The North America smartwatch market is expected to grow at a CAGR of 9.57% during the forecast period. Larger penetration of smartphones and growing concern about personal health & fitness by the population are the key factors driving the growth of the studied market. Moreover, innovative features such as tracking, alerts, and connectivity in smartwatches have garnered consumer interest in recent years.
- North America houses some of the most innovative smartwatch brands that invest huge capital in research and development activities, keeping the region at the forefront of technological innovation in the industry. For instance, in the financial year 2020, Apple Inc. invested USD 16.21 billion in research and development, which is 6.23% of its total revenue. Similarly, Garmin invested USD 705.68 million in innovation, which is 17% of the total revenue generated in 2020.
- With companies, such as Fitbit Inc. and Apple Inc., making significant revenues from the United States, the North American region is expected to have a high market share during the forecast period. In 2020, Apple Inc. generated 45.37% or USD 124,556 million from the American region. Fitbit Inc. generated 55.7% of the total revenue only from the United States in 2019, representing a stronghold on the market.
- The integration of IoT technology enhances the capability of smartwatches to serve the purpose of multiple apps and devices and, therefore, offers better connectivity and other connected devices. Furthermore, the growing popularity of hybrid smartwatches, between a traditional and a smartwatch, can create new opportunities for the players in the smartwatch market. A hybrid smartwatch offers the features of a regular smartwatch with some connected features but without a touch display or charging functionality.
- The lack of awareness among consumers regarding the utilities of smartwatches is restraining the market growth. The high initial investments, device complexities, and technological hurdles are also restraining factors for the market's growth.
- COVID-19 outbreak had impacted the wearables market supply. However, the usage of smartwatches in health and medical terms has significantly risen, with many manufacturers such as Apple implementing features such as ECG integrated within the watches. This is expected to rise the market share in the future.
Key Market Trends
Growing Adoption of Connected Devices is Expected to Drive the Studied Market
- According to Cisco Systems, the wearable market is promising in the United States, as the number of connected wearable devices in North America is expected to grow to over 439 million in 2022. North America is forecast to be the region with the most 5G connections made using wearable devices in 2022. The 439 million North America connections would be 222 million more than those made to 4G networks in 2017.
- In the forecast period, the rollout of 5G across the United States by AT&T, Verizon, and T-Mobile will produce a significant increase in connected devices in the home, car, and human body. With speeds potentially being 100 times faster than standard 4G, the new norm will speed the streaming or downloading capability of the smartwatch spectacularly. The ongoing trend for self-sufficient smartwatches rather than relying on smartphone connectivity offers huge potential to the market.
- With the rise of 5G, the smartwatch may no longer need substantial physical storage to be built into them and can be used for additional sensors for advanced functionality. With faster connections, lower latency, and effective instantaneous transmissions, users could store all their apps and files on the cloud rather than requiring their smartphone or wearable device to include physical storage.
- The concerns among the consumers such as user interface, reliability, convenience, and privacy protection with smartwatches collecting the data, like geo-location, in addition to personal health-related information comes a risk of a data breach. Also, as the device is connected to various cloud apps, access to third-party apps could become a point for an attack and is preventing the growth of the market and the ecosystem of connected devices as part of the internet of things (IoT).
- Further, companies have been filing patents and commenting positively on the future of smartwatch technology, such as gesture recognition and futuristic applications & innovations. This is likely to make the industry players in the United States spend on research and development of such technologies, thereby shaping future applications.
- Amidst of pandemic, Covid-19, vendors are seizing opportunity by launching the smartwatch and fitness tracker, which can monitor and guide the user based on its measurements that are owing to increasing health-related awareness in the aging population and the mix of that age group population experiencing the influx of people with more acquittance to technology.
Personal Assistance to Witness Significant Growth Due to Increasing Rate of Heart Disease
- According to the American Heart Association's Heart and Stroke Statistics, at least 48% of all adults in the United States have some form of cardiovascular disease. Much of the prevalence is driven by an increase in the number of people classified as having high blood pressure, following the 2017 guidelines that redefined hypertension levels to 130/80 mm Hg. Heart disease is the leading cause of death in the United States as one person dies every 36 seconds in the United States from cardiovascular disease, and about 655,000 Americans die from heart disease each year that is 1 in every four deaths.
- The healthcare cost for the treatment of heart disease in the United States is expected to triple by 2030, according to the new projections from the American Heart Association. This includes the cost of health care services, medicines, and lost productivity due to death. Due to this, many people are switching to smartwatches and fitness trackers, which is a one-time investment, and through that, the user can monitor vital activities in real-time such as sleep tracking, steps, heart rate, oxygen measurements, etc. and offer lesser visits to the clinic for regular health checkups.
- Therefore, many vendors in the region are investing to increase the monitoring capabilities of the smartwatch by partnering with the health research institute. For instance, Apple partnered with the National Institutes of Health and Harvard T. H. Chan School of Public Health for a major long-term study of women's health. The collaboration will permit researchers to study conditions including pregnancy, infertility, polycystic ovary syndrome (PCOS), menopausal transition, and osteoporosis. Apple's new Research App will help users participate in the study. The new study will connect academic medical institutions, healthcare organizations, and Apple products to contribute to medical science and help to create the next generation of innovative health software.
- Some recent smartwatches have the capabilities of detecting heart conditions such as atrial fibrillation, sleep apnea, including SpO2 levels in the blood. The ECG season, although it can detect only detect one indicator out of several, enables diagnosis of some of the heart conditions, and more research and development is expected to increase the functionality of the wearable technology sector in terms of heart health.
- Moreover, many technology players in the market are also planning to utilize the core fitness technology of the smartwatch provider. For instance, in November 2020, Google has entered into a definitive agreement with Fitbit Inc for USD 7.35 per share in cash. It is a part of its business strategy through which it will be able to utilize Fitbit's resources and global platform to accelerate innovation in the wearable category.
The North America smartwatch market is moderately concentrated due to higher initial investments. It is dominated by a few major players like Apple Inc., Fitbit Inc., Garmin Ltd, Samsung Electronics Co. Ltd, and Fossil Group Inc. These significant players, with a prominent share in the market, are focusing on expanding their customer base across foreign countries. These companies are leveraging strategic collaborative initiatives to increase their market share and increase their profitability. However, with technological advancements and product innovations, mid-size to smaller companies are growing their market presence by securing new contracts and tapping new markets.
- September 2020 – Apple Inc. unveiled the Apple Watch Series 6 and Apple Watch SE. Apple Watch Series 6 added a new feature that measures the oxygen saturation of the user’s blood, so they can better understand their overall fitness and wellness. While the Apple watch SE features the same accelerometer, gyroscope, and always-on altimeter as Apple Watch Series 6, and with the latest motion sensors and microphone, it offers robust health and safety capabilities including fall detection, Emergency SOS, international emergency calling, and the Noise app.
- August 2020 – Fitbit Inc. launched the Fitbit Sense, the most advanced health smartwatch. It is embedded with innovative sensors, software technology, and the first electrodermal activity (EDA) sensor to help manage stress, along with advanced heart rate tracking technology, a new ECG app, and an on-wrist skin temperature sensor, all powered by 6+ days of battery life.
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1.2 Scope of the Study
4.2 Industry Value Chain Analysis
4.3 Industry Attractiveness - Porter's Five Forces Analysis
4.3.1 Bargaining Power of Suppliers
4.3.2 Bargaining Power of Buyers
4.3.3 Threat of New Entrants
4.3.4 Intensity of Competitive Rivalry
4.3.5 Threat of Substitute Products
4.4 Impact of COVID-19 on the Market
4.5 Market Drivers
4.5.1 Increasing Technological Advancements in the Wearables Market
4.5.2 Increase in Health Awareness Among the Consumer
4.6 Market Restraints
4.6.1 Growing Complexity of Wearable Devices and Limited Use of Features, Augmented With Security Risks
6.1.1 Watch OS
6.1.2 Android/Wear OS
6.1.3 Other Operating Systems
6.2 Display Type
6.2.3 TFT LCD
6.3.1 Personal Assistance
6.3.4 Other Applications
6.4.1 United States
7.1.1 Apple Inc.
7.1.2 Fitbit Inc.
7.1.3 Garmin Ltd
7.1.4 Fossil Group Inc.
7.1.5 Polar Electro OY
7.1.6 Pebble Technology Corporation
7.1.7 Neptune Computer Inc.
7.1.8 Google LLC
7.1.9 Samsung Electronics Co. Ltd
7.1.10 Huawei Technologies Co. Ltd
7.1.11 Sony Corporation
A selection of companies mentioned in this report includes:
- Apple Inc.
- Fitbit Inc.
- Garmin Ltd
- Fossil Group Inc.
- Polar Electro OY
- Pebble Technology Corporation
- Neptune Computer Inc.
- Google LLC
- Samsung Electronics Co. Ltd
- Huawei Technologies Co. Ltd
- Sony Corporation