The fourth quarter of 2016 marked a return to growth for the smartwatch industry (Strategy Analytics). According to an IDC report in March, global smartwatch shipments will grow from 49.2 million in 2016 to an estimated 152 million in 2021. This marks an impressive five-year compound annual growth rate (CAGR) of 25.3%. Additionally, the larger wearable sector will move from 102.4 million device shipments in 2016 to 237.5 million in 2021, a CAGR of 18.3%.
Following a brief slowdown in 2016 caused by delayed launches of major platforms, the smartwatch sector is now one of the fastest-growing markets in digital devices. Smartwatch technology is clearly not a passing fad; indeed, it is reshaping entire industries. At Baselworld 2017 – really the Consumer Electronics Show of watchmaking – smartwatches were everywhere. More and more watchmakers (Tag Heuer, Fossil and Movado, among many others and possibly even including music-streaming service Spotify) are tapping into the wearable technology field and fighting intense new competition from companies like Apple, Samsung, LG and Huawei.
Appealing to millennials
This bright outlook becomes more interesting when looking at adoption. According to a Gartner study published last December, smartwatch adoption in the US, Australia and the UK is generally around 10%, with the US having higher adoption. It gets even more interesting when examining the various demographics: consumers who are 18-44 years old have a higher adoption rate, at about 15%. Furthermore, this group accounts for approximately 70% of smartwatch sales (Emozionella Insights).
Most people in this age range embraced the changes in technology and were instrumental in the integration of all aspects of their online presence. This includes sharing their personal lives on social media and purchasing and using apps that bridge the gaps between personal computers, smartphones, smartwatches and real life.
This outlook reinforces what many people have already observed in the smartwatch market:
A clear call to action
For the vast majority of companies with a digital business, these numbers mean that the most important part of their customer base has shifting expectations. It is more geared toward consumers’ digital experiences as people are starting to seek smarter features with more human-like interactions.
The customer base for smartwatch and wearable technology knows that technology is constantly innovating and they have high expectations. Where do these wearers of smartwatches look for the newest and best innovations? Apps. How do they customize their smartwatches to fit and enhance their unique lives? Through apps.
As 2017 picks up momentum, the opportunities for smartwatch apps continue to grow as legacy technical gaps are filled and no longer limit smartwatch capabilities.
We expect smartwatch manufacturers to enhance their standalone features and focus on specific niches. This will enable brands to deliver richer experiences and new features with apps (Emozionella Insights).
Business leaders already know that being ahead of the curve (and staying there!) is essential to maintaining relevancy in any market. For smartwatch apps especially, there is no better time for action than the present. Adopting an innovative approach to smartwatch apps must be a clear and strategic priority in 2017 to ensure success in the next few years.
Redefining digital strategy and forming partnerships to gain specific competences will be the first step. A well-formulated value proposition and user-experience design will play a significant role as brands appeal to not only to their existing customers but also expand their brand. This is critical in reaching out to new digital consumers who expect more from their smartwatch apps.
Discover your business opportunities with smartwatch apps
The overall smartwatch market is booming and has become one of the fastest growing markets in digital devices and technology. We can help your business to grow by conceiving an app that isn't just a new product for your business but one that creates an entirely new experience. This is where we begin, with the experience, and work backwards until the app is just as unique as each of your customers, and is simultaneously as efficient and useful for you.
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