Gartner Forecast: Wearable Device Revenue Projected at $28.7 Billion
Smartwatch Revenue Expected to Grow 30% Annually from 2015 to 2017

Gartner Inc., a global IT consulting firm, forecasted that global wearable device shipments in 2016 would reach 274.6 million units, an 18.4% increase from 232 million units in 2015 (refer to Table 1). Wearable device revenue in 2016 was projected to reach $28.7 billion, with smartwatches accounting for $11.5 billion.

Angela McIntyre, principal research analyst at Gartner, stated, "Smartwatch revenue is forecast to grow 30% annually from 2015 to 2017. This is because Apple has established wearable devices as a trend that can be used in daily life. Among wearable devices, smartwatches possess significant potential profitability and are expected to see revenue reach $17.5 billion by 2019." She added, "While smartwatches will show the most pronounced revenue growth among wearable devices, adoption rates will remain significantly lower compared to smartphone sales. In 2016, smartphones sold in mature markets and major urban areas of emerging market countries such as Hong Kong and Singapore are projected to reach 374 million units in total."

▲Samsung Electronics launched new rose gold and platinum models of the 'Gear S2 Classic' on the 31st of last month.

The popularity of fitness wearables, encompassing wristbands, smart clothing, chest straps, sports watches, and other fitness monitoring devices, continues to rise. This is partly attributable to the influence of health promotion programs in the United States.

Research analyst McIntyre stated, "Among fitness wearable devices, sports watches will maintain average retail prices over a long period in the future. Athletes competing in events such as track and field, cycling, and diving will prefer sports watches over smartwatches. This is because the user interface, features, and product durability are designed to suit these sports activities. As sensors and analytics continue to advance, sports watches will offer new features, and this is expected to drive increases in average retail prices."

The global wristband market maintained levels similar to smartwatches in 2015, but going forward, smartwatches equipped with diverse functions such as activity tracking will more strongly stimulate consumer purchasing desire. Wristband manufacturers are simultaneously competing with smartwatches while seeking ways to capture market share from Fitbit, which leads the wristband market. Emerging wristband markets beyond fitness include mobile payments, access control security, safety, and healthcare sectors.


Table 1. Global Wearable Device Shipment Forecasts 2015-2017 (Unit: Million Units)

Head-mounted displays (HMD) initially began as expensive military projects but have now emerged as a rapidly growing new market. In 2016, the HMD market is forecast to expand further targeting both general consumers and enterprise customers.

Brian Blau, principal research analyst at Gartner, stated, "Consumer-oriented virtual reality HMDs such as HTC Vive, Oculus Rift, Sony PlayStation VR, and Microsoft HoloLens will simultaneously provide video games and entertainment content while also driving purchases of applications essential for business success." He added, "Film studios and sports leagues will enhance the quality of existing content through HMD to provide better customer experiences. To achieve this, interactive entertainment, movies, and sports events that generate personal and meaningful content will be produced."

By 2018, 26% of all HMDs will be designed for enterprise use, and corporate HMD adoption rates are forecast to continue increasing. Enterprise customers will purchase enterprise HMDs for employee use in tasks such as repair, inspection, and maintenance work. Using these devices, workers will be able to read various instructions without using their hands while performing their tasks.