Wearables Market Fights Off COVID-19, as Device Ecosystems Shape the Future

COVID-19, Wearabe, Smartwatch, Hearable, Google, Apple

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From hearables to smartwatches, the wearables market continues to trend upwards as consumers seek out increasingly complex, feature-rich devices. Between wrist-worn wearables, hearables and XR displays, Futuresource’s research and market tracking highlights a total of 260 million devices shipped in 2019, with growth propelling the market to become the second largest segment of consumer electronics in volume terms over the next five years.
Despite the global impact of COVID-19, the wearables market remains robust and is expected to achieve strong growth in 2020. The market’s outlook is bolstered by the emergence of a connected device ecosystem, driven particularly by growing consumer demand for smartwatches and hearables, which is expected to be leveraged by vendors to seamlessly connect and share functionality between devices. The hearable and smartwatch combination offers significant potential, with the duo providing comfortably worn processing power, network connectivity and a graphic user interface on the wrist, while hearables offer the potential for audio and voice commands, media access and more accurate biometric tracking in the ear. Through further feature development, vendors are expected to create a strong market appeal for attachment of these devices, leading consumers to question whether a smartphone is necessary on a day-to-day basis.
Currently, the wearables market is dominated by Apple, due to the success of its Apple Watch and AirPods, with Samsung and Fitbit following in its wake. The cohort of brands using Google’s Wear OS have struggled to gain any foothold in the market, yet Google’s pending acquisition of Fitbit, if approved, will trigger a shift in the competitive landscape, with Google’s extended presence challenging Apple. The acquisition of Fitbit, and its more recent acquisition of smart glasses developer North, will turn Google’s wearables platform strategy into a reality and could become a major strategic advantage over its competitors.
With both Apple and Google vying for market share of body worn devices, the battle, while fought through hardware, becomes equally a platform challenge. The expansion of these markets will drive further consumer buy-in to the respective companies’ other products and services, and importantly for Google, an additional data feed and opportunity for its advertising business. To succeed in driving this platform, however, undeniable benefits of use must be demonstrated to the consumer.
Application development will be crucial to the success of this platform. So far, wearables growth has been dependent primarily on the expansion of biometric and activity tracking, with the integration of these features, such as heart rate sensors, increasingly commoditised to the point of becoming a necessity across the majority of wrist-worn categories. Fitness features are expected to remain a central pillar to wearables growth, with hearables expected to leverage this trend to support product adoption.
Other applications beyond sports, however, are also expected to drive mass market product expansion. Communication and location-based services, enabled by LTE connectivity, are key potential stimulants of further market growth. With the prospect of these features becoming central to the wearables offering, it is certain that wider digital platform providers will invest in these areas, such as Facebook, Amazon and Tencent, seeking to dethrone Apple and Google in the next mobile technology paradigm.
For up-to-date information on the wearables market, Futuresource delivers regular reports which provide global insights and analysis on the competitive environment, market developments, product uptake and characteristics.

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