Growing demand from consumer electronics and healthcare markets, together with the introduction of “novel” products and more smartphone users, is fueling strong growth over the next five years, according to new research from TechSci Research. The market research firm forecasts the global smart wearable market to reach $37 billion by 2020.
The report, "Global Smart Wearable Market Forecast & Opportunities, 2020," finds the emerging market on a growth path over the next five years driven by several factors – increasing IT spending, rising health concerns and more smartphone users. While demand was the highest for smartwatches and smart wristbands in 2014, the research indicates that with growing adoption coupled with rising disposable income levels, niche smart wearable products, including smart glasses and smart garments, will start to grow through 2020.
TechSci projects that demand for smart garments will continue to grow, driven particularly by athletes and diabetic patients. Other emerging technologies presented in the report include smart innerwear, smart tattoos and hologram projector-based smart wearables. Analysts believe that companies will increasingly focus on advanced technology, compatible and lightweight smart wearables.
"Though smart wristbands dominated the global smart wearables market in 2014, growing popularity of smartwatches due to continuously expanding smartphone user base is forecast to reduce the dominance of smart wristbands over the next five years. Traditional and luxury watch manufacturers are foraying into the smart watch segment to capitalize on lucrative market opportunities emerging in this segments," said Karan Chechi, research director, TechSci Research, in a statement.
Looking at current market growth, International Data Corporation (IDC) reports the global wearable device market recorded its eighth consecutive quarter of growth in the first quarter (Q1) of 2015.
IDC’s Worldwide Quarterly Wearable Device Tracker finds that vendor shipments totaled 11.4 million wearables in Q1 2015, which is a 200 percent increase from 3.8 million wearables shipped in Q1 2014.
"Bucking the post-holiday decline normally associated with the first quarter is a strong sign for the wearables market," said Ramon Llamas, IDC research manager, Wearables, in a statement. "It demonstrates growing end-user interest and the vendors' ability to deliver a diversity of devices and experiences. In addition, demand from emerging markets is on the rise and vendors are eager to meet these new opportunities.
"What remains to be seen is how Apple's arrival will change the landscape," Llamas continued. "The Apple Watch will likely become the device that other wearables will be measured against, fairly or not. This will force the competition to up their game in order to stay on the leading edge of the market."
One of the key findings of the IDC tracker is that price erosion for devices is significant. "As with any young market, price erosion has been quite drastic," said Jitesh Ubrani, senior research analyst, Worldwide Mobile Device Trackers, in a statement. "We now see over 40% of the devices priced under $100, and that's one reason why the top 5 vendors have been able to grow their dominance from two thirds of the market in the first quarter of last year to three quarters this quarter. Despite this price erosion, Apple's entrance with a product priced at the high end of the spectrum will test consumers' willingness to pay a premium for a brand or product that is the center of attention."
The report also covers the top five wearable vendors, including Fitbit, the market leader in the global wearables market, followed by Xiaomi (Mi Band), Garmin, Samsung (Gear smartwatches), and Jawbone.