The popularity of smartwatches with cellular connectivity is continuing to increase, and analysts are forecasting that upwards of 53.6 million units will be shipped by 2020. This amount is up from 7.5 million units forecasted to ship this year, representing a growth of 63% from 2016 to 2020. In short term, these shipments are predicted to be driven by a new Apple Watch with cellular connectivity.

Apple Watch 2
Image Credit: Apple

Analyst Daniel Matte of the research firm Canalys has said that he expects the next version of the Apple Watch – predicted to arrive later in the year – will have the ability to connect to mobile networks itself, without the help of an iPhone.

Cellular support to bring smartwatches into the mainstream

Last November, Google added cellular support to Android Wear. This could prove to be an important move in the smartwatch market, as most smartwatches currently function as a sort of second screen for their owner’s smartphones. Most of the processing power still lies in the owner’s phones, making them a necessity in owning a smartwatch.

While shipments are likely to be driven by a new Apple Watch with cellular connectivity in the short term, Canalys notes that “Samsung and LG have been very aggressive in bringing new cellular technologies to market.” The firm also noted that smartwatches such as Samsung’s Gear S2 classic 3G/4G and LG’s Watch Urbane 2nd Edition LTE “will also play significant roles.”

“The phase 2 eSIM specification will enable more independent smartwatches with a smoother user experience around cellular connectivity,” Matte commented. “Users will soon be able to choose among cellular providers and pay for monthly service. Many more smartwatches with LTE and GPS/GNSS will also be released this year, thanks to the availability of new LTE Category 1 chipsets.”

The majority of smartwatches still communicate through Bluetooth and wi-fi, which means that if the watch moves more than a few meters away from the smartphone it is linked to, it’s functionality drops off significantly. This, in turn, means that smartwatch wearers also have to carry their smartphone with them. To many, this limitation undermines the various reasons for owning a smartwatch.

Additional functionality

The addition of cellular functionality means that the smartwatch will be able to send a receive texts, track fitness, make and receive calls, and run applications, regardless of whether the smartphone is nearby or not. As long as both the watch and the smartphone are connected to a mobile network, they will each be able to function independently without the help of one another.

“Cellular calling would only be one feature, though the general improvement to device independence from the smart phone is significant and something that consumers have wanted,” says Matte. “Rather than any one new feature being a killer app, a broad variety of improvements will help to sell future smartwatches.”

Canalys states that, after a full year of availability, these “new technologies will have the biggest impact on shipments in 2017.”

Meanwhile, other factors that will drive smartwatch growth include the integration of additional health and fitness sensors, expanded activity tracking, and battery life improvements.

Today, it’s still early for smartwatches, as they have so far failed to make the jump into mainstream technology. However, according to Strategy Analytics, smartwatches will soon claim the majority of wearable devices, as they are still “big-ticket” items. Expect to see smartwatches on more wrists in the coming years.