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January 14, 2020

TWS (true wireless stereo) hearables and smartwatches continued to shore up the wearables market in 2020, with annual TWS shipments expected to grow 83% to 238 million units, while smartwatches will weather subdued category spending to increase 2% to tip the 100-million mark. The wearables market is divided into five distinct segments, of which earwear and wristwear comprise the majority of devices. Combined, they accounted for 93% of the overall market in Q3 2020, with earwear growing fastest on product changes from vendors and shifts in consumer demand.

Source: Counterpoint Research. *Includes smartwatches and bands. “The trend around removing jacks and earphones from devices and boxes is becoming a big driver for TWS segment growth,” says Counterpoint Research senior analyst Liz Lee. “It also helps that mobile media consumption continues to grow, making TWS 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.”

Source: Counterpoint Research realme was another notable budget brand to place in the TWS top-10 during the third quarter. “Building on strong hearables momentum, recent entry into smartwatches and strength in online, realme could repeat its smartphone success to become 2021’s dark horse in wearables.” commented Lee. “Our User Choices and Preferences Surveys for TWS and smartwatches show that a big portion of consumers buy wearables via online channels; vendors with a strong online pedigree should outperform.” Background: Counterpoint Technology Market Research is a global research firm specializing in technology products in the TMT industry. It services major technology firms and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of 13 years in the high-tech industry. Analyst Contacts: Sujeong Lim Liz Lee

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