Just a day after Tim Cook announced the much-awaited Apple Watch to a thrilled gathering of journalists, Canalys is predicting that the device will be the biggest driver behind wearable band shipment in 2015.
The global wearable market is expected to grow 129 percent year on year to reach 43.2 million units in 2015, of which 28.2 million will be smart bands and 15.0 million will be basic bands, according Canalys.
Canalys defines smart bands as those capable of running third-party applications, and basic bands, as those which are not.
“By creating a new user interface tailored to its tiny display, Apple has a produced a smart watch that mass-market consumers will actually want to wear. The sleek software, variety of designs and reasonable entry price make for a compelling new product. Apple must still prove, however, that the final product will deliver adequate battery life for consumers,” said Daniel Matte, Analyst of Canalys. ‘’
Many market observers have questioned why consumers would want a smart band, justifiably demanding compelling use cases. Hoping to address these concerns with its new wearable, Apple has demonstrated a variety of use cases, including health and fitness and personal communication, as well as other areas, such as mapping for walking navigation, workout and activity tracking, and mobile payments.
Meanwhile, low-cost Chinese vendors are increasingly playing a role in the market for wearable bands. Xiaomi has attempted to dramatically lower the price of basic bands with its Mi Band. Android Wear is growing a viable ecosystem, though it cannot be used in China. Google must greatly improve its wearable platform over the coming years to better compete with Apple’s new offering. Long-term, wearable bands from all vendors must provide clear value to consumers beyond the existing capabilities of smart phones in order to justify the purchase of an additional device.
‘The basic band vendors, such as Fitbit and Jawbone, will enjoy the advantages of their lower pricing for the immediate future. Eventually, however, stronger smart band competitors to the Apple Watch will likely emerge and push smart band pricing down, threatening the basic bands. This market will undergo disruption similar to that suffered by feature phones when smartphone prices fell,” said Chris Jones, Vice President and Principal Analyst of Canalys.