Wearable Technology Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Wearable Technology Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The Wearable Technology Market was valued at USD 27.91 billion in 2020 and is expected to reach USD 74.03 billion by 2026 and work at a CAGR of 17.65% over the forecast period (2021 - 2026). The wearable technology has evolved owing to the emergence of MEMS sensors. Incorporating these sensors into a dedicated wearable device driven by the impact of smartphones being used daily, on the GPS, or the IMU (consist of accelerometer, gyroscope, and magnetometer). These have helped the fitness tracking wearable to monitor body activities using these sensors.

• The smartwatch category is also experiencing a rise, owing to the additional features, like the brand that suits the everyday lifestyle. Strong brands, such as Apple and Fossil, are keeping the pricing consistent with the price bands of traditional watches, to maintain their revenues. With Google's WearOS, many other premium watchmakers, such as TAG and Armani, have entered the segment. For instance, according to Cisco Systems, the global number of connected wearable devices is expected to reach 1,105 million by 2022, from 593 million in 2018.
• Smartwatches are seeing a surge in new users, including the older population, because wearable makers, such as Apple and Fitbit, are adding health-monitoring features that appeal to older people and keep them updated about their health status in real-time. For instance, Apple features a fall detection app and an EKG monitor to the Apple Watch Series 4, while Fitbit added a feature to detect sleep apnea. The next-generation of Apple watches is expected to feature glucose monitoring for people with diabetes. The company also collaborated with L'Oreal to design the first skin sensor that detects UVA and UVB exposure.
• In the completed the fiscal year 2019, Apple Inc. got nearly as much revenue from sales of its collection of wearable products and accessories as it arrived from selling its old Mac computers which appears well on its way to becoming its second most significant line of products after the iPhone and its third-largest business category overall after its smartphone and services segment. The company's booming wearables and accessories segment helped to make up for the declining iPhone sales. In the period, sales of wearable and accessories products grew 54% in the last quarter of 2019 compared to the prior year to USD 6.5 billion.
• New entrants are expected in 2020 and beyond, and Amazon is reportedly making efforts already. In 2019 April, it was reported that Amazon was venturing into the wearables business with Alexa-enabled earpods. The entry of Amazon is likely to pose fierce competition to the existing players in the wearables segment. Amazons earbuds, an output of Amazon's hardware division, Lab126, are reported to have gesture controls for accepting calls and controlling music. However, with the growth of smart wearables' technological capabilities, the complexity and data security concerns are likely to act as challenges for market growth. Nevertheless, the on-going research in the smart wearable space is expected to address these challenges over the coming years.
• The impact of COVID-19 on the wearable segment is expected to have a significant effect in 2020, and the first two quarters of the year following it as the supply chain has experienced a considerable disruption owing to the Covid-19 being declared as a pandemic. Asian countries such as China, India, South Korea, Taiwan, Japan who have a significant presence of manufacturers of the raw materials used in wearable products manufacturing has experienced lockdown and have impacted the production schedules. The sales have been down as the lockdown in most global economies has resulted in deliveries limited to essentials and has resulted in companies revising their revenue targets.

• Owing to augmented, virtual, and mixed reality, digital projections are overlaid to real-life objects, providing contextual information, and allowing users to manipulate their surroundings visually. While these technologies are possible through smartphones, tablets, and a host of other mediums, Head Mounted Displays (HMDs) have become more popular.
• Immersive HMDs are primarily used to experience virtual reality (VR) and augmented reality (AR). Mainstream usage by the consumers has been limited due to cost, availability, ergonomics, unfashionable design, and other factors. The primary driver for AR HMDs is enterprise usage, where they are used internally as hands-free tools for business process improvement and training.
• Moreover, the gaming industry across the world is increasing. For instance, according to the Ministry of Science and ICT South Korea, VR and AR gaming in the country is expected to reach KRW 5.7 trillion by 2020. Similarly, in the MENA region, the market size of virtual reality gaming is expected to increase to USD 6000 million by 2020 from USD 181.59 million in 2017, according to The National (UAE).
• Major gaming console manufacturers like Nintendo and Microsoft have realized the potentiality of AR and are leading the charge. AR can free gamers from ‘their world’ and usher them into the real world to play. For instance, Human Pac-Man is a game that allows the users to wear goggles and chase each other in real life, just resembling the characters in Pac-Man. Many gamers feel that just holding a mobile device is not good enough for AR gaming. Console devices can make it up to that, to an extent.
• A report survey conducted by Ericsson Consumer Lab (2019) on 7,000 people aged between 15–69 in Brazil, China, France, Japan, South Korea, the United Kingdom, and the US, indicated that two out of three participants were interested in immersive AR gaming. Around 32% of the users agreed that AR games would be more interesting if AR technology is combined with physical activity and exercise.

• North America is known as the hub for all significant technological improvements in the world. With the advent of smart gadgets, the demand is growing for more powerful and sophisticated wearable technologies. The growth in disposable income and the rapid adoption and popularity of enhanced devices are some of the primary drivers of this geographical region. Moreover, the region has a strong foothold of wearable vendors, such as Apple, Fitbit, and Garmin, among others, adding to the growth of the market.
• The growing investments by numerous sports associations to eliminate the possibility of any preventable injuries of highly paid professional athletes is anticipated to fuel the growth of the wearables in the region. For instance, the US-based basketball team Golden State Warriors is working with smart clothing company Athos to use these products for injury prevention and optimizing the player performance. This investment represents only the fraction of involvement of United States athletics sector in the smart clothing industry landscape.
• Apart from United States, the demand for wearables is also increasing in Canada. The country is expected to provide sufficient expenditure and funding for its military programs (including clothing). In November 2019, Bell applied for patents in United States and Canada that lay out a comprehensive vision for how its wearable technology could be used both by individuals looking to monitor ill loved ones, and by institutions wanting to track large populations.
• The three smartwatch producers Apple, Samsung, and Fitbit, have shot to the top of the watch best-seller list by capitalizing the mid-range of United States watch market. United States sales of smartwatches are booming. They rose 24% in value in the U.S. for the first half of 2019 versus the same period in 2018. That jump comes on top of a 51% increase in dollar sales of smartwatches for the full year in 2018 and a 61% increase in unit sales.

The wearable technology market is highly competitive and consists of significant individual players. However, in terms of market share, companies such as Samsung, Apple, Xiaomi occupy a considerable percentage. The wearable tech industry is also attracting a lot of startups, which, in turn, is intensifying the competition in the market. Thus, to maintain a competitive edge in this market, companies are continuously investing in introducing new products, expanding their operations, or entering into strategic mergers and acquisitions.

• May 2020 - In 2019, Google had spent USD 40 million purchasing an intellectual property from Fossil, and in November 2019, Google parent Alphabet announced that it was buying Fitbit for USD 2.1 billion. The patent application calls for the use of an optical sensor that would be embedded in the body of a smartwatch. The sensor would be able to read gestures made by the watch wearer's fingers, wrists, and arms, and the company is expected to unveil a Pixel Watch in 2020.
• April 2020 - Xiaomi's Huami subsidiary confirmed in a post on Chinese social network Weibo that the Mi Band 5 will see a 2020 release. The company also recently established the Amazfit line would see a new addition called the Amazfit Ares. Huami also confirmed the Amazfit Ares would tout 70 different sports modes and feature a rugged-looking "urban outdoor" appearance.

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