Apple Watch Success Needed for a Smartwatch Mega Boom, New IHS Report Says
May 07 2015 - 10:00AM
Business Wire
IHS forecasts smartwatch market to grow from 3.6 million
shipments in 2014 to 101 million shipments in 2020
The smartwatch market will grow from 3.6 million unit shipments
in 2014, to 101 million shipments in 2020 according to a new report
released today by IHS Inc. (NYSE: IHS), the leading global source
of critical information and insight.
“Apple Watch success will drive the overall smartwatch market,”
said Antonios Maroulis, analyst at IHS Technology. “The smartwatch
will become a key accessory device offered by most leading
smartphone manufacturers seeking to dominate this new profitable
market. We forecast the ratio of smartwatch shipments to smartphone
shipments will increase from 1:500 to 1:20 between 2014 and
2020.”
Apple’s entry into the smartwatch market will benefit all
smartwatch suppliers as Apple’s marketing raises consumer awareness
of the category and explains the benefits clearly. The Apple Watch
will leave an enormous addressable market untapped because the
Apple Watch requires a modern iPhone and has a starting price of
$349 USD. The two billion Android smartphone users and those Apple
customers unwilling to spend so much on a smartwatch is a large
target for Android smartwatch makers.
IHS Technology expects Apple Watch to succeed
In the IHS baseline smartwatch forecast, Apple’s 2015 Apple
Watch shipments will hit 19 million units, or 56 percent of the
total smartwatch market. Over time, IHS forecasts Apple’s share of
the market will fall to 38 percent in 2020 as other smartwatch
makers refine their products and successfully serve the vast
Android smartphone market, which Apple chooses not to address.
Google’s Android Wear will ship 96 million units over the next
five years, leveraging the vast Android smartphone installed base.
Should Google add iPhone support, it will increase its addressable
market still further, the IHS report says.
“Should Apple stumble with its foray into smartwatches, the
smartwatch market will suffer similarly. Smartwatches could then
follow the fate of Google Glass. Without Apple and its marketing
strength, the smartwatch category needs greater marketing spend
from other smartwatch makers to overcome damage to consumer
perceptions,” forecasts Ian Fogg, senior director of Mobile &
Telecoms at IHS. “Apple’s smartwatch competitors need the Apple
Watch to succeed.”
Apps will drive smartwatch market
“Delivering a wide range of apps will be critical for smartwatch
success,” Maroulis said. “Apple’s and Google’s success with
existing smartphone application stores will give them an invaluable
head start over challengers.”
Apple has an advantage in smartwatches because of the quality
and range of apps for iOS devices such as the iPhone and the iPad.
Similarly, Google has a head start because of the Google Play
Android app store. Device makers may find tactical success in the
short run with proprietary OS platforms such as Pebble or niche
open platforms such as Tizen which Samsung supports. But in the
long term, only standard platforms that are supported by many
hardware makers will deliver sufficient scale to prove attractive
to app makers.
Because of weak app ecosystems, IHS forecasts other smartwatch
OS devices, excluding Apple and Android Wear, to amount to just 40
percent of smartwatch shipments in 2020.
About IHS
(www.ihs.com)
IHS (NYSE: IHS) is the leading source of insight, analytics and
expertise in critical areas that shape today’s business landscape.
Businesses and governments in more than 150 countries around the
globe rely on the comprehensive content, expert independent
analysis and flexible delivery methods of IHS to make high-impact
decisions and develop strategies with speed and confidence. IHS has
been in business since 1959 and became a publicly traded company on
the New York Stock Exchange in 2005. Headquartered in Englewood,
Colorado, USA, IHS is committed to sustainable, profitable growth
and employs about 8,800 people in 32 countries around the
world.
IHS is a registered trademark of IHS Inc. All other company and
product names may be trademarks of their respective owners. © 2015
IHS Inc. All rights reserved.
IHS Inc.Amanda Russo, +44 208 276
4727amanda.russo@ihs.comorPress Team,
+1-303-305-8021press@ihs.com
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