Wearable Gadgets Are Still Not Getting The Attention They Deserve - Here's Why They Will Create A Massive New Market

Marcelo BallveOct 23, 2013, 07.45 PM

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BI Intelligence

There's still a great deal of skepticism out there about how big the market potential is for wearables - gadgets like smartwatches, connected fitness bands, and smart eyewear.

There are signs that some analysts and investors are starting to become believers. Recently, wearables company FitBit raised a $43 million round of financing, and IDC yesterday cited wearables as a fast-emerging category that may be helping slow down growth in the tablet market. Samsung has launched a smart watch, which ugly or not has raised awareness about wearables. Expectations for Apple's rumored iWatch are reaching a fever-pitch.

Speculation on the future market for wearables devices is a confusing mix of skepticism and hype. But in a recent report from BI Intelligence, we put hard numbers to our ideas and conservatively forecast a $12 billion market for wearable devices, led by wrist-worn gadgets. Wearables are about taking the ubiquity of the Internet one step further.

We also analyze various growth forecasts for the wearable computing market, explore the products and prospects of each component market - including bracelets, smartwatches, and eyewear, pocket-sized and clip-on devices, and examine the various barriers to entry for each, and look at how wearables could bring along new platform wars. Subscribers also gain instant access to our May 2013 Google Glass forecast. And our August 2013 Smart Watch Forecast.

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Here's a brief overview of the wearable computing market:

Market sizing estimates vary: According to IMS Research , the wearables market is poised to grow from 14 million devices shipped in 2011 to as many as 171 million units shipped by 2016. In a more recent estimate , ABI Research pegs the wearables market at 485 million annual device shipments by 2018. We believe this number is too high because of the uncertainty surrounding eyewear and smartwatches. We see global annual wearable device unit shipments crossing the 100 million milestone in 2014, and reaching 300 million units five years from now.
Bracelets: Right now, driven by their aptness for fitness and medical uses, bracelets dominate the wearables market. Even if wearable computing doesn't go mainstream, smart bracelets will always have a place in the burgeoning industry for smart medical devices, according to IMS Research. We believe fitness and medical wearables, taken together, will account for roughly 60% of the wearables market this year, and even a larger share in the future.
Smartwatches: Like fitness bands, they are employing wireless links - invariably, Bluetooth - to link up with a smartphone. But instead of collecting information, like most fitness bands, watches will display it. Promoters of smartwatches also highlight the fact that users will no longer have to constantly reach into their pockets for a smartphone - an action becoming more awkward as phone screen sizes grow.
Eyewear: In contrast to virtual reality, augmented reality lets you see ambient information while interacting with the real world. The most ambitious wearable product aimed at the consumer mainstream is Google Glass. Marketers see great potential in Google Glass. They are already familiar with augmented reality since they have experimented with print materials that are readable by smartphone applications and can create complementary ad experiences on-screen.