Market Forecast Wearables - UK, 2018-2022 October 2018 Update - CCS Insight
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Market Forecast Wearables UK, 2018-2022 October 2018 Update
Content
Coverage of the Wearables Forecast
Summary of the Wearables Forecast
Smartwatch Forecast
Quantified Self Forecast
Wearables Categorization
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 2
Coverage of the Wearables Forecast Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 3
Changes to CCS Insight's Wearables Categorization and Forecast Coverage
CCS Insight's wearables forecast currently covers two main categories of wearable device: smartwatches and quantified self devices
– The smartwatch category includes wrist-worn wearables with a traditional watch face or a full-touch display. These products provide
notifications, enhance the usability of a smartphone, or in some cases provide cellular connectivity.
– Sports watches remain part of the quantified self category, which covers fitness trackers (wrist-worn, clip-ons or others), smart
hearables, smart sport shoes and other wearables that are focused primarily on wellbeing or sport-related usage.
– We note the emergence of pet trackers such as Vodafone V-Tag, and child trackers. The numbers are currently very small, but should
they grow, we will assess the need to include these new categories in the forecast.
Each category is forecast in three scenarios: core, low and high, as the market continues to show a great deal of uncertainty
– The core scenario describes the most likely outcome across all categories, given our current understanding.
The summary presents the sum of the forecasts in the core scenario for the two categories
Full definitions of all categories can be found on pages 35-43 of this document
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 4
CCS Insight's Usage-Based Categorization
Smartwatches Quantified self
Virtual and augmented
Wearable cameras
reality
Wearables
Emerging wearables Professional sport
Healthcare
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 5
CCS Insight's Forecast Coverage
Smartwatches Quantified self
Virtual and augmented
Wearable cameras
reality
CCS Insight Market Forecast:
Virtual and Augmented Reality
Devices
Wearables
Emerging wearables Professional sport
Healthcare
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 6
Scope of CCS Insight's Wearables Forecast
Category Smartwatches Quantified self devices
Basic non- Advanced Advanced non-
Sub- Basic cellular
cellular cellular cellular Performance fitness devices Lifestyle fitness devices
categories smartwatches
smartwatches smartwatches smartwatches
Sports watches Wristbands
Form factors Watches
Hearables Tokens
Shoes Clip-ons
Clothes and others Rings and others
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 7
Summary of the Wearables Forecast Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 8
Key Messages
We expect 6.5 million wearable devices to be shipped in the UK in 2018, rising 14% from 5.7 million in 2017. The sell-in value will
reach £0.77 billion in 2018, up 17% from £0.66 billion in 2017
– Shipments of smartwatches will grow to 2.9 million units, driven by the Apple Watch, whose market share we expect to reach
beyond 75%, and by Fitbit.
– Shipments of quantified self devices will decline to 3.6 million units in 2018. Within this, fitness trackers will experience a drop,
partially offset by good sales of sports watches.
In 2019 shipments will rise to 7.1 million units, a 9% increase over the year, and sell-in value will reach £0.85 billion
In 2022, shipments of wearable devices will reach 9.6 million units, growing at a compound annual growth rate (CAGR) of 11%
between 2017 and 2022. The sell-in value will be £1.06 billion, with a CAGR of 10%
– Shipments of smartwatches will hit 4.3 million units, driven by growing adoption and strong replacement demand. Replacement will
be responsible for two out of three smartwatches sold in 2022.
– The quantified self category will remain the largest by volume, at 5.4 million units. Of these, fitness trackers will fall to 2.6 million,
and sports watches will deliver just 0.3 million units, as both product categories come under pressure from smartwatches. On the
other hand, smart hearables will grow to 2 million units in 2022, and smart sports shoes will reach 0.4 million units.
The variety of form factors will continue to grow, especially within the quantified self category
Emerging wearables like pet trackers and child trackers might have an impact on the market, but they are still in their very early days
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 9
Changes from the Previous Forecast
The overall forecast has remained largely unchanged, with shipments slightly down throughout the forecast period. However, within
this the forecasts for smartwatches and for quantified self have changed, offsetting each other's adjustments
Our forecast for smartwatches has been adjusted slightly up
– This is thanks to solid growth of Apple Watch and Fitbit devices and expected uptake of Wear OS devices.
The forecast for quantified self has been revised down
– This is mostly because of a delay in the growth of smart hearables, which we expected to pick up steeply in 2018; this step change in
sales is now expected in 2019.
– Similarly, our expectations for adoption of smart shoes have been delayed by a year.
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 10Installed Base of Wearables Will Reach 28 Million in 2022
Installed base at end of year (M)
30 28.0
25.3
25 Quantified self
22.2
20 18.7 15.2
14.0
15.1 12.4
15 Smartwatches
11.3 10.5
10 8.6
7.5
6.7
4.7 11.4 12.8
5 4.6 9.8
2.9 6.4 8.2
2.9 4.6
0 1.7
2015 2016 2017 2018 2019 2020 2021 2022
Ownership of multiple smart wearables will become common among wearables users. Examples of combinations could be a
smartwatch and a smart hearable; or a fitness tracker, smart hearables and sport shoes
Quantified self is and will remain the most-adopted category. Hearables and sports shoes will drive growth in 2019 to 2022
Smartwatches will continue to see strong growth, mostly thanks to the Apple Watch, but also as other devices grow in distribution
and popularity to target owners of Android smartphones
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 12Shipments of Wearable Devices Will Approach 10 Million Units in 2022
Shipments by category (M)
10 9.6
8.9
7.9
8 7.1 Quantified self
6.5 5.4
5.7 4.9
6
4.4
4.1 Smartwatches
3.6
4 3.7
3.9
2.8
2.4
2 1.6 4.0 4.3
2.9 3.1 3.4
1.3 1.9
1.2
0
2015 2016 2017 2018 2019 2020 2021 2022
The CAGR between 2017 and 2022 will be 11%
The quantified self category will remain the largest by sales volume. Of the 5.4 million units sold in 2022, less than half, or 2.6
million, will be fitness trackers; this compares with fitness trackers' share of 83% of quantified self device shipments in 2018. Smart
hearables will reach 2 million units in 2022, expanding from just 0.1 million units in 2017
Sales of smartwatches will grow, mainly pushed by advanced devices, for which we expect Apple to continue to be the dominant
brand, but Wear OS, Tizen and proprietary operating systems like Fitbit will gain market share. Basic smartwatches will remain niche
in the UK
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 13Smartwatch
Forecast
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 16Smartwatches: Split into Subcategories
Basic Smartwatches Advanced Smartwatches
Smartwatches with basic functionality, mostly smartphone notifications and some activity Smartwatches with multiple functions beyond simple smartphone notifications.
tracking. They feature all or some of the following elements:
They feature all or some of the following elements: Operating system capable of running and installing new apps: Wear OS, Apple
Proprietary operating system WatchOS, Tizen, forked Android or other custom-built systems
Only run pre-installed apps and functions Full-touch colour display
Display types vary: they may feature analogue watch movement with physical hands, a
monochrome or colour digital screen, LED lights or a hybrid of at least two of these
Cellular-enabled devices are typically kids' trackers or elderly trackers.
Non-cellular devices are typically analogue or hybrid traditional-looking watches.
Examples of non-cellular basic smartwatches Examples of non-cellular advanced smartwatches
Fossil Q Garmin Casio Guess Withings Samsung Huawei
Crewmaster Vivomove HR STB-1000 Connect Steel HR Sport Apple Watch Fitbit Versa Galaxy Watch Fossil Q Explorist HR Watch 2
Examples of cellular-enabled basic smartwatches Examples of cellular-enabled advanced smartwatches
LG Wherecom Alcatel Samsung LG Watch Omate SafeMotion Doki Watch
BBK XTC Y01 Galaxy Watch LTE
GizmoPal 2 KidFit MT30 Watch Sport
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 17Expectations for 2018 and 2019: Smartwatches
In 2018, 2.9 million smartwatches will ship in the UK, rising 53% over 2017. Growth will slow down significantly in 2019, with
shipments expected to reach 3.1 million, 6.3% up on 2018. The sell-in value is projected to be £0.52 billion in 2018, rising to £0.55
billion in 2019
Advanced smartwatches will generate solid unit growth: up from 1 million in 2017 to 2.8 million units in 2018
– Apple is expected to continue its growth streak. Our early projections are for shipments in the range of 2.2 million units.
– Having reported solid sales in the first half of 2018, Fitbit is also projected to expand its sales volume in the smartwatch segment, at
the expense of fitness trackers.
– The proportion of cellular-enabled devices will increase to nearly 8% thanks to the availability of cellular variants (especially of the
Apple Watch) throughout the year, and now through multiple mobile operators.
Growth of advanced smartwatch shipments in 2019 will be much less pronounced, up 0.1 million to 2.9 million
– This is because the installed base in 2018 is already high, and we expect a similar number of new adopters in 2019 as in 2018. At the
same time, replacement volumes (based on an assumption of a three-year replacement cycle) are expected to grow only slightly in
2019, following the pattern of a relatively flat market in 2015 and 2016.
Basic non-cellular devices are likely to see some growth, but units will remain small, at 0.06 million in 2018, compared with the total
category volume. This number will grow slightly to 0.09 million in 2019
– Traditional-looking smartwatches with analogue and hybrid displays still have several design problems to solve before the products
become truly attractive to consumers.
Basic cellular devices are niche in the UK market and will remain so in 2019
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 18Quantified Self
Forecast
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 25Quantified Self: Split into Subcategories
Subcategory Definition Examples of current devices
Lifestyle fitness Devices designed to be used every day, all
or most of the time. They measure
everyday behaviours like walking, activity
levels, sleep tracking and calories burned.
Fitbit Alta Huami Amazfit Michael Kors Xiaomi Mi Band 3
HR Cor Access Crosby
Performance fitness Devices designed to measure
performance related to specific sports
and fitness activities. These are usually
running watches, but other examples
include products for swimming, golf,
weightlifting, hiking and more.
Garmin OMsignal Jabra Elite 65t UA SpeedForm
Fenix 5X Smart Shirt Europa
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 26Expectations for 2018 and 2019: Quantified Self
Altogether, we forecast sales of 3.6 million units in 2018, down nearly 8% from 2017, at a value of £0.25 billion
Sales of the largest segment of quantified self devices by volume — fitness trackers — are coming under pressure. They are failing to
transition from early adopters to the next stage of the population. In addition, pressure from smartwatches with more all-round
functionality, which also includes fitness and sports applications, is dampening sales. Specifically, some sales of some Fitbit devices
are moving from fitness trackers to smartwatches
– These trends are likely to continue in the future.
In 2019 we expect the market to recover to 4.1 million units, up 14% from 2018
– One of the key sources of growth will be smart hearables. We project sales of about 0.7 million units in the UK.
We assume that Apple will introduce AirPods with smart functionality in 2019. The move is likely to have a positive effect on the
entire category, expanding overall consumer awareness and sales of competitors' products.
– On the other hand, sales of lifestyle fitness devices, mostly fitness trackers, will fall to 3 million units.
We expect committed users to continue to replace their devices, but some will shift to a smartwatch instead.
Sports watches are expected to see some growth in 2018, as Garmin continues to perform well. Shipments are expected to be 0.35
million units in 2018, but from 2019 onward the pressure on this subcategory will be more intense, as all-round smartwatches attract
some users
We predict the first sales of smart shoes will not appear until 2019, when only 20,000 units will be sold
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 27Quantified Self Devices in Use Will Surpass 15 Million in 2022
Installed base at end of year (M) and as share of population (%), core scenario
16 30%
14
22.8% 25%
12 21.0%
18.7% 20%
10 16.0%
8 13.2% 15%
15.2
10.3% 14.0
6 12.4
7.1% 10.5 10%
4 8.6
4.6% 6.7
4.6 5%
2
2.9
0 0%
2015 2016 2017 2018 2019 2020 2021 2022
The installed base will grow, mostly thanks to new form factors such as hearables and sports shoes, in addition to existing users of
fitness trackers and sports watches
– Smart hearables will offer smart functionality that may or may not be used by the owners, but the attractiveness of high-end
smartphone accessories will provide a supply push of smartness to the market.
We expect many consumers will own multiple devices, for example a fitness tracker and a smart hearable
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 29Growth Will Be Driven by Smart Hearables from 2019
Shipments by form factor (M), core scenario
6
5.4 Other
4.9 0.4
5
4.4 0.3 Footwear
4.1 0.1
3.9
4 3.6 2.0 Hearables
0.1 0.7 1.2 1.6
0.2
3 Tokens, clip-ons, jewellery
2.4
0.1 Wristband
2 1.6 3.3 3.0 3.0 2.7 2.7
0.1 2.6
2.0 Watch
1
1.3
0 0.2 0.2 0.3 0.4 0.3 0.3 0.3 0.3
2015 2016 2017 2018 2019 2020 2021 2022
Wristbands — predominantly fitness trackers — will continue to form the largest proportion of unit sales, but volumes will fall as
users switch to smartwatches
Hearables will emerge as the second-largest form factor in terms of shipments, reaching 2 million units in 2022
– Growth in the segment will be driven by the expected launch of an Apple AirPod product
Sports shoes have good potential as there is a large and growing number of runners in the UK. They also enjoy relatively quick
replacement
Sports watches will be constrained by smartwatches
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 31The Sell-In Value of Quantified Self Devices Will Fall in 2018 But Will Recover
ASP by subcategory (£), core scenario Sell-in value by subcategory (£B), core scenario
0.40 0.38
120 0.35
0.35 0.33
100 0.30
0.30 0.27
80 0.25 0.23
0.25 0.05 0.11 0.16 0.19
0.05
60 0.20 0.16
0.15 0.03
40 0.10
0.10 0.23
0.02 0.19 0.19 0.17
20 0.13 0.16 0.15
0.05 0.08
0 0.00
2015 2016 2017 2018 2019 2020 2021 2022 2015 2016 2017 2018 2019 2020 2021 2022
Lifestyle fitness Performance fitness Market average Lifestyle fitness Performance fitness
The ASP of lifestyle fitness devices will fall further in the coming years, owing to stagnating demand and a proliferation of low-end
products
The ASP of performance fitness devices will drop as the product mix changes to include lower-priced devices such as hearables and
especially sports shoes
The sell-in value of quantified self devices will fall in 2018, following declining sales volume, but will grow to £0.38 billion in 2022
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 32Wearables
Categorization
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 35CCS Insight's Usage-Based Categorization
Smartwatches Quantified self
Virtual and augmented
Wearable cameras
reality
Wearables
Emerging wearables Professional sport
Healthcare
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 36Category Definition and Examples
Smartwatches
Fitbit Ionic
Frédérique Constant
Guess Connect Samsung Galaxy Watch
Fossil Q Smartwatches Fitbit Versa Apple Watch
Watches with smart functionality
They typically rely on being paired with a smartphone and enhance the smartphone experience by providing a secondary screen to
display key information as well as delivering other functionalities, such as fitness tracking, heart-rate monitoring, flashlight and more
Some watches have built-in cellular connectivity, but only a subset can be used on their own, without a smartphone
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 37Category Definition and Examples
Quantified self
Samsung Gear IconX
Misfit Shine
Motiv Ring OMsignal
OMsignal
Xiaomi Mi Band 3 Fitbit Alta HR Withings Steel HR Sport Garmin Fenix 5X
Devices to track and quantify fitness, well-being and other activities or aspects of daily life
They need to sync with another device (a smartphone, tablet or PC), typically via Bluetooth
Examples are fitness bands, clip-ons, watches, hearables (earphones), smart shoes and smart shirts
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 38Category Definition and Examples
Wearable cameras
GoPro cameras
Panasonic Snap
GoPro
Nikon KeyMission 360 Polaroid Cube Pivothead Sony 4K Action Cam
Devices that can be worn or attached to the body and are capable of taking photographs or videos
Some upload content automatically to the cloud through smartphone connectivity
Examples are action cameras and glasses with an integrated camera
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 39Category Definition and Examples
Professional sport
Oakley Instabeat
Zepp Golf STATSorts / GPSports
Riddell Hits Polar Team Pro Reebok Checklight
Wearables specifically designed to quantify or enhance professional sports performance. In some cases they will deliver real-time
information
These devices can also be used for practising and improving specific techniques such as a golf swing or tennis stroke
They link to a smart device or process data independently
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 40Category Definition and Examples
Healthcare
Philips line of health wearables
ReSound Qardio
Neubac Dexcom
Verily (Alphabet) Study Watch
Moticon Nuubo
Devices to track medical conditions, state of health and body functions
This is a complex category with plenty of research and funding
In many countries, these devices require approval by governing bodies
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 41Category Definition and Examples
Thalmic Labs Myo Disney Playmation
Emerging wearables
Gest
Bionym Nymi
Whistle 3 InteraXon Muse Pokemon Go Plus Thync
New gadgets and concepts that do not fit into any other category, have not achieved any significant volume to date or do not have a
clearly sizeable addressable market
Over time, these devices will form new categories, join existing categories or fail
Market Forecast: Wearables, UK, 2018-2022 © CCS Insight 42info@ccsinsight.com
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