On the back of wearable bands and TWS earbuds, smartphone accessories shipments are projected to grow at a healthy rate of 32 per cent in 2020. Research firm Canalys expects over 200 million wearable bands and over 350 million TWS earbuds units to ship respectively in 2021. As the COVID-19 pandemic deepened globally, consumers turned their attention to smart wearable and smart hearable accessories. In addition to Greater China and North America, Asia-Pacific and European regions are expected to contribute to the growth of smart accessory segment.
According to Canalys forecast, a total of 436.5 million units are expected to ship in 2020, 558.3 million in 2021 and 760.4 million in 2024. While the wearables CAGR 2020-2024 will be 6.7 per cent, TWS CAGR in the same period is expected to be at 19.8 per cent.
"The pandemic will prolong replacement cycles for smartphones. However, the 'lipstick effect' will drive consumers to spend on smaller, less costly items during an economic downturn to meet their buying pleasures. Consumers' attention to health and wellness has increased significantly during the pandemic, which is a great opportunity for wearable devices, such as those from Xiaomi, Garmin, Fitbit and Huami etc.," says Canalys Research Analyst Cynthia Chen.
Engagement in indoor activities such as remote learning, working from home and home entertainment, as well as outdoor sports and recreation also continued to rise. This ushers in greater than expected growth, particularly for TWS headphones, such as those from Apple, Samsung, Jlab and QCY etc.. TWS earbuds are expected to grow 39 per cent in 2021 to reach over 350 million units, much more robust than wearable bands, which are expected to grow at 12 per cent in the same year.
Chinese players are well poised to offer more choices, especially with affordable and appealing devices that resonate well with local users. They are expected to play a big part in pushing the overall APAC region to surpass North America to become the second-largest region for wearable bands and TWS headphones in 2024. Chinese smartphone vendors are also looking outwards to growth opportunities in overseas markets in the wearable band and TWS headphone categories. "Despite the likelihood of needing more time to recover from the pandemic, Southeast Asia nations are attractive due to its large population base and proximity to China. Some Chinese players that already have well-established channels are leveraging cross-border e-commerce platforms to reach users and shipping devices directly from China or Hong Kong," adds Chen.