Hearables leading the wearable tech market

Data from the IDC Worldwide Quarterly Wearable Device Tracker has revealed that the market for wearables grew 14.1% during the second quarter of 2020, due to strong demand for hearables and continued interest in tracking health metrics. Although the total market increased to 86.2 million units during the quarter, the growth was unevenly spread across the various form factors, with hearables showing stronger and broader demand than smart watches and fitness trackers.

Data from IDC’s US Consumer Technology Purchase Index survey shows that self-reported consumer spend in the US on hearables increased throughout the quarter and into July, up 7% over the April benchmark. Comparable self-reported spend on smart watches and fitness trackers decreased by about a third.

“The data make it clear just how discretionary a purchase smart watches and fitness trackers are. Demand among those with low incomes has dried up almost completely. Meanwhile, consumers at the top of the market remain bullish,” said David Myhrer, Research Vice President for IDC’s Consumer Technology Strategy Service.

Jitesh Ubrani, Research Manager for IDC Mobile Device Trackers, noted that organisations around the world have started to use wearables to help fight against COVID-19. “Not only are wearables being used to track symptoms, but also to warn wearers when social distance isn't being maintained,” said Ubrani.

The wearables market has benefited from COVID-19 with vendors seeing an uptick in services, as health continues to be at the forefront of use cases for wearables. “With gyms closing and outdoor activities limited, users have opted for online or in-app fitness sessions and this has ultimately helped vendors to ramp up the services side of their wearables businesses,” said Ubrani.

Hearables grew 32.6% and accounted for 60% of all wearables during the quarter. Apple shipped 23.7 million Airpods and Beads products, followed by Samsung and Xiaomi. The hearables category was dominated by smartphone brands as the opportunity to bundle remains high, while traditional headphone makers such as Sony, Bose, Jabra and others rank lower but focus on the premium end of the market. Ear-worn wearables continued to be popular as people work from home and require hearables to maintain privacy while remaining connected with the devices and services.

Watches and wristbands fell from 46.8% of shipments in the second quarter of 2019 to 39.2%. Combined, shipments for these devices fell 4.4% from last year and totalled 33.7 million units. Apple, Huawei and Xiaomi gained share and dominance while many other vendors struggled to convince consumers that these devices are ‘must haves’ during an economic downturn. Brands such as Fitbit invested in disease detection, while others such as Samsung deployed wearables to track physical distance between wearers in order to encourage social distancing.

Other wearables, such as clip-on devices or connected clothing, declined 58.7% year over year. Oura was recently adopted by the NBA in an effort to track players’ health during the pandemic. While the deployment was relatively small and its efficacy unproven, it brought attention to wearables as a whole and may lead to a short-term bump for the entire category.

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