Smartwatches lead the market and will gain more dominance of the next couple of years at the expense of fitness bands, a sector of the market that is shrinking, according to the market analysis company.
"More users coming into the smartwatch segment are replacing wristbands with smartwatches,” said Ranjit Atwal, senior research director at Gartner. “While brand leaders, Apple Watch and Samsung Galaxy Watch command premium pricing in the smartwatch segment, lower-priced players such as Xiaomi and Huawei will counterbalance high-priced smartwatches with lower cost smartwatches. We expect average selling prices of smartwatches to decline 4.5 percent between 2020 and 2021."
Worldwide wearable devices end-user spending by type, 2018 to 2021 (millions of dollars). Source; Gartner.
Smartwatches and ear-worn devices will take the lead in terms of shipments in 2020, with smartwatch shipments forecast to total 86 million units and ear-worn wearable shipments reaching 70 million units. The crowded ear-worn wearable market — led by Apple (AirPods), Samsung (Galaxy Buds), Xiaomi (AirDots) and Bose (SoundSport), and new entrant Amazon — remains competitive. Other competitors — such as Nuheara, Microsoft and Starkey — are offering attractive products that fuel demand such as hearing enhancements and over-the-counter hearing augmentation devices.
Smart clothing is also a rapidly expanding sector albeit from a low base. And this is a market that will be enabled by miniaturization. Thus the ability to integrate sensors that can track sleep or medical conditions into bed clothes could market opportunities.