Smartwatches Are The Breakout Category That Will Finally Ignite The Wearable Computing Market

Wearables face unique obstacles that will lead them to have less of an immediate market impact compared with tablets and smartphones.

For now, most of the devices need to connect with a smartphone or tablet for most of their functionality.

Wearables also suffer from a perception problem. Consumers still don't understand how a wearable might really benefit them. $4 from $4, we also discuss other barriers to adoption, including price, lack of functionality, and style.

We also look at how how the wearables market will perform in the long run. We forecast out shipments numbers, explain why the smartwatch will be the leading wearable device category going forward, and analyze proprietary results from our BI Intelligence consumer survey on smartwatch purchase intent.

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Here are some key points from the report:

• $4. We estimate the global wearables market will grow at a compound annual rate of 35% over the next five years, reaching 148 million units shipped annually in 2019, up from 33 million units shipped this year.
• $4. We estimate smartwatch shipments will rise by a compound annual rate of 41% over the next five years. Smartwatches will account for 59% of total wearable device shipments this year, and that share will expand to just over 70% of shipments by 2019.
• $4. The Apple Watch will account for 40% of smartwatch shipments in 2015 and reach a peak 48% share in 2017.
• Fitness bands and miscellaneous wearable device types, like smart eyewear, will continue to cater to niche audiences>$4. Fitness bands, because of their appeal to niche audiences interested in health and exercise, will see their share of the wearable device market contract to a 20% share in 2019, down from 36% this year. There will be some blur between fitness bands and smartwatches.
• Now that both Apple and Google are in the smartwatch market, they will dominate, much as they have in the smartphone and tablet markets>$4. Because these platforms make up over 90% of the entire mobile platform market, many mobile users interested in wearable devices will gravitate toward Apple Watches and Android Wear-based devices.
• Barriers still persist, and these will inhibit consumer wearables adoption and usage>$4. Smartwatches in particular must become standalone computing devices with more robust functionality for the devices to become mainstream. Other barriers include small screen size, clunky style, limited battery life, and lack of a "killer app," that can drive adoption.

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In full, the report:

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