Wearable Device Sales to Jump 15%, Mobile Payments Partially Fueling Growth
New research indicates that mobile payments are a driver behind the growth in the wearables market.
The global market for wearable devices including smart assistants and wireless headphones is expected to spike by 15.3% this year, according to new data from International Data Corporation (IDC), and mobile payments may be fueling some of that growth.
IDC said it expected the wearable device market to include 198.5 million units by the end of 2019 and 279 million units by the end of 2023. Watches, ear-worn devices and wristbands will power much of the market’s anticipated 8.9% compound annual growth, the company noted. Connected clothing is also making headway. Many wearables, especially watches, have digital payment capabilities.
“The rise of smart assistants on wearables, both wrist-worn and ear-worn, is a trend worth watching,” IDC Mobile Device Trackers research manager Jitesh Ubrani said. “Though still in its infancy, the integration of these assistants with wearables opens up new use cases, from allowing these devices to tie into the smart home to making the devices more proactive at urging users to live healthier or more productive lives.”
Watches were almost half (44.2%) of the wearables market in 2018 and will be 47% of the market by 2023, IDC predicted. “Smartwatches from Apple will undoubtedly lead the way and despite increasing competition from watches running forked versions of Android as well as Wear OS, WatchOS will account for 27.5% of all watches in 2023. Other than smartwatches, hybrid watches and simpler kids’ watches will also continue to grow albeit at a much slower pace,” it noted.
Earwear, sometimes called “hearables,” will be the second-largest category of wearables. IDC predicted the devices, which incorporate biometric sensors and smart assistants, will be 31% of the market by 2023.
The IDC report comes on the heels of a study of 383 U.S. adults by Scottsdale, Arizona-based Tallwave, in which 85% of the respondents said they saw a lot of benefits to digital payments. Over two-thirds (71%) had used a digital payment app within the last six months, including 80% of people age 25-35 and half of respondents age 56 and up. The study also found that 72% of respondents said they would use digital payment apps more often if more stores and restaurants would accept them.
“The most frequently used apps revealed in this survey were primarily for peer-to-peer and online purchases (Venmo and PayPal), which indicates that the ease of use of thee apps provide are setting the standard for the digital payment app customer experience,” the company noted. “As these payments are getting more seamless, the in-person digital payment still requires the buyer’s phone, picking a card, then pass whatever security system their phone has (thumb/face recognition, password) while holding the phone near the merchant’s terminal. The process is similar (if not more time consuming) than pulling a card out of a wallet.”
“To move away from the wallet, providers will need to incorporate automation and virtualization into their payment testing processes to mirror what power users are already expecting based on their current payment experiences,” it added.