We are currently in the middle of a blog series where we are looking at predictions for 2024 and beyond. We have already looked at the general construction market, the risks that exist, the worker shortage, and one of the hottest technologies of the year: generative AI (artificial intelligence). Today, let’s turn our attention to a technology that is not quite as popular, but still offers quite a bit of benefits: wearables.
Let’s start by looking at the state of wearables today. In the second quarter of this year, wearables bounced back a bit, reversing two previous quarters of decline, according to IDC. In Q2, we saw an 8.5% growth year-over-year with shipments totaling 116.3 million devices.
This growth came at the expense of overall market value as average selling prices fell due to increased competition and discounting by retailers seeking to reduce excess inventory.
Looking to the future, IDC forecasts 520 million wearables will be shipped in 2023, up 5.6% from 2022. Hearables will be the top category with nearly 62% of the wearables shipped this year, followed by smartwatches with nearly 32% of shipments.
Looking ahead, the market is expected to grow to 625.4 million by the end of 2027, representing a 4.7% compound annual growth rate. The top wearable device product categories include earwear, smartwatch, and wristband.
Let’s turn our attention now to one very specific subset of the market. AR (augmented reality) and VR (virtual reality) headset shipments declined for the fourth quarter in a row, as volumes fell 44.6% year-over-year during the second quarter of 2023. Downward pressure from the global economy has curbed demand.
In fact, 2023 volumes are shaping up to be only slightly higher than 2017 with 8.5 million headsets expected to ship this year. However, a lot has changed in the past few years as standalone headsets have had a compound annual growth rate of 57.5% while screenless viewers have essentially disappeared from the market.
There could be some good news in all of this. While 2023 will be another year of decline for AR/VR headset shipments, IDC forecasts the market to rebound in 2024, growing 46.8% year over year thanks to new hardware. By 2027, the market is expected to reach 30.3 million units globally.
All in all, we see the market for wearable devices has been slow in the past several quarters, but it appears there is an upturn on the horizon as we head into 2024, offering greater opportunities to use the devices across industries in the days ahead.
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