Wearables Shipments to Hit 22 Million in 2014 up 129% from 2013. By 2018 over 250 million smart wearables will be in use, 14 times more than in 2013.
Shipments of smart wearables are expected to grow from 9.7 million in 2013 to 135 million in 2018, according to CCS Insight’s new global forecast. The forecast predicts that wrist-worn devices will account for 87% of wearables to be shipped in 2018 — comprising 68 million smartwatches and 50 million smart bands with no screen or with a minimal, one-line display.
Quantified self devices, which track fitness and well-being, are the fastest-growing category. CCS Insight believes this can be attributed to their clear purpose, user benefits and increasingly affordable prices.
Commenting, Marina Koytcheva, CCS Insight’s Director of Forecasting says:
“Wearables are poised to be the perfect gift for the person who has everything this Christmas. We believe this will fuel strong growth in the final quarter of 2014 for smart bands, particularly fitness trackers, which will account for more than half of the 35 million wearables in use at end of 2014.”
However, Koytcheva cautions:
“the wearables market is in its Stone Age right now. There needs to be huge improvements to broaden their appeal. This is particularly acute when it comes to devices for women: wearables need to quickly move on from black, clunky devices; fortunately we’re starting to see the first steps in this direction.”
CCS Insight’s forecast also foresees strong future growth in smartwatches. The company expects many smart band manufacturers to extend their product ranges by adding devices with screens. As smartwatches broaden their appeal, capabilities are refined, new functions are added and prices fall, CCS Insight expects smartwatches to displace fitness bands and become the most used form of wearables.
North America currently leads the way in terms of adoption of wearables: 5.2 million wearables were sold in North America in 2013, and over 40% of all wearable devices currently in use are there. This is partially because many wearable companies are based in North America, but also because the region has proven eager to adopt new technology: a good example of this is tablets. But Western Europe is catching up and from 2016 is expected to buy more wearables than North America. Adoption will be slower in emerging markets and primarily driven by tech-savvy, affluent users.
A smart wearable category that will become much more prominent in the second half of 2014 is stand-alone cellular wearables. We expect a number of high-profile devices with their own SIM cards will be announced in the coming months. However, these devices will face significant challenges as people are reluctant to take out another contract with their mobile operator.
Reflecting more broadly on the wearables opportunity Koytcheva notes:
“The market is still in a chaotic stage of development, and there’s still a huge amount of uncertainty. Every category faces different risks: the way people use wearables is still changing, one type of device could kill sales in another category, people are unsure whether some wearables are socially acceptable, and intellectual property rights are a minefield for the dozens of start-ups entering the wearables market.”
As Koytcheva points outs:
“The market could be changed beyond recognition if a major player like Apple decides to get into the game. History shows us that when Apple enters a market it can reshape the way people think about a product.”