IDC: Wearables Continue to Grow Through 2021

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According to IDC wrist-worn devices-- as in watches and wristbands-- will continue to drive the wearable device market until at least 2021, while lesser-known categories such as clothing and earwear should experience growth in the years to come.

The analyst says 2017 wearable device shipments will total 121.7 million, a 16.6% increase over the 104.4m shipped in 2016. Such growth should continue throughout the forecast period, reaching 229.5m units in 2021 with a 5-year CAGR of 17.2%.

IDC forecast wearables

"We expect the most innovation and development in the wearables market to take place on the wrist," IDC continues. "It's the ideal location for users to collect, view, and interact with data and applications, and the point to execute tasks like responding to notifications or communicating with other people and devices. Layer on top of that varieties in style, design, segment, and feature set, and wristworn wearables are poised to remain well out in front of the market."

Clothing and earwear should also grow as features such as built-in personal assistants or health tracking start to emerge. Other growth drivers include cellular connectivity, improved sensors and algorithms, since such technologies allow vendors to sell wearables through new channels and (more importantly) to new customers.

As mentioned earlier, watches-- both smart (capable of running 3rd party apps) and basic (not able to run 3rd party apps)-- make the majority of the wearables market throughout the forecast. Apple and Android Wear drive the market, but new entrants running on own software should also leave a mark, be it Fitbit or Gartner. Meanwhile basic watches should grow past smartwatch volumes by adding wearable technology to traditional watches.

On the other hand wristbands see a CAGR of just 1.9% for the forecast period, the result of consolidation towards market leaders, declining ASPs and experiences showing little differentiation against each other and market leaders. Still, most wristbands offer a relatively simple and straightforward propositions most customers understand and welcome, and as such will retain a place in the market.

Clothing will trail behind wrist-worn wearables with single-digit market share, but will still outperform the overall market in growth terms. Driving shipments are fitness-tracking clothing for professional and semi-professional athletes, even as consumer interest trails behind due to such features being found in other wearable devices.

Earwear (excluding Bluetooth headsets) also hold single-digit market share, but enjoy the fastest growth of any wearable on the market. The most popular use case is music playback, but customers also appreciate fitness tracking and coaching, real-time language translation and audio modulation.

The final category is "other," covering jewelry, clip-ons, non-AR/VR eyewear and anything else not slotting in the categories mentioned above. These target specific users and are offered by a handful of vendors, meaning total market share clocks at just 2% at any time during the forecast. Still, such devices tend to carry innovative technologies that can be appropriated into other products.

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