Market Insight

Smartwatches to disrupt the Sports & Fitness market

May 03, 2016

Roeen Roashan Roeen Roashan Senior Analyst, Healthcare Technology
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Fitbit has had two highly productive years in 2014 and 2015, which has now led them to the number one spot in the Sports, Fitness & Activity Monitoring market for both revenues and shipments. It has taken the San Francisco based company less than ten years to obtain a leading position in the market – an impressive achievement. Overall, the market has been growing consistently, with top players enjoying double digit growth rates year on year.

Technologically, the market is still improving. Wrist-based heart rate monitoring has evolved to a level where its disruptive impact seems inevitable. While there still are many devices dealing with accuracy issues, improvements in sensors and algorithms, has led to a number of new devices that nearly match the performance of chest-strap monitors, such as Mio Fuse and Garmin Forerunner 235.

Beyond technology, consumer needs are evolving too. Practicing a multitude of sports, from running to hiking, cross-training and cycling, multifunctional also represent an avenue of growth. As the price-point for multisport devices decrease, adoption will occur among main stream users to a greater extent. This opens up a disruptive opportunity for smartwatches, due to the multifunctional capability and application ecosystem of iOS and Android watches. Consumer awareness of the value proposition of smartwatches has also increased, as a recent survey conducted by IHS shows that consumer’s intent to purchase a smartwatch is stronger than other traditional wrist monitoring product types. Approximately 13% of consumers consider purchasing a smartwatch within the next 12 months – a relatively higher adoption rate than the current installed base of smartwatches.  

There are already smartwatches that cater to the outdoor consumer, such as the Casio Smart Outdoor Watch or the Nixon Mission. While these pioneering devices touch upon certain relevant applications for the outdoor consumer, there are still many holes to fill, and none match the performance of a dedicated sports or outdoor watch. This is mainly due to battery limitations and processing. As these factors improve, smartwatches are likely to disrupt the market in the long-term, and companies such as Garmin, Polar and Suunto are expected to follow on and develop their own smartwatches.

Until then, sports, fitness and activity monitors, will continue to be dominated by dedicated devices, and OEMs in this space will incrementally innovate as a method to evolve consumer needs, and ensure long-term growth.

For questions or inquiries, please contact Roeen Roashan, Roeen.Roashan@ihs.com

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