SAN FRANCISCO — Growth in wearable electronic device shipments is expected to slip below 10% for the first time in 2018 before returning to double-digit percentages each year from 2019 to 2022, according to market research firm IDC.

IDC (Framingham, Mass.) forecasts that shipments of wearables — including smart watches, wristbands, earwear and other devices — grow to 122.6 million units this year, up 6.2% from 115.4 million units last year. IDC blamed the lower growth on continued softness in sales of basic wearables — devices that do not run third-party applications.

"The slowdown in the worldwide wearables market is a sign that this is a market in transition instead of a market in slowdown," said Ramon T. Llamas, research director for IDC's Wearables team, in a press statement.

Llamas said vendors are moving beyond first-generation devices, bringing together ecosystems of partners and applications. "The wearables of tomorrow will play a more prominent role in communication, digital health care, home IoT and enterprise productivity that will make last year's wearables look quaint," Llamas predicted.

Apple Chief Operating Officer Jeff Williams introduces the Apple Watch 4 at the company's event last week. Source: Apple
Apple Chief Operating Officer Jeff Williams introduces the Apple Watch 4 at the company's event last week.
Source: Apple

IDC forecasts that wearable device shipments will increase at a compound annual growth rate (CAGR) of 10.6% between 2018 and 2022, reaching 190.4 million units.

"The shift from basic wearables to smartwatches is well on its way," said Jitesh Ubrani senior research analyst for IDC Mobile Device Trackers. "With it, we anticipate far greater diversity in terms of design, feature set, brands, and most importantly, price points than ever before.

IDC Quarterly Wearable Device Tracker September 2018

 Ubrani said IDC expects growth to come from sub-$200 smartwatches as well as new products as kid's brands, fashion brands and sports brands.

"Although kids’ wearables have been a phenomenon in the Asia/Pacific region, they are just beginning to emerge in Europe and Latin America with the North American market to follow," Urabni said. "Meanwhile, the third generation of WearOS watches are expected to make a small splash this holiday season and gain traction throughout 2019."

Worldwide Wearables Forecast 2018 Q2

 IDC forecasts that the shipments of smartwatches will reach 46.2 million this year, up 39% compared to 2017. The firm expects smartwatch shipments to grow at a 19.5% CAGR, reaching 94.3 million in 2022 and accounting for nearly half the wearables market.

Shipments of smart wristbands are expected to remain roughly flat from 2018 through 2022, but IDC expects the devices to continue to play a significant role in the wearables market. Shipments of earwear — electronic devices that feature functionaility beyond simple audio such as fitness tracker/coaching devices and real-time language translation — are expected to grow fastest of all wearables categories over the five-year forecast period, IDC said.

Worldwide Smartphone Forecast by OS

 

— Dylan McGrath is the editor-in-chief of EE Times.