Wearables market to be flat for all 2022 on inflation, recession worries

Smartwatches, ear buds and other wearable tech saw strong growth over two years of the pandemic, but experienced a decline in the second quarter of nearly 7% year to year following a 3% decline in the first quarter.  Growth for all of 2022 is now expected to remain flat compared to last year.

Shipments dropped to 107 million devices in the second quarter, IDC said, citing buyers’ worries about rising inflation, fears of recession and their spending on products outside of electronics.

Four of the top five companies saw declines in the second quarter, IDC said.  Apple, Samsung, Xiaomi, Huawei saw declines while Imagine Marketing improved.

The timing of the wearables downturn isn’t good. Companies including Apple, Samsung and Google are in the midst of launching more expensive smartwatches just at a time when the interest in high priced products is questionable, analysts said. “Even though pricing on some new products remains the same as the previous generation, the strength of the US dollar makes the purchase more difficult in local currencies around the world,” said Jitesh Ubrani

IDC said forecasts for the full year will remain flat compared to 2021 at 535 million units of earwear, watches, wristbands and other wearables.

Growth in the wearables space is expected to return in 2023 based on a return in demand for watches and hearables from new buyers in emerging markets and replacements in mature markets like the US.

“While the wearables market was down in the second quarter and will most likely be flat this year, it is certainly not out,” said Ramon Llamas, IDC research director. “As the wearables market takes slow steps towards maturity, it will eventually reckon the ebbs and flows between the record-breaking volumes we saw during the pandemic and what we see today. Overall, the trend continues upwards, just at a slower pace…”

Apple continues to hold the largest share of wearables with 25% of the market, but saw a 16% decline in the second quarter after seeing 6% year over year growth in the first quarter. Samsung, Xiaomi and Huawei started seeing declines in the first quarter.

On Sept. 7, Apple announced the new Apple Watch Series 8 starting at $399 and introduced a high end Watch Ultra for $799, available Friday Sept. 23. A new Watch SE model starts at $249.  Ultra was inspired by extreme athletes and others.

RELATED: Apple’s all about SOS via sat, car crash sensors and a fat A16 chip