Counterpoint: Apple still owns growing wearable market

“Apple’s powerful iOS ecosystem, typically comprised of consumers with larger disposable incomes, has been the main driver for growth” — Analyst Sujeong Lim

From “TWS Drives 2020 Wearables Growth; Smartwatches to Add Momentum From 2021,” which landed on my desktop Thursday:

apple owns wearables counterpoint“The trend around removing jacks and earphones from devices and boxes is becoming a big driver for TWS [true wireless stereo] segment growth,” says Counterpoint Research senior analyst Liz Lee. “It also helps that mobile media consumption continues to grow, making TWS [true wireless stereo] the next must-have accessory.”

In terms of smartwatches, demand is expected to wane in 2020 but should pick up this year, according to senior analyst Sujeong Lim, who covers IoT and emerging technologies. “The normalization of economies coupled with increased interest in health and fitness will help the smartwatch market grow. We expect low double-digit growth through the medium term – possibly higher if average selling prices decline quickly.”

Based on the latest figures from Counterpoint Research’s TWS Market Tracker and Smartwatch Model Tracker, premium products continued to lead, with Apple products comprising 29% and 28% of TWS and smartwatch shipments, respectively, in Q3 2020. Lim observed that, “Apple’s powerful iOS ecosystem, typically comprised of consumers with larger disposable incomes, has been the main driver for growth – especially in terms of revenues. High-end stalwart Samsung has also performed consistently.”

“But there is big potential in budget, and we’re already seeing the impact in hearables. In Q3 2020, half of the top 10 were budget brands with sub-$50 and even sub-$20 offerings; Xiaomi best illustrated the trend as it consolidated its number two spot.”

Cue the “earware” spreadsheet (click to enlarge):

apple owns wearables counterpoint

My take: Not sure I’d put my money on “high-end stalwart Samsung” in this market.

5 Comments

  1. Gregg Thurman said:
    Could Xiaomi’s strength of share be a China thing ie, can’t afford Apple Watch/AirPods buy Chinese?

    0
    January 15, 2021
  2. Fred Stein said:
    Apple has done what no other “computer” company has ever done, going back to 50’s.

    Apple has “won” in three downsize generations, from Personal Computers to Smart Phones to wearables.

    Winning does not require dominant market share. It means delivering the best products, at scale, with the best ROI, and best ecosystem in the category.

    Ecosystem ranges from components, to ISVs, to channel partners, to loyal customers and more.

    6
    January 15, 2021
  3. Robert Paul Leitao said:
    Non-News Flash: Not every consumer, for whatever reason(s), is enticed by the Apple eco-system. To my knowledge, I’ve yet to encounter an Apple Watch user that doesn’t use an iPhone. It’s not now nor has it ever been about market share. Revenue share is a more relevant metric. Beyond revenue share is the value to Apple of each customer. Each customer relationship is likely to create a recurring revenue stream for Apple. Of course I’d like most everyone to be an Apple customer. But this takes time. Counting widgets doesn’t help anyone. Seeing the potential of what each customer brings to the eco-system and how Apple products can assist in transforming lives is a breathtaking view of the world.

    4
    January 15, 2021
  4. Michael Goldfeder said:
    Quality over quantity. However, Apple has a very large % of consumers with larger disposable incomes. Does anyone really want to be identified as being part of the Android ecosystem? Do they even have a moat or walled garden? More like a vacant lot compared to the Apple model.

    Sure Apple’s not for everyone, but just about every teenager wants an iPhone. That keeps the ecosystem growing and hopefully thriving for years to come.

    1
    January 15, 2021
    • Mark Visnic said:
      To Tommo’s frequent references to anecdotal evidence of younger demographic Apple product demand on venues such as Tik Tok, there is a stigma among many in the demographic against texting without the familiar iMessage blue bubble presenting to their social circle. The draw and brand value is that powerful.

      1
      January 15, 2021

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