Fitbit bands and GoPro cameras may have gotten there first, but for many people – and investors — the Apple Watch is the real flag-bearer for the popularity of the growing sector of wearable technology.
This Friday, the first Apple Watches – ones that were preordered earlier this month – will begin to arrive to consumers, and a shortage of supply isn’t expected to hurt demand (it is Apple, after all).
A CNBC.com article earlier this week said that analysts at Strategy Analytics expect Apple to ship around 15 million watches this year, adding that the company will take more than half of global market share for smartwatches this year.1
That sort of reaction may bode well for support of wearables overall, according to analysts at Morgan Stanley. CNBC.com reported that a consumer survey that the investment bank conducted in early March showed that many more American are using wearable devices, and that one-third of respondents plan on purchasing one in the future.
The prevailing view among industry analysts and product experts is that the Apple Watch will not only be a hit among consumers but it will also lift the tide for the entire wearables industry, possibly allowing other competitors to benefit from the rising tide, CNBC.com.
The Wearable Tech motif has gained 19.8% since its inception in January 2014. In that same time frame, the S&P 500 has risen 17.2%.
In the past month, the motif is off 1.9%, while the S&P 500 is off 0.2%. Of course, pricing of the Apple Watch could be key — other products on the market are priced significantly below the lowest-end Apple offering of $349. While premium pricing hasn’t hindered Apple in the past, there aren’t many consumers that consider a smartwatch as critical to their daily lives as they do a smartphone, CNBC.com noted. Whether consumers pay up for a premium, discretionary product that may not be used to its fullest potential remains to be seen.
On a larger scale, however, individual market share winners may be less important than the growth that is expected for the entire sector.
According to the most recent forecast data from the IDC, vendors will ship a total of 45.7 million wearable tech units in 2015, up a strong 133.4% from the 19.6 million units shipped in 2014.2
By 2019, total shipment volumes are forecast to reach 126.1 million units, resulting in a five-year compound annual growth rate of 45.1%, IDC said.
Propelling the market higher in 2015 is an increased focus on smart wearables, or those devices capable of running third-party applications, according to IDC. These include devices like the Apple Watch, Motorola’s Moto 360, and Samsung’s Gear watches.
The total volume of smart wearables will reach 25.7 million units in 2015, up 510.9% from the 4.2 million units shipped in 2014.
Wrist-worn wearables, including bands, bracelets, and watches, will account for more than 80% of all wearable device shipments throughout the forecast, according to IDC.
1Dominic Chu, ” Apple Watch becomes hottest item of the season,” cnbc.com, April 20, 2015, http://www.cnbc.com/id/102602586.
2IDC press release, March 30, 2015, http://www.idc.com/getdoc.jsp?containerId=prUS25519615, (accessed April 21, 2015).