Smartwatch Market to Hit $17.8 billion in 2020

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The world’s device makers will ship 20.1 million smartwatches this year, a modest 3.9-percent jump from 19.4 million units in 2015, according to a new forecast released today by IDC. In 2020, shipments are expected to reach 54.6 million, fueling a market worth an estimated $17.8 billion.

IDC research director Ramon Llamas expects smartwatch prices to keep falling, driving demand. Apple, for instance, recently announced the Watch Series 1 with a starting price of $269, compared to $349 when its predecessor was released last year. Models that resemble traditional timepieces will also draw in more buyers, he added.

Functionality matters, too. Llamas predicted that “once the smartwatches get cellular connectivity, they’ll disconnect from the smartphone, making them more useful,” in a statement. On the connectivity front, “smartwatch applications will build on this cellular connection, and connect with other devices within the home and at work,” he added.

Consumers appear to be holding off on buying smartwatches until they become both a little more stylish and user-friendly, observed Ryan Reith, program vice president at IDC’s Mobile Device Trackers practice.

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“Complaints about battery life, smartphone dependency, and minimal use cases have been well versed across most publications and research findings,” said Reith in a statement. “The aforementioned improvements that are rapidly being deployed by most vendors should improve this aspect, but at the same time the increase in devices that have more fashion appeal over technological appeal should also be a catalyst to growth in both smartwatches and basic watches with minimal functionality beyond normal analog.”

IDC expects Apple’s watchOS to win the smartwatch platform wars throughout the forecast period, with shipments of 23.9 million units in 2020 for 43.8 percent of the market. Benefiting from strong industry support, Android and Android Wear is expected to challenge watchOS for the top spot with a 41.8-percent share of the market in 2020 and shipments of 22.8 million devices.

Tizen, supported solely by Samsung, takes third place with shipments of 3.8 million units and 6.9 percent of the market in 2020. Real-Time Operating System (RTOS), used by Garmin but poised to gather more fitness-focused supporters, takes the number four spot (3.4 million units, 6.2 percent market share).

All told, vendors will ship 102.2 million wearables this year, spread across smartwatches and basic devices like fitness trackers. By 2020, shipments will reach 224.4 million units, said IDC.

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.