Wearables markets to slow significantly in 2020 due to COVID-19
The global wearables markets is expected to slow down significantly in 2020 due to supply chain disruptions amid the coronavirus (COVID-19) outbreak.
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This is according to the March edition of research firm IDC‘s Worldwide Quarterly Wearable Device Tracker. The report predicts there will be 368.2 million shipments in 2020 which represents and overall annual growth rate of around 9.4%. Compare this to last year’s 89% increase and you’ll understand just how much the market is expected to slow.
The reason for this are supply chain disruptions in the first half of the year. The COVID-19 crisis started in China which is the manufacturing location for many wearables companies. The situation is improving in that country now so things are slowly picking up again, but the epicentre of the coronavirus crisis has shifted over to Europe, with the US likely to follow after. Unfortunately, few countries will ultimately be spared.
This has also brought down the predicted five-year compound annual growth rate (CAGR) for wearable shipments. At 9.4% between 2020 and 2024, this represents a significant slowdown compared to recent years.
The table below shows the breakdown between categories. The “star performers”will be watches and earwear/hearables, with fitness bands and other product categories lagging significantly behind. Apple is expected to remain the leading brand as it continues to build its ecosystem of products.
“Watches and wristbands will be negatively impacted in the short term and we anticipate a 13% decline collectively during the first quarter as many factories in China struggle with manufacturing due to labor and component shortages,” said Jitesh Ubrani, research manager for IDC.
“Similarly, a decline of 7.1% is expected in the second quarter followed by mild recovery in second half of the year as supply constraints slowly begin to disappear and manufacturing returns to normal.”
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