Demand for Wearable Devices is Slowing
Although interest in fitness trackers is diminishing, smartwatches are showing signs of growth.
Part of the problem is that smartwatches can be too expensive, some times starting at around $300. In addition, no wearable device has become a must-have item like a smartphone, eMarketer said. This all suggests wearables have a ways to go to gaining mass market adoption in the US.
“Instead, for this holiday season, we expect smart speakers to be the gift of choice for many tech enthusiasts, because of their lower price points,” eMarketer analyst Cindy Liu said in a statement.
Sales on Amazon are already supporting these findings. On Tuesday, the company said its Echo Dot, which goes for $29.99, was its number one selling product during the holiday season.
But even as customer demand for wearables is waning, the smartwatch category itself is still showing signs of life.
Annual smartwatch shipments across the world will more than double over the next five years, according to research firm IDC. By 2021, they’ll reach 150 million units, up from the estimated 61.5 million expected to ship out this year.
Driving the growth will be new vendors, such as fashion brands, that want to tap smartwatch sales. However, demand for fitness bands will stagnate.
Currently, shipments for fitness bands account for 40 percent of all wearable shipments, but that figure will fall to 21 percent by 2021. “Such wearables are quickly becoming commodities and IDC anticipates low single-digit growth in this category,” it said.
In the US, eMarketer expects smartwatch adoption will experience double-digit annual growth until 2020 as demand falls. By then, only around 10 percent of the population will use smartwatches.