According to CCS Insight, 22 million wearable devices will be shipped in 2014 — more than double last year’s 9.7 million total. The latest report projects that over 250 million smart wearables will be in use by 2018, nearly 14 times more than in 2013.
“The wearables market is in its Stone Age right now. There needs to be huge improvements to broaden their appeal,” explains Marina Koytcheva, Director of Forecasting at CCS Insight.
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. Fitness and well-being trackers remain the fastest-growing category, given that they have a clearly defined purpose, user benefits and are relatively affordable. CSS Insight believes fitness trackers will account for over half of the 35 million wearables in use at the end of this year.
“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,” Koytcheva adds.
According to the report, CCS Insight 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.
A smart wearable category that will become much more prominent in the second half of 2014, CSS reveals, 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.”
North America currently leads the way in terms of adoption of wearables with 5.2 million wearables sold in 2013, and over 40% of all wearable devices currently in use are there. Reason being that a majority of companies are based in North America, while the region possesses a proven eager to adopt new technology. Western Europe is catching up and from 2016 is expected to buy more wearables than North America, the analysts predicted. Adoption will be slower in emerging markets and primarily driven by tech-savvy, affluent users.
“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,” Koytcheva points out.
To learn more, you can access the entire report here or view the detailed infographic from the research firm below.