Post-pandemic decline hits wearables segment

Article by Gadjo Sevilla | Sep 23, 2022

The news: Global wearables sales fell 6.9% YoY in Q2 2022, with demand declining due to inflation, fears of a recession, and consumer austerity, per IDC.

A maturing segment: The benefits of wearables like smartwatches for health and fitness tracking have resonated with consumers and medical professionals alike. Before the decline, smartwatch demand was growing by a record 13% YoY.

The wearables segment is now coming out of that period of hyper-growth, per the IDC. The pandemic fueled focus on health and fitness, especially for remote workers, who saw smartwatches as essential but are challenged by current economic realities.

Competition in smartwatches was expected to intensify with Google, Samsung, and Fitbit’s WearOS consortium fielding new models.
Market leader Apple recently expanded its Apple Watch offerings across a range of price points, from $249 to $799. “There seems to be a watch available for everyone," said Jitesh Ubrani, research manager for IDC mobility and consumer device trackers.
Recent wearables health tracking features include blood oxygen sensors, ECG, high and low heart rate notification, and temperature sensing to support cycle tracking and ovulation.
90% of wearables owners use them to track fitness and monitor health, particularly to count steps per day (64%), derive motivation to exercise (36%), and track weight loss (27%), per Deloitte’s Connectivity and Mobile Trends Report that polled 2,005 US consumers.

More than a step tracker: Fifty-five percent of device owners share their data with medical providers through apps, in-person visits, or text and email.

The data indicates wearables could be helping providers inform their treatment plans.
“Whether it’s a wearable or not, just collecting data from home, I’m making my patients healthier,” said Richard Milani, MD, chief clinical transformation officer at Ochsner Health System in New Orleans, in an interview with Signals.

What’s next? New features and innovation have slowed—the latest Series 8 Apple Watches use the same system on a chip (SoC) as Series 6 and Series 7 devices. A lack of significant updates means consumers will hang on to older devices longer.

"Cooling demand will force companies to further differentiate themselves," noted Ramon T. Llamas, research director for mobile devices and AR/VR at IDC.
Expect to see increased separation between basic health-focused smartwatches aimed at children and families like the Apple Watch SE, and fitness and sport activity models like the Apple Watch Ultra.
There are opportunities for sub-$200 wearables, Android-compatible devices, and non-watch trackers to attract new users.