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.
The report argues that Apple Watch success will drive the overall smartwatch market. “The smartwatch will become a key accessory device offered by most leading smartphone manufacturers seeking to dominate this new profitable market,” says Antonios Maroulis, analyst at IHS Technology. “We forecast the ratio of smartwatch shipments to smartphone shipments will increase from 1:500 to 1:20 between 2014 and 2020.”
After all, 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.
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.