Smartwatches are finally gaining some momentum, led mainly by the success of the Apple Watch and much less expensive Asian-made devices, according to research firm CCS Insight. Google’s Android Wear effort, however, is stuck in neutral, the market research firm said in a new report.
Smartwatch sales should hit 71 million devices this year and grow steadily to reach 140 million devices in 2022, CCS said. Apple, which sold an estimated 16 million watches last year, could match the total output of traditional Swiss watchmakers of 24 million units in 2018, CCS added. (Other analyst firms have said Apple (AAPL) matched the Swiss in the fourth quarter of 2017, though not for the entire year.)
“It’s not surprising that traditional watchmakers are looking over their shoulders nervously at Apple given the significant slice of the market it has secured in just three years,” the firm wrote. “But it’s not just traditional watchmakers that are facing pressure from Apple. CCS Insight’s forecast signals that Google-powered Android Wear smartwatches have lost momentum…Google has paid a heavy price for its recent lack of commitment to Android Wear. Attention seems to have shifted to its Pixel smartphones and Google Home products at the expense of smartwatches.”
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Watches running Google’s (GOOGL) Android Wear, including those from fashion-focused companies like Fossil, Guess, Movado and TAG Heuer, sold just under 5 million devices last year and are forecast to reach less than 6 million in 2018, CCS said.
Fitbit has seen demand for its fitness trackers sliding, and introduced its first smartwatch, the $300 Ionic, last year. But it may need to add more features and capabilities quickly to keep pace with Apple, says Ben Wood, director of research at CCS.
Ionic is a “big bet” by Fitbit (FIT) to go beyond trackers, Wood says, “but it will need to quickly add an even more capable device if it is serious about a meaningful position in smartwatches. The bottom line is that Apple is completely dominating the market in terms of volume and value and Fitbit must be concerned by Apple’s increasing focus on health and fitness.”
The market for wearable technology also includes a growing variety of smart and connected wireless headsets for listening to music or giving commands to digital assistants, like Apple’s AirPods which can connect to Siri. The “hearables” market hit 1.5 million last year but could quadruple to 6 million devices sold this year and reach 30 million by 2022, CCS said.