However, Apple will continue to dominate the global smartwatch market. The total market size of smartwatch segment will be $17.4 billion in 2021. Apple is the main contributors for the revenue growth in smartwatch space.
The new Apple Watch expected in September may enable direct cellular connectivity for interacting with Siri, texting and transferring sensor data when the phone or Wi-Fi is not present.
“We expect other consumer electronics brands such as Asus, Huawei, LG, Samsung and Sony to sell only 15 percent of smartwatches in 2021, because their brands do not have as strong an appeal as lifestyle brands for personal technologies,” said Angela McIntyre, research director at Gartner.
The ASP of the smartwatch category will drop from $223.25 in 2017 to $214.99 in 2021 as higher volumes lead to slight reductions in manufacturing and component costs. Strong brands such as Apple and Fossil will keep pricing consistent with price bands of traditional watches.
Two sub-categories that Gartner expects to perform well are kids’ smartwatches and traditional watch brands. Kids’ smartwatches will represent 30 percent of total smartwatch unit shipments in 2021.
Fashion and traditional watch brands will account for 25 percent of smartwatch units by 2021.
Technology companies will sell 41.5 million smartwatches in 2017. They are on pace to account for the highest unit sales of all wearable device form factors from 2019 to 2021, aside from Bluetooth headsets. By 2021, sales of smartwatches are estimated to total nearly 81 million units, representing 16 percent of total wearable device sales.
Gartner forecasts that 310.4 million (+16.7 percent) wearable devices will be sold in 2017. Sales of wearable devices will generate revenue of $30.5 billion in 2017. Of that, $9.3 billion will be from smartwatches.