A wearables forecast from ISC calls for the overall wearables market to increase from 113.2 million shipments in 2017 to 222.3 million in 2021, a compound annual growth rate of 18.4 percent.

While basic wristbands like the Xiaomi Mi Band or Fitbit Charge have been the most popular wearables to date, these are quickly becoming commodities, according to IDC, which expects low single-digit growth in this category throughout the forecast period.

On the other hand, smart watches and basic watches are on a pace to take the lead. These wearables are expected to grow from 61.5 million in 2017 to 149.5 million in 2021 as more vendors – particularly fashion brands—and cellular connectivity built into smartwatches help to drive growth in this category.

Wearables Forecast
“The move from wristbands to watches introduces additional revenue opportunities for vendors and distributors as average selling prices are expected to rise,” said Jitesh Ubrani, IDC mobile device tracker senior analyst in a prepared statement. “However, the struggle to move beyond health and fitness persists and convincing consumers to spend more for utility that may not be immediately obvious will be a challenge. This is where fashion-forward brands have a chance to shine as their customer base doesn’t tend to prioritize features.”

The simplicity and low cost of fitness bands make them highly accessible, particularly in emerging markets around the world. Although they will account for the majority of device shipments in 2017 (39.8 percent), this category is expected to decline in share to 21.5 percent by 2021 as watches gain traction, according to the report.

The watches represent an evolution of fitness bands, but they include significantly better design and fashion appeal. IDC adds. The entry of additional fashion brands along with their unique customer base and distribution network will help to drive growth, although consumer education around their utility will continue to be a challenge.

More than 71 million smart watches are expected to ship by 2021, up from 31.6 million in 2017 thanks to the adoption of cellular connectivity, additional SKUs from fashion brands and the transition of kids’ watches (primarily in China) from basic location tracking watches to more sophisticated watches that allow kids to play games, run apps and communicate with friends/family.

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