The wearable market is set for rebound after a brief slowdown last year, according to the latest IDC figures. New vendors, emerging form factors, and an expanded number of retail outlets is expected to drive worldwide wearable device shipments from 102.4 million in 2016 to 237.5 million in 2021, representing a five-year compound annual growth rate (CAGR) of 18.3%.
"With the shift towards watches and clothing, the need of a fashionable design will take center stage," Jitesh Ubrani senior research analyst for IDC Mobile Device Trackers said in a statement. "Tech companies will be forced to step up their game and offer a wider selection of sizes, materials, and designs in order to appeal to a broader audience. We also expect more tech vendors to partner with fashion brands for their creativity, and equally important, their distribution network. In doing so, wearables will be made available to a previously unaware auidence – one that frequents fashion outlets over tech outlets."
Beyond the wrist, earworn devices are also poised for growth with both new startups and traditional headphone companies incorporating additional capabilities beyond audio. However, volumes will remain somewhat modest as the primary features of health and fitness tracking "hearables" overlap with the more popular wrist worn devices.
Meanwhile, connected watches struggle to hit the mainstream consumer due to limited and unclear value proposition to a broad base of potential users. "Most potential customers saw watches performing multiple functions, but none of them worked exceptionally well to accomplish a myriad of tasks," Ramon T. Llamas, research manager for IDC's Wearables team, said.
Going forward, IDC expects watches to hyper-segment into specific niches, including connected kids' watches, athletic watches, luxury and fashion watches, and lifestyle watches that better address different segment needs, such as communication, health and fitness, or as smart luxury and fashion timepieces. And this same approach may be applied to other emerging products, like smart clothing and the mentioned earwear.