The global wearables market is on track to finish 2022 in a strong position, achieving 12% volume growth year-on-year, according to a new report from Futuresource Consulting. The specialist research firm expects 537 million units to be shipped in the year, generating a retail value of $90 billion.
“While 2022 has delivered a challenging 12 months for the consumer electronics industry as a whole, the wearables segment continues to plot a course skyward,” says Guy Hammett, Senior Market Analyst, Futuresource Consulting. “And this growth is all the more impressive when placed in the wider market context. Supply side issues continued to impact the market in the first half of 2022. This was followed by signs of softening demand in H2, due to the rapidly worsening economic outlook. Plus, 2021 had already set a high bar to beat. Yet despite the odds, wearables have emerged victorious.”
The hearables category maintains its dominance in terms of volume and value, and is expected to account for nearly two in every three wearables shipments in 2022, once all the figures are in. Although Futuresource notes that hearables growth rates have slowed in 2022, a trend that will stretch into 2023, TWS headphones will continue to perform well across the forecast period.
Apple maintains its global hearables lead, with its placement at the premium end of the segment resulting in an unassailable market position. Samsung, Xiaomi, JBL and Huawei also all captured a sizeable share of shipments.
Consumer demand for wrist-worn wearables maintained its strength in 2022, with Futuresource expecting 9% growth in the year, to reach 178 million units shipped. This category faced similar challenges to hearables, although supply side issues continued to improve throughout 2022.
“Wrist-worn wearables continues to be dominated by the smartwatch brands, although sports watches continue to grow at a rapid pace” says Hammett. “Wearable smartphones, activity trackers and wireless watches are all taking a back seat. And we’ve seen plenty of consumer excitement in the market this year, with new releases from tech giants Apple and Google.
“This groundswell of activity underlines the significance of smartwatches to the global tech giants, and the crucial role this category plays in shaping the future of their businesses. Moving forward, our forecasts show demand will remain steady. That’s despite some consumers delaying or choosing to forego purchases completely due to cost of living increases, albeit employment rates should remain strong, certainly compared to previous recessionary periods.”
While premium products from major players such as Apple, Samsung and Google remain strong, that’s only one half of the story. The industry is experiencing demand from both ends of the price spectrum, with a crescendo of lower-cost activity in developing markets adding to the scale of the opportunity.
Futuresource also notes that wrist-worn wearables are reaching a technological tipping point. These devices are increasingly able to proactively improve consumers’ lives, offering actionable insights and sophisticated feedback on a wide variety of biometrics. Such advances have the potential to make wrist-worn wearables far more useful to mass-market consumers, transforming the device into a must-have item for many.
“Looking beyond the current economic crisis, the future remains remarkably bright for wearables as a whole,” says Hammett. “Our forecasts indicate a market size of more than one billion shipments in 2026, with a global market value of nearly $170 billion.”