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

With global branded vendors, such as Apple, Samsung and Sony, continually bringing their wearable electronic devices to the market in 2014, global shipments of such products are expected to sharply surge by 137% year-on-year (YoY) to 74 million units in 2015, according to Market Intelligence & Consulting Institute (MIC), a Taiwan-based IT (information technology) market researcher.

Among newly launched wearable electronics, Apple's Apple Watch is widely regarded as the major growth driver for the global market in the years ahead. Although the model is criticized for being not innovatively impressive enough to live up to the firm's superior reputations for innovation, market observers generally believe that the product still has strong potential to become the hottest-seller, primarily because of a large number of “iDevice” lovers all over the world.

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

As to market outlooks of wearable electronics, MIC forecasts global shipments will shoot up to 112.7 million units in 2016, and 194 million units in 2018, with a compound annual growth rate of 72.6% during 2014-2018. This year, the research institute estimates shipments at about 31.2 million units, up 147% YoY, with smart glasses, smart wristbands and watches, and other wearable device models to make up 5.4%, 73.4% and 21.2%, respectively, of the total. While smart watches are believed to soon outpace wristbands as the mainstream products in the segment, the share of smart glasses will double to 11-12% in 2018, after such products are widely used in hospitals and factories.

Although it still remains to be seen if wearable electronic devices will prove to be as popular as expected presently, many of Taiwanese firms have braced themselves for the business chance. For instance, Asus, a Taiwanese globally known brand of PCs, just unveiled its ZenWatch at IFA 2014, an international trade fair for consumer electronics held September 5-10 in Berlin, Germany. Acer won't be far behind the Taiwanese peer. The brand has already heralded the launch of its smart watch model next March and emphasized that its model will be surely cheaper than ZenWatch.

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

Among them, Simplo, for instance, has confirmed that it will add batteries for wearable electronic devices, along with models for other applications, to its lineup beginning next year, so as to attain a gross profit rate of over 11%. This suggests that wearable devices are gradually deemed by some of Taiwanese electronic parts and component suppliers as a potential driver for their current meager margins.

Growth Forecasts of Global Market for Wearable Electronic Devices
Year	2013	2014	2015	2016	2017	2018
Shipment	12.7 M. Units	31.2 M. Units	74.0 M. Units	112.7 M. Units	155.1 M. Units	194.0 M. Units
YoY Growth Rate	--	146%	137%	52.29%	37.62%	25.08%

Source: Market Intelligence & Consulting Institute