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Global Wearable Device Shipments to Surge 137% in 2015: MIC

Oct 31, 2014 | By Steve Chuang

With global branded vendors such as Apple, Samsung, and Sony introducing a continuous string of wearable electronic devices to the market in 2014, global shipments of such products are expected to skyrocket by 137% to 74 million units in 2015, according to the Market Intelligence & Consulting Institute (MIC), a Taiwan-based IT market researcher.

One of the newly launched wearable electronic products, Apple's Apple Watch, is widely expected to be the major growth driver for the global market in the years ahead. Although the Apple Watch has been criticized for not being impressive enough to live up to the firm's high reputation for innovation, market observers generally believe that it still has a strong potential of becoming the hottest seller in the segment, primarily because of the large number of “iDevice” lovers around the world.

MIC predicts that global sales of the Apple Watch will amount to 26-30 million units next year, based on its assumption that 10-20% of current iPhone users will adopt the new device. If that prediction turns out to be accurate, Apple will command over a quarter of the segment and outstrip Fitbit, currently the largest supplier of smart wristbands, as well as Samsung, currently the dominant player in the field with its Galaxy Gear watches.

For wearable electronics as a whole, MIC forecasts that global shipments will shoot up to 112.7 million units in 2016 and 194 million units in 2018, resulting in a compound annual growth rate of 72.6% for the 2014-2018 period. The research institute estimates that shipments this year will total about 31.2 million units, 147% more than in 2013, with smart glasses, smart wristbands and watches, and other kinds of wearable devices making up 5.4%, 73.4%, and 21.2% of the total, respectively. While smart watches are expected to soon outpace wristbands as the mainstream products in the segment, the share of smart glasses is predicted to double to 11-12% in 2018, after such products come to be widely used in hospitals and factories.

While it remains to be seen if wearable electronic devices will prove to be as popular as now expected, many Taiwanese firms are prepared to jump at the business opportunities they offer. For instance, Asus, a globally known Taiwanese PC brand, just unveiled its ZenWatch at IFA 2014, an international trade fair for consumer electronics held on Sept. 5-10 in Berlin, Germany. Acer will not be far behind; it has already announced that its smart watch will be launched next March, emphasizing that it will be less expensive than the ZenWatch.

The emergence of wearable electronic devices may also benefit Taiwan's electronic parts and component industry. In fact, the industry already has a thorough supply chain composed of top-end suppliers of the products, including contract manufacturers such as Hon Hai Precision, Quanta Computer, Inventec, and Compal Electronics; processor suppliers such as MediaTek; micro control unit suppliers such as Nuvoton Technology; communication chipset designers such as Realtek Semiconductor; sensor manufacturers such as PixArt Imaging; display panel producers such as Innolux and AU Optronics; flexible PCB makers such as Compeq Manufacturing; touch panel suppliers such as TPK Holding; memory makers such as Macronix International; and battery manufacturers such as Simplo Technology and Dynapack International Technology.

Among these companies, Simplo, to cite just one example, has confirmed that it will add batteries for wearable electronic devices and other applications to its product lineup beginning next year, hoping to achieve a gross profit rate of over 11%. This suggests that wearable devices are gradually coming to be seen by many Taiwanese electronic parts and component suppliers as a potential booster of their (currently meager) profit margins. (SC)

Forecast Growth in the Global Market for Wearable Electronic Devices
Year
2013
2014
2015
2016
2017
2018
Shipments (million units)
12.7
31.2
74.0
112.7
155.1
194.0
YoY Growth Rate
--
146%
137%
52.29%
37.62%
25.08%
Source: Market Intelligence & Consulting Institute


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