Canalys predicts the smart personal audio category will grow the fastest, followed by smart speakers.
Technology research firm Canalys is forecasting that vendors will ship more than three billion smart devices worldwide in 2023. This includes smartphones, desktop PCs, notebooks, tablets, wearable bands, smart speakers, and smart personal audio devices.
This represents a four-year CAGR of 6.5% from 2.4 billion units in 2019, despite economic and political uncertainty, the firm noted.
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Smartphones remain the most important category
In the smartphone market, vendors expect challenging conditions despite the introduction of 5G and new form factors and will double-down on their ecosystem strategies in 2020 to challenge the incumbents in many device segments, according to Canalys.
Smartphones will remain the most important category and will account for more than half of all smart device shipments, according to Canalys. However, in terms of opportunities, smart personal audio will be the fastest-growing category, up 32.1% year on year in 2020, to reach 490 million units, as sales of Bluetooth headphones, earphones and TWS earbuds all grow, the firm said.
The second fastest-growing category will be smart speakers, up 21.7% to 150 million units in 2020, followed by wearable bands, which will grow 11.8% in 2020, the firm predicts.
Smart devices vendors working on a complete, intelligent ecosystem
"The ambient computing paradigm is taking shape and getting ready for mass-market roll-out in the next five years," said Jason Low, senior analyst at Canalys, in a statement. "Smart devices, especially relatively new categories, such as smart personal audio devices, wearable bands, and smart speakers, are forming multiple touchpoints to complete an intelligent ecosystem for consumers on the move, at work and at home."
A lot of progress has been made in the past 12 months, Low added, and smart devices will be the most important trend in consumer technology in 2020. "It is becoming apparent to vendors that these devices are important as they offer different opportunities for user interactions and a more holistic approach to the user experience, as well as several key features that cannot be effectively achieved by smartphones alone," he said.
The goal: seamless integration between smartphones and smart devices
When it comes to ambient computing, there is no "one-size-fits-all"strategy, the firm said. "Each vendor must take their own goals, capabilities, and target audiences into account while they pick the right strategy," said Canalys vice president of mobility Nicole Peng, in a statement. "But there are many big bets to be made, especially for vendors new to this game."
For example, Apple has showcased its capabilities to form a tight-knit ecosystem of devices and user experiences, Peng said. But other vendors are choosing a more open strategy. Smartphone makers are challengers in the consumer Internet of Things (IoT) category but can "weaponize their prominent position in the everyday digital user journey" to expand beyond their core business, she said.
"To reach more users, often including iOS users, [vendors] must think outside the box to provide seamless integration between smartphones and smart devices, both from a connectivity and a software standpoint," she advised. "By contrast, platform vendors, such as Amazon and Google, are far ahead in terms of ecosystem-driven features and services."
It is not just that their services are platform- and device-agnostic, Peng observed; they also have much more capable smart assistants. "To compete, hardware vendors must consider how different ecosystem devices should be positioned to align with their respective strategies, while creating new business models to complement the overall ecosystem," she said.