Global wearable devices market expected to rebound 6% this year
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According to a new forecast from market research firm International Data Corp. on Monday, shipments of wearable devices, including smartwatches, smart wristbands and wireless earphones, are expected to increase 6.3 percent to 523.2 million units this year.
IDC, however, expected that both shipments and the average selling price could fall in the first quarter of this year due to inventory adjustments. Last year, wireless earphones accounted for 62.1 percent of the market, slowing slightly from 2020 and 2021 when their demand increased sharply due to Covid-19.
“What makes 2023 different is that it marks the start of replacement cycles and there are plenty of devices - available at different feature sets and price points - available,” Ramon T. Llamas, research director for IDC’s Wearables team.
Smartwatches, which accounted for 31 percent of the market last year, with shipments of 162.2 million units, may not be easy to rebound as prices rise across the board amid difficult macroeconomic conditions.
Manufacturers are employing the price polarization strategy of introducing older models or relatively inexpensive smartwatches to the market, while introducing expensive professional and ultra models at the same time. As a result, the range of choices in the mid-priced lineup is narrowing, according to IDC.
IDC also expected the wearable market to grow at an average annual rate of 5.4 percent over the next five years and shipments to reach 644.5 million units in 2027. During the same period, wireless earphones and smart watches are expected to grow at an average annual rate of 5.6 percent and 6.1 percent, respectively, but the smart wristband market is projected to decrease by 1.6 percent.
Furthermore, shipments of augmented reality and virtual reality headset devices are projected to exceed 10 million units this year, up 14 percent from the previous year. The market is estimated to grow 32.6 percent annually through 2027.
“The challenging macroeconomic climate is largely to blame for this year’s lowered expectations, although it will not impact all vendors equally,” said Jitesh Ubrani, a research manager at IDC. “Sony’s new PSVR2 and Apple’s foray into the space will help drive additional volume while new devices from Meta and Pico, expected towards the end of 2023, will build momentum for VR in 2024.”
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