The March 9 Apple event was centred around the announcement of pricing and availability of the Apple Watch line up. The product line is widely expected to spark mainstream consumer interest in autonomous wearable electronics. We expect the total market size of wearable electronics to reach 71 million units globally in 2015, however only 16 million will be autonomous wearables as low cost passive wearable electronics will remain dominant though 2016.
Global Volume Sales of Wearable Electronics by Type
Source: Euromonitor International
In the lead up to the Apple Watch announcement the company has revealed a new medical research platform, a new MacBook, and a significant expansion in content with the addition of HBO Now. The availability of HBO Now on Apple devices and the release of the Apple Watch will be the two biggest factors influencing consumer electronics in 2015.
Apple TV and HBO Now
Integrating Apple software and services in all aspects of daily lives is the overarching long-term strategy for Apple. The company wants to be at the centre of media consumption and communication across a growing range of use cases. With the launch of the HBO Now service exclusively on Apple devices it hopes to make Apple TV a front runner in smart TV platforms. HBO has a wide array of Hollywood blockbusters along with popular original programming that has not previously been available without a pay-tv subscription that included HBO channels. HBO Now makes this content accessible outside of a pay-tv package, and along with the Apple TV price cut should push strong volume sales of the company’s media player as well as Air-Play capable in-home entertainment equipment.
The biggest announcement of the day was the Apple Watch. The new line of devices ranges in price from US$349 to US$10,000 depending on materials used and will have a significant impact on the wearable electronics market in 2015, particularly when it comes to autonomous wearable electronics. User interface design has always been one of Apple’s biggest strengths, as well as one of the biggest problems facing wearable electronics manufacturers. Whether Apple Inc managed to create a wearable device interface that is sufficiently intuitive and non-intrusive to become a mainstream device remains to be seen, but what is clear is that the Apple Watch will have significant developer support and a robust marketing campaign behind it to drive sales. Most importantly the Apple Watch will have the Apple brand behind it which remains a status symbol in China and other emerging markets. These factors along with the integration of services like Apple Pay, that are gaining popularity in the US will add up to volume sales of 10-12 million units in 2015.
The remainder of the expected 16 million units of autonomous wearable electronics will be Android Wear devices. However, simpler passive wearable electronics like the FitBit, will continue to dominate volume sales as the market for passive wearable electronics is expected to reach 55 million units in 2015. In 2016 we expect sales of autonomous wearable electronics to gain significant ground in developed markets, but it won’t be until 2017 that autonomous wearable electronics like the Apple Watch overtake passive wearables globally.
Retail Volume Sales of Wearable Electronics in the US
Source: Euromonitor International