Market Intelligence – The wearable market is forecast to reach around 108M devices by 2018 with growth following the doubling from just under 20M devices in 2014 to over 40M next year and with revenue moving from $2B to $16B by the end of that time period.
However, despite the impressive growth in the space, founder/chief analyst and long time researcher at TECHnalysis, Bob O’Donnell, remained cool about the smart wearable device market in his recent update of the Worldwide Wearables Market, where he cautions that the space will continue to “struggle in the near term” in spite of the wave of new device announcements from such high flyers as Apple, (Apple Watch) and a raft of device announcements that seem to have dominated the mobile headlines of late. O’Donnell said “…serious questions remain about the breadth of appeal for wearable computing devices. As a result, TECHnalysis Research is predicting tepid real-world demand for the category in the near term…”. And while the company sees the doubling to 40M units number as seemingly impressive, O’Donnell points out that Apple sold that same number of iPhones in just one quarter of 2014.
Chief among the concerns the group sees in the wearable market is the failure to “articulate a clear, compelling value statement around the devices”, according to O’Donnell, adding “leaving consumers wondering why, or if they really need them”. The report includes numbers for wearables in multiple categories including head-, ear-, wrist- (both watch and bracelet versions) plus finger-worn and other devices with the major share moving from wrist-bracelet to smart watch (wrist) category through 2018. “The vast majority of wearable units and revenues (roughly 75% and 80% respectively) will be derived from the two wrist-worn wearable categories: smart watches and smart bracelets,” the report went on to say. Other categories include pocket devices and other unique iterations not covered above. For clients of his wearable market study O’Donnell also provides three scenario’s of baseline, pessimistic and optimistic that includes a “hit” product that could bring the category into the mainstream.
O’Donnell also brings some rigor to the wearable market space with a comprehensive definition of just exactly what is a “smart wearable device” published by the marketing research firm:
A smart wearable device is a battery-powered, portable electronic device worn on a human body that offers some level of onboard processing and runs some type of integrated software. Most wearables have integrated sensors of various types as well as connectivity options (either wired or wireless) to other smart devices, such as smartphones. Electronic devices that are worn on the body but don’t have their own built-in compute capability, such as basic Bluetooth headsets or heads-up displays, are not considered smart wearables.
Display Central Comment
We tend to agree with the TECHnalysis research assessment, in that the wearable market represents a horizon technology that is highly gated by battery life (as mentioned in the report). But perhaps O’Donnell may be missing a more important factor; we see the display, (sexy thin flexible) playing a major role in moving wearable devices into the mainstream. That said, the Apple Watch is a BIG disappointment, as covered in a recent Display-Daily article, Can Apple Watch Crack the Mainstream? several weeks ago.
Suffice it to say, as defined, O’Donnell may be right but the vision may be a bit skewed. For a comprehensive discussion on just what the market may require for the wearable market to take off see our follow-up article. – Steve Sechrist
