Apple Will Dominate Smartwatch Market Through 2021: Gartner
Apple Inc. (AAPL) will continue to dominate the smartwatch market but will see its market share decline by 2021, according to research firm Gartner, Inc. (IT). Currently, Apple accounts for one-third of the overall market for smartwatches. By 2021, that share is expected to decline to one-quarter of the market. While it does not disclose actual sales numbers, during its latest earnings call, Apple said that its smartwatch sales were up by 50% in the previous year.
On an overall basis, Gartner estimated that sales for wearable devices will grow by 16.7% to 42 million units and $9.3 billion this year. Smartwatches are expected to account for one-third of those sales this year. By 2021, the wearable market is expected to reach $30.5 billion. New product categories such as kids’ smartwatches and the entry of new players such as traditional watch brands are expected to contribute to growth in the market for smartwatches. According to Gartner, kids’ smartwatches will account for 30% of total smartwatch units, while traditional watch brands will garner 25% of the market for smartwatch units by 2021. (See also: Apple Watch vs. Luxury Watches: Which Has the Highest Long Term Value?)
The market for smartwatches has already become crowded in the past couple of years. For example, Alphabet Inc. (GOOG) subsidiary Google has also entered the industry with its Android Wear platform. Unlike Apple, which has brought its vertical integration approach to the smartwatch industry, Google has partnered with established makers of premium watches, such as Movado Group, Inc. (MOV) and TAG Heuer, to make its smartwatches. While the established brands provide manufacturing expertise, Google provides advanced technology capabilities. Samsung Electronics Co., Ltd. (SSNLF), which is set to launch a new iteration of its Gear smartwatch next week, is also expected to take market share away from Apple. (See also: Samsung Surpasses Fitbit in Wearable Device Market.)
Even with all the new players, smartwatches are still luxuries compared with other technology products. The Movado watch costs upwards of $600, while TAG Heuer’s product is worth more than $1,000. The Apple Watch Series 2 costs $549 on the company’s website. Samsung, which offers one of the cheaper smartwatches on the market, retails its Gear product for $199. Those prices will not come down any time soon. According to Gartner, the average sale price of smartwatches will decline by less than $10 in the next four years. The research firm stated that the average price for smartwatches will go down to $214.99 in 2021 from $223.25 in 2017. (See also: 9 Apple Products That Changed the World.)
Published at Thu, 24 Aug 2017 20:16:46 +0000 from Google News