Analyst forecasts number of devices sold will also grow threefold to more than 245 units, with fitness trackers set for “explosive” growth
The global wearables market is set to treble in size in the next five years to be worth over $25 billion by 2019.
This is according to the new global forecast for wearable devices from industry analysts CCS Insight, which is underpinned by a survey of 3,000 consumers in the UK, US and China, conducted last month.
The forecast, which includes smartwatches, fitness trackers, augmented and virtual reality headsets and wearable cameras, indicates the market is set to grow from 84 million units in 2015 to 245 million units in 2019.
CCS Insight chief of research Ben Wood said: “Smartwatches will remain the main source of wearables revenue, delivering over $9 billion of sales in 2015, Those who labelled Apple Watch a failure need to think again. In its first quarter of sales it accounted for around $1 billion of revenue and we expect sales to continue to rise, particularly in the all-important fourth quarter.
The wearables market is expected to be worth $15 billion this year. Smartphones are predicted to deliver 61 per cent of wearables market revenue in 2015 and account for almost half in 2019.
It said the “explosive growth” of fitness trackers will see sales more than double in volume this year compared to last, with these devices remaining the biggest wearables category by unit sales.
CCS expects China to overtake the US as the biggest market for fitness trackers, reaching 18.5 million units as local brand Xiaomi steps up production of its Mi Band and other suppliers look for growth in the market.
The fitness band market in China is predicted to be twice the size of the US market and 2.5 times that of Western Europe by 2018.
Wood continued: “As we predicted, consumer awareness of wearables in key markets like China, the US and UK has gone sky-high in 2015. We believe this can be attributed to what we are calling the ‘Apple Watch effect’ as well as the growing success of brands such as Fitbit in the US and Xiaomi in China.”
It is also predicting “considerable growth” in wearable cameras. In terms of volume, it said it will remain the third biggest wearables category for the next three years, with 19 million units forecasted to be sold in 2017.
“As smartphone margins gets squeezed to increasingly uncomfortable levels, it comes as little surprise that many manufacturers are turning to wearables in the hope that they will be the next big source of growth in consumer electronics.” added Wood.
“However, we caution that these devices will not be immune from the rapid declines in price and profit margins seen in smartphones. Only those players with huge scale, broad distribution, a strong brand and giant marketing budgets will ultimately succeed.”