The nascent smart watch market experienced a period of tremendous innovation and growth during 2014, with global device shipments more than doubling from 2.3 million units in 2013 to 5.0 million units in 2014. A number of prominent industry players launched smart watch products, including Samsung, Sony, Motorola, and LG among others, and Google introduced its Android Wear operating system for smart watches. However, according to a new report from Tractica, the defining moment for smart watches during the year was the announcement of the Apple Watch in September 2014.
Now set for launch in April 2015, Apple’s biggest new product introduction since the iPad is anticipated to stimulate a surge in consumer awareness and adoption of smart watches, contributing 16.7 million units to the annual total of 24.4 million smart watches shipped during 2015, according to Tractica’s analysis. The market intelligence firm forecasts that the smart watch sector will continue to experience strong growth for the next 5 years, rising to 94.9 million shipments annually by 2020, representing a compound annual growth rate (CAGR) of 71%.
“2015 will be the year of the smart watch,” says research director Aditya Kaul. “Since Apple’s announcement, there has been a flurry of activity among competitors trying to position and reposition themselves, and we expect a high degree of experimentation in terms of form factor, functionality, and operating system, offering consumers a wide range of options.”
Kaul adds that companies like Samsung, LG, and Motorola have decided to compete head-on with Apple in the high-end, multi-function smart watch segment. Swatch, the largest watchmaker in the world, has announced that it is launching a smart watch to rival Apple in 2015. Others like Garmin, Basis, and Wellograph will continue to focus on the fitness and wellness markets. And a third segment has emerged that includes incumbent watchmakers like Casio and newer names like Martian and Kairos, who have decided to take a different approach and introduce smart features in traditional watches, both analog and digital.
Tractica’s report, “Smart Watches”, examines global market trends for smart watches and provides 7-year market sizing and forecasts for smart watch device shipments and revenues during the period from 2013 through 2020. The report examines the technology issues, market opportunities, and barriers for smart watches and the relevant application markets including consumer, enterprise, industrial, public safety, healthcare, and sports. A separate analysis is provided around smart watch operating systems and the implications for watch app developers. Key industry players are analyzed in depth, including assessments of their relative strengths and weaknesses. Market forecasts are segmented by world region, application market, and connectivity technology. An Executive Summary of the report is available for free download on the firm’s website.