The smartwatch segment hasn’t been able to live-up to the early hype created around it, failing to achieve the expected sales growth in 2016. However, the smartwatch market is about to witness momentum this year in majority aided by “hybrid smartwatches” category.
As per Counterpoint’s latest research, the hybrid smartwatch segment will cross US$ one billion mark in revenue in 2017, almost doubling annually.
The Hybrid smartwatches look and function like traditional analogue watches to the naked eye, but include smart features like step tracking, heart rate monitor, notifications and even NFC enabled payments. They connect to smartphones through dedicated apps available on iOS and Android stores allowing users to use the watch with traditional look and feel with smart functionalities.
Commenting on the potential of hybrid smartwatches, Counterpoint’s analyst Mudit Singh notes, “With sales of traditional analog watches under pressure from the likes of Apple and Samsung, luxury traditional watch brands such as Fossil Group, Tag Heuer, Citizen group and others, are turning to hybrid smartwatch form-factors to get a share of the smartwatch pie leveraging their core competency “design and craftsmanship.
"Wearable tech brands including Garmin, Misfit, Withings (now, Nokia) among others are also now adopting the hybrid approach to enable greater battery life and drive usage as well as user experience”.
Mr Singh, further notes, “The rise of hybrid smartwatches can be attributed to traditional watchmakers trying to address two key pain points which has held the smartwatch segment growth – Firstly, preserving the traditional, aesthetics style, look and feel, secondly, maximizing the battery life while retaining ‘meaningful and frequently used’ smartwatch features.”
Commenting on hybrid smartwatches growth, Counterpoint’s Research Director, Peter Richardson added, “Hybrid smartwatches sales volumes will grow 77 per cent annually taking the penetration to 12 per cent of the total smartwatch volumes in 2017.
"Major focus on hybrid smartwatch segment by traditional watchmakers will drive this growth. For example: Fossil group launched almost 100 SKUs of wearables in 2016 including popular hybrid models such as the Skagen Hagen Connected, Misfit Phase, and Fossil Q series.
"The US watchmaker aims to triple the number of SKUs in 2017, with majority of those being hybrid smartwatches. Though the number of SKUs seems high, Fossil Group is able to hit multiple market segments with finely gradated offerings, but likely with similar or the same underlying technology solution to gain scale.
"This form of product marketing is something Fossil does well; much better than technology companies. And with Baselworld-2017 around the corner, big announcements are expected from Citizen group and Fossil’s band of brands.”
