-inch AMOLED display, with a 454 x 454 resolution. It’s packed with sensors and has a big focus on sports tracking. Users will find a heart rate sensor and GPS, which enables them to track activities with 117 sports profiles. It also packs in SpO2 monitoring too.
- Wyze Watch: ETA: Delayed
The $20 Wyze Watch comes in 44mm and 47mm size options with the smaller Watch packing a 1.4-inch LCD display and the larger option including a 1.75-inch screen. Features-wise, one can expect daily activity tracking at the top of the list including sleep monitoring.
It also finds room for a heart rate monitor and SpO2 to measure blood oxygen levels. It will also offer shortcuts to other Wyze devices, though unlike its Band there’s no Amazon Alexa on board.
- OnePlus Watch: ETA: 23 March
Run Wear OS and the teaser pictures from the OnePlus tweet indicate it will have a round design and sporty strap.
- Huawei Watch Fit Elegant: ETA: Out now
The Huawei Watch Fit Elegant adds stainless steel finishes in rose gold and silver and the company has added 24/7 SpO2 tracking into the mix, which also rolls down to the older Watch Fit Active.
The Watch Fit is the company’s fitness tracker and smartwatch hybrid, with a tall 1.64 inch, 456 x 280 AMOLED screen. It’s certainly unique looking, and aimed at those looking for a device to workout at home.
- Amazfit T Rex Pro: ETA: March 2021
The T-Rex Pro doesn’t appear to change much on the surface and retains the 47mm case and chunky build of the original. But the company is adding its new Bio Tracker heart rate sensor which will offer SpO2.
Software features are still TBC, and it is expected to have the same stress tracking and blood oxygen monitoring seen on the company’s smartwatch offerings.
- Moto G / Motorola One / Moto Watch: ETA: June/July 2021
Those materials suggest a Snapdragon 3100 powering Wear OS, with 1GB of RAM and 8GB storage. It’s very much the Moto 360 reimagined, out for a fourth generation.
The Moto Watch looks to have a square design and a passing resemblance to the Apple Watch.
And the Motorola One seems to be a premium version better material, and more rumours suggest it will run the latest Qualcomm Snapdragon Wear 4100 platform. Both the Moto Watch and Motorola One are set to be launched in July 2021.
- Realme Watch 2: ETA: TBC
The Realme Watch launched for $50 back in early 2020, and it’s been spotted at the FCC with a 1.4-inch 320×320 TFT display that should offer a boost in quality. Elsewhere, the Realme Watch 2 could sport SpO2 and heart rate.
It seems like a decent visual upgrade over last year’s model, offering improved screen clarity and performance – and we’re expecting the same super-low-price tag.
- Garmin Lily: ETA: Out now
Garmin has launched a new smartwatch, firmly and unapologetically aimed at women. The Garmin Lily comes with a 34mm case, which makes it Garmin’s smallest smartwatch and one of the daintiest on the market.
There’s no GPS but one gets the stress tracking, heart rate, Body Battery energy levels, sleep monitoring from the likes of the Venu Sq. – and there’s workout tracking modes which can take advantage of connected GPS from a paired smartphone. There’s also Garmin’s two leading female focused features: cycle tracking and pregnancy mode.
- Zepp Z Titanium with ECG: ETA: On sale in China now / Global TBC
Huami, which also makes the Amazfit brand watches, launched its Zepp E Square and Zepp E Circle watches and followed up with the more luxury-looking Zepp Z in November, which we are currently testing.
It’s since announced a Zepp Z model in China that includes a desirable feature in the way of an ECG sensor. That means it matches the likes of Fitbit, Apple, Samsung and Huawei in offering medical grade-style heart rate readings with the view of detecting abnormalities in the heart among other more serious heart health insights.
Like its ECG-packing rivals, it’s only available in China right now, so it remains to be seen whether it will launch elsewhere as it’ll need to wrap up the appropriate regulatory approval to set the feature live.
THE WAY FORWARD
Hybrid smartwatch -fusion of a traditional mechanical watch with a smartwatch is the way forward. A hybrid smartwatch offers the basic features of a smartwatch, equipped with Bluetooth connectivity but resembles a normal watch with some added features like that of a calorie tracker and heart rate tracker.
Consumers, who do not need a complex smartwatch facility have shown interest in this product as it does not require much prior technological knowledge or long hours of charging to make optimal use of the product. Therefore, this segment holds a scope for huge growth for the players operating in the market.
COMPETITIVE LANDSCAPE
In Q1-2020, Apple Watch led the global market with a market share of 55%, followed by Samsung and Garmin rose to third position.
With tech giants hugely investing in R&D facilities to constantly develop new and highly customised devices in the smartwatch industry in order to remain relevant in the market, the smartwatch industry is expected to constantly flourish. For instance, Apple provides innovative features like shock-proof and water resistance capabilities in their new Apple watch series thus attracting great public interest into their products.
New companies are focusing on design and development of new and highly advanced smartwatches. The new products are now equipped with powerful speakers, HD cameras, GPS tracker, Good storage capacity, voice control, thermometers among others. Many of them also feature high-end software that allow a seamless wireless and touch less feature, high-end connectivity, digital mapping and personal organiser.
Apple continued to dominate the smartwatch market both in volume and value. Apple captured a record half of the market in terms of revenue due to strong demand for the Apple Watch S5 models. In terms of shipment volumes, Apple Watch grew 22% globally with Europe and North America being the fastest growing markets in the first half of 2020.
Huawei saw healthy volumes (+57% YoY), jumping to the second spot globally in the first half of 2020. Huawei benefitted from significant demand for its smartwatches, especially the Watch GT2 series in its home market China and Asian markets, with shipment volumes growing 90% in both the regions.
Garmin, the second-largest brand in terms of revenue globally, continued to make strides cornering the sports enthusiast and athlete market. The brand saw healthy demand (+31% YoY) for its Forerunner and Fenix line, making up one of the broadest portfolios of smartwatches in the market. Europe and North America remain the key markets for Garmin.
Among the fast-growing brands, Amazfit (+51% YoY) and Xiaomi (+47% YoY) made healthy strides during the first half with expanding portfolios and better geographic reach. China, India and the rest of Asia remain central to these brands’ growth story.
Samsung faced some headwinds during the first half, but the launch of Galaxy Watch 3 in the second half could drum up some demand for the Korean vendor. Fitbit, Tic watch and Suunto faced some tough competition from Garmin and Apple during the first half and will thus look forward to ramping up initiatives to ignite the demand during the holiday season
COMPANY PROFILES
- Apple Inc
- Fitbit Inc.
- Garmin
- Sony
- Samsung
- Huawei Technologies Co Ltd
- Xiaomi Corp
- Titan
- Fossil
- Oppo
- Realme
- Amazfit
