Wearables market surged in 2015 fueled by Apple Watch & Fitbit, IDC data shows

Does IDC track "smart watches" as a category, or will they continue only with "wearables", which encompass everything from a $20 fitness tracker and up to a $10K Apple Watch?

They are all guesses of course - although 11M units seems to anecdotally fit with what one sees in comparison to past Apple launches that had similar levels.  Likely tracking close to 15M (perhaps a bit less) for 1 full year, which for this category seems awesome, especially considering the AW price vs. the competition.  I expect the sales/margins to date will allow Apple to recoup all of the investment made for gen 1, which means going forward sales should be well outstripping investment.  In other words - another success:)

My "wishes" for AW 2 which should allow it to double the gen 1 sales:
- Improved battery &/or faster charging to allow an (optional) always on low-power watch face during set times (e.g. out & about during the day)
- Higher water resistance rating
- GPS (only needs to be activated when iPhone is out of range)
- Faster CPU to launch apps in a couple of seconds or less
- Stronger taptic engine

Software improvements can move the sales needle as well.  My biggest request here is to have (optional, configurable) specific haptic feedback when my iPhone is out of range (BT or WiFi).  Just a sequence of taps on wrist (like the turning taps of Maps) for a few seconds that alert you to leaving it behind.  How many times have people left their phones behind mistakenly, where this feature would greatly reduce lost iPhones, or even just the inconvenience of leaving it at home.  Some people could make the the case to purchase an AW simply for that reason alone.  (yes, I know there is a visible indicator on the watch face, but I can tell you that is not that useful compared with haptic).  I understand the Pebble has this functionality?

If there are some "smart bands" coming (battery, or health sensor), and we see some interesting 3rd party apps develop (looking for a good golf course app myself), then I would say AW is poised to really grow going into gen 3 - like hitting 50M annual units.  It is no iPhone, but with the expected margins on these devices increasing given the size, it will be a real "move the needle" contributor to Apple's bottom line.

I wouldn't be surprised if iPod sales have dropped even more significantly than usual, suggesting that Apple Watch sales increases are even larger than the $1.2b change in "Other Products" implies. iPod Touches are $199-$399. Was anyone really going to give one as a gift when an Apple Watch Sport is $349? Then again, I was totally wrong on thinking the Apple Watch was going to be the dominant "dads and grads" gift last June (http://q10a1.blogspot.com/2015/03/apple-watch-sales-expectations.html).

rare comment said:

I wouldn't be surprised if iPod sales have dropped even more significantly than usual, suggesting that Apple Watch sales increases are even larger than the $1.2b change in "Other Products" implies. iPod Touches are $199-$399. Was anyone really going to give one as a gift when an Apple Watch Sport is $349? Then again, I was totally wrong on thinking the Apple Watch was going to be the dominant "dads and grads" gift last June (http://q10a1.blogspot.com/2015/03/apple-watch-sales-expectations.html).

No doubt the watch is selling well, and any other company moving those units would be elated.

But, assuming there are around 450 million active iPhones around the world in service, even 13 million units sold represents a mere 3% of the potential market for the Watch. So Apple has a long way to go before the watch is really a force to be reckoned with. Given that almost every iPhone owner likely has taken a look at the watch by now, one would assume they would have bought one by the holidays if they were going to. Granted there are still some countries that didn't see the watch by the holidays, though they are readily available online now, there are assuredly a few more sales to come, but not necessarily in significant iPhone markets to account for even the volume of sales they've sustained to date. Regardless, without something more compelling than new bands and co-branding partnerships released every 6 months to a year, it may be a long slow climb to even hit 10% of the iPhone market saturation. If Apple doesn't release a gen 2 watch in March, perhaps June will return the dads & grads boost you and I both expected.

brucemc said:

Does IDC track "smart watches" as a category, or will they continue only with "wearables", which encompass everything from a $20 fitness tracker and up to a $10K Apple Watch?

They are all guesses of course

This is IDC we're talking about. Of course they will not track "smart watches" as a category until the day they can make Apple look bad, because Apple is not a client of such ‘market research’ outfits. When the iPad came out they created a new special category for 'Media Tablets', only after there had been minimal competition from some Android junkers, so as to not have the newly introduced iPads tower over the almost non-existent Windows tablets that had been struggling for any attention for a decade. They only dropped the ‘Media’ misnomer when they could include an enormous quantity of toy tablets selling for less than 99$ at Walgreen’s checkout counter alongside National Enquirer and breath mints. At the time the only market share they could muster to be larger than Apple was ‘Other’.

They will probably use the same strategy and keep the wearables category as long as Fitbit and other low cost fitness bands hold their own against the more versatile and capable Apple Watch. Once Android OEMs will start flooding the market with cheap low performance 99$ watches by so many fly-by-night OEMs they will create a new smartwatch category and I predict that the very first leader just edging out Apple will be … Other.

And yes, contrary to the iPad situation where they had at least one real number to go by, they will all be guesses as well.

mac_128 said:

rare comment said:

I wouldn't be surprised if iPod sales have dropped even more significantly than usual, suggesting that Apple Watch sales increases are even larger than the $1.2b change in "Other Products" implies. iPod Touches are $199-$399. Was anyone really going to give one as a gift when an Apple Watch Sport is $349? Then again, I was totally wrong on thinking the Apple Watch was going to be the dominant "dads and grads" gift last June (http://q10a1.blogspot.com/2015/03/apple-watch-sales-expectations.html).

No doubt the watch is selling well, and any other company moving those units would be elated.

But, assuming there are around 450 million active iPhones around the world in service, even 13 million units sold represents a mere 3% of the potential market for the Watch. So Apple has a long way to go before the watch is really a force to be reckoned with. Given that almost every iPhone owner likely has taken a look at the watch by now, one would assume they would have bought one by the holidays if they were going to. Granted there are still some countries that didn't see the watch by the holidays, though they are readily available online now, there are assuredly a few more sales to come, but not necessarily in significant iPhone markets to account for even the volume of sales they've sustained to date. Regardless, without something more compelling than new bands and co-branding partnerships released every 6 months to a year, it may be a long slow climb to even hit 10% of the iPhone market saturation. If Apple doesn't release a gen 2 watch in March, perhaps June will return the dads & grads boost you and I both expected.

I think your logic is a little off, regarding the point that "most" iPhone owners will have seen the AW by now, and either bought one or don't plan to.  Therefore since few have bought them, it is only those who haven't seen it that are left as potential buyers.  Your assumption seems to be that when someone sees a brand new product (and really for most, product category in this case), they either buy it right away or never do.  That completely ignores human behaviour - it is not binary, but quite nuanced.  Back in the day I had seen an iPod a couple of years before I bought one, because I hadn't yet come to the conclusion that I wanted to spend $400 USD on a device for carrying music.  Eventually a couple years later I felt I could justify it as a gift to myself when on a trip, and I did buy it.  IMO everyone goes through a similar thought process.

The "smart watch" category is very (very) new, and it will take years for the product to develop & more people to determine if they want such a product.  Of the location where I work and among my friends, I am one of the few AW owners.  Breaking down questions, feedback & opinions I have received:
- Still get questions of "is that the Apple Watch" - meaning many really don't know much about it
- Some indicate they do want one, but are waiting for at least generation 2
- Most who have seen it claim "that is cool"
- Vast majority don't know if they will or not, but it is hard to say based on gen 1 use cases if they will never buy one, or it won't be until generation 3 or 4 that they see the value