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Putting Smart Watch Adoption in Perspective

Data shows relatively low interest in the category as a whole

June 11, 2015

The wearable device category has all the ingredients needed to ignite a technology revolution, except one: widespread consumer interest. Awareness of wearable devices is up, industry forecasts for growth are high, but consumers’ interest in buying anything besides a fitness tracker is still low, according to a new eMarketer report, “Wearables: Putting Consumer Interest and Device Adoption into Perspective.”

Comparative Estimates: Wearable Device Shipments Worldwide, 2014-2020 (millions of units)

The report compiled and analyzed data from more than 25 third-party studies on wearable device adoption, usage and consumer awareness worldwide, in addition to including insights from approximately 15 interviews with marketing professionals and wearable technology experts.

“Assessing the state of wearable technology is actually becoming more difficult as time goes on,” said Cathy Boyle, senior mobile analyst at eMarketer and author of the report. “The number and variety of products that fall into the ‘wearable’ category and the speed at which the selection of products is expanding are making forecasting difficult.”

Estimates for 2014 wearables shipments made by multiple firms showed a gap of 10 million units between the most conservative and most aggressive projections, eMarketer found. On the fringes, International Data Corporation (IDC) estimated shipments of 19.6 million units worldwide for 2014, while researchers at CCS Insight put the number at 29.0 million.

Wearable device shipment projections for 2015 vary even more widely. IDC forecast global shipments would reach 45.7 million units this year—a 133.2% increase from 2014—whereas CCS Insight estimated 75.0 million wearable devices would be shipped, up 158.6% year over year. Yano Research Institute has taken the most aggressive stance, forecasting shipments of 104.8 million wearable devices this year—more than four times the number the research firm estimated for 2014.

Despite these bullish projections on growth, the fact remains that the figures are still small in a worldwide context.

“No matter how you slice ownership data—as a percentage of the population, internet users or smartphone users—relatively few consumers currently own a wearable device,” said Boyle.

Apple Watch has certainly helped raise consumer awareness of wearable devices as a whole, and eMarketer expects smart watches will lure consumers away from fitness trackers—currently the most popular wearable device by far—but not immediately and not completely. Just as ereaders continue to appeal to hardcore readers, a subset of consumers who are focused solely on monitoring their daily activity levels will likely continue to use fitness trackers over smart watches.

Comparative Estimates: Smart Watch Shipments Worldwide, 2014-2020 (millions of units)

Smart watch shipments are expected to grow rapidly in 2015 on the back of recent product launches from well-known players such as Apple, Samsung, Sony, Motorola and LG, not to mention Google’s introduction of its Android Wear operating system for smart watches. While estimates for smart watch shipments worldwide in 2015 from global research firms vary widely, most fall between Gartner’s prediction of 21.0 million shipments and IHS’s 34.0 million. The outlier, Yano Research Institute, predicted in October 2014 that more than 65 million smart watches would ship this year.

Only time will tell if these devices will become a fixture in the consumer mainstream. In the meantime, comparing smart watch shipment estimates for 2015 (the launch year of Apple Watch) vs. tablet shipment forecasts for 2010 (the launch year of the iPad) provides perspective on how quickly the smart watch market is expected to grow—and the numbers suggest smart watches are taking off faster than tablets did.

In the year the iPad was released, Gartner projected 19.5 million tablet devices would ship worldwide in 2010. Investment firm Piper Jaffray was more conservative in its estimate, projecting 11.32 million shipments for the same year. Projections from research and advisory firm iSuppli, which has since been acquired by IHS, first projected 7.1 million iPads would ship worldwide in 2010, then adjusted its forecast as 2010 progressed, finally settling on a figure of 13.9 million.

In contrast, smart watch shipment projections for 2015 are much higher, ranging from 21.0 million on the low end to 34.0 million on the high end.

Looking at early sales of the Apple Watch vs. the iPad is another interesting point of comparison. Slice Intelligence estimated that 1 million Apple Watches were sold during its first day on the market. It took 28 days for the iPad to achieve that milestone, according to Tractica. By these measurements, the Apple Watch is significantly outpacing initial iPad adoption.

“Even though the Apple Watch has had early sales success, consumer survey data suggests manufacturers, specifically their marketing teams, have significant work to do in convincing the average person that a smart watch is as worthy of their time and money as tablets proved to be,” said Boyle.

For more information on wearable device trends, join eMarketer for a webinar on Thursday, June 25, 2015, at 1pm ET, presented by Cathy Boyle. Register here.

eMarketer corporate subscription clients can view the full report here.

Get more on this topic with the full eMarketer report, “Wearables: Putting Consumer Interest and Device Adoption into Perspective.”

eMarketer releases over 200 analyst reports per year, which are only available to eMarketer corporate subscribers.

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