US Insights

US smartwatch market not yet ready for primetime

Carolina Milanesi

Former Chief of Research and Head of US Business, ComTech

Mobile 10.29.2015 / 12:00

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Apple dominates young category; 92% of those intending to purchase associate the brand with the device

The wearables market is still in its infancy: only 3% of the US population age 16 and older own a smartwatch or a smartband, according to a late August survey of 11,000 consumers by Kantar Worldpanel ComTech. Manufacturers, ecosystem owners, and developers nevertheless see significant opportunities ahead.

Smartwatches have been on the market for several years. The Pebble Smartwatch debuted in 2012, establishing the category as it is known today. Yet, only 1% of the current smartwatches now in use in the US were purchased in 2013, while 14% were bought in 2014.

Smartwatch penetration by demographic

Smartwatch ownership follows the classic early-adopter profile: more than two-thirds of smartwatch early adopters are male, and one out of three are between the ages of 25 and 34. Vendors like Apple use greater attention to design and personalization to appeal to non-tech lovers, but the results of those efforts have not yet completely materialized.

Key Numbers

  • 67% of smartwatch owners are men
  • 33% of smartwatch owners are women

Looking at where smartwatches have been purchased, the channels preferred by buyers have more in common with other consumer electronics goods than with jewelry. Thirty-three percent of smartwatch buyers got them online, 17% bought them from a consumer electronics store, and 11% of owners received their smartwatch as a gift.

Among panelists who knew what a smartwatch or smartband was, 92% connected Apple to the category, far more than any other brand. This was followed by Fitbit in second place with 47%, with Google (34%) edging out Samsung (33%) for third place.

Among the non-owners interviewed, 20% (17% men and 22% women) were not sure what these devices were, and 11% had never heard of them. Considering the poor job vendors have done thus far in defining the smartwatch category, it actually is surprising that 52% of those interviewed were able to identify what these devices are: something you wear like a watch, and that let you runs apps.

Top barriers to smartwatch purchasing in the US

Smartwatch rejecters not intending to buy in the next 12 months are equally divided between men and women, but tend to be older, with 29% of them between the ages of 50 and 64. Device cost is the most frequent reason given by these "non-intenders" (41%); the second most common reason given is that their phone already does everything they need (33%).

Lack of knowledge does not appear to play a big role in rejecting these gadgets, as only 8% cite not understanding the technology as a reason. When digging a little deeper, most consumers do not actually understand the advantage of having a smartwatch (52%) versus not understanding what they do or how they operate.

It is not a surprise that price and lack of a clear use case are the main barrier to purchase. With wearables, the purchase decision will be greatly impacted by the absence of the kind of subsidy people have become accustomed to with smartwatches. Smartphone buyers have been protected from the actual cost of their device, but they will see the true cost of wearables from the outset.

As smartwatches develop and acquire more standalone functionality, there is a similar trend as that of smartphones and PCs. Smartphones are the primary go-to device for many throughout the day, and the PC remains the device where people spend longer amount of times - usually for more complex work. Some people might soon adopt wearables, not just smartwatches, as the devices that get them through the day, often without their direct intervention. The phone is the device used for more complex tasks, or for those that require a person to more actively participate.

Source: Kantar Worldpanel

Editor's Notes

To download the full the version of the Insight Report, click here. Journalists, for inquiries or to speak with Carolina Milanesi, contact us. Follow us @Kantar and sign up for our alerts.

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