Report: 40.9 billion wireless connected devices expected by 2020

According to an updated market forecast from ABI Research, the installed base of active wireless connected devices will exceed 16 billion in 2014, an increase of nearly 20% from 2013. The number of devices will more than double from the current level, with 40.9 billion projected for 2020.

“The driving force behind the surge in connections is that usual buzzword suspect, the Internet of Things (IoT). If we look at this year’s installed base, smartphones, PCs and other ‘hub’ devices represent still 44% of the active total, but by end-2020 their share is set to drop to 32%. In other words, 75% of the growth between today and the end of the decade will come from non-hub devices: sensor nodes and accessories,” revealed Aapo Markkanen, Principal Analyst.

From a tech supplier’s strategic point of view, the critical question that lies ahead is how the plethora IoT devices will ultimately be connected. Until recently, the choices that product OEMs have faced have been fairly straightforward — with cellular, Wi-Fi, Bluetooth and others all generally addressing their relative comfort zones. Going forward, they will be in an increasing competition with each other, so for the suppliers the strategic stakes are getting much higher.

“The recently introduced Thread protocol, spearheaded by Nest Labs, is not only setting the bar higher for ZigBee in the 802.15.4 space, but also piling up pressure on Bluetooth suppliers to enable mesh networking. In the meantime, the LTE-MTC and LTE-M initiatives may well expand the market for cellular M2M, while startups like Electric Imp and Spark could do the same for Wi-Fi. And finally, we also shouldn’t ignore what’s going on with passive, proximity-based connectivity offered by RFID and NFC,” added ABI Research Practice Director Dan Shey.

Another prime example of this convergence is the newly-unveiled Open Interconnect Consortium (OIC), formed by tech leaders Atmel, Broadcom, Dell, Intel, Samsung and Wind River. The aim of this new project is to establish a common communication framework based on industry standard technologies to wirelessly connect and intelligently manage the flow of information among devices, regardless of form factor, operating system or service provider. The OIC also intends to deliver open source implementations for a variety of IoT market opportunities and vertical segments from smart home solutions to automotive and more, utilizing both existing and emerging standards like Wi-Fi, Bluetooth, Wi-Fi Direct, Zigbee, Zwave and Ant+.

The new Atmel | SMART product line includes the SmartConnect wireless IC family, which combines ultra-low power Atmel MCUs with wireless solutions and complementary software. The SmartConnect wireless portfolio is a family of self-contained, low-power, and certified modules bringing wireless Internet connectivity to any embedded design, without compromising on cost and power consumption. Adding to the already broad family are recently-acquired NMI’s 802.11n Wi-Fi and Bluetooth certified products. These innovative, highly-integrated solutions will accelerate seamless communication and connectivity for the IoT.

“Combined with our existing Wi-Fi and Zigbee solutions and industry leading microcontroller portfolio, Atmel is positioned for substantial growth in the Internet of Things marketplace,” explained Atmel CEO Steve Laub.

 

Smart car tech shifts IoT boundaries

For the automotive industry, the emergence of the rapidly evolving Internet of Things (IoT) constitutes a disruptive and transformative environment.

Atmel-powered AvantCar

According to ABI Research and practice director Dominique Bonte, this trend is characterized primarily by value chain and business model upheaval, as well as a ‘collaborate or die’ ecosystem friction reality prompting it to redefine and reinvent itself in order to capitalize on the huge opportunities in the new IoT economy.

“The absorption of the automotive industry in the wider IoT is driven by new connected car use cases such as EVs as a mobile grid and vehicles used as delivery locations,” he explained.

“As this IoT revolution unfolds, automotive innovation and value creation will be shifting to the boundaries with other verticals such as home automation, smart grids, smart cities, healthcare and retail.”

Indeed, vehicle-to-Infrastructure (V2I) and Vehicle-to-Retail (V2R) are projected to be the dominant segments with respectively 459 and 406 million vehicles featuring smart car IoT applications by 2030, followed by V2H (Vehicle-to-Home) and V2P (Vehicle-to-Person) with 163 and 239 million vehicles respectively. Meanwhile, Vehicle-to-Grid (V2G) services will be offered on 50 million vehicles in 2030.

“However, in order to fully unlock the automotive IoT potential it will be critical to address a wide range of barriers including security, safety, regulation, lack of cross industry standards, widely varying industry dynamics and lifecycles and limited initial addressable market sizes,” Bonte added.

Hardware renaissance sparked by the IoT

Analysts at ABI Research estimate the number of developers involved in Internet of Things (IoT) activities will reach 1.7 million globally by the end of 2014 – with the broader IoT ecosystem forecast to surpass three million developers in 2019.

“Currently, the IoT activity is largely polarized between hobbyists and makers at one end, and enterprise-level developers at the other end,” ABI principal analyst Aapo Markkanen explained.

Image Credit: Wilgengebroed on Flickr (via Wikipedia)

“But owing to a combination of various enablers, we can also see a growing number of startups taking the commercial plunge and starting to productize the concepts they’ve prototyped earlier with [development boards such as the] Arduino. That productization, however, can be an extremely difficult feat to pull off, requiring very diverse skillsets.”

According to Markkanen, the core enablers for productization comprise purpose-built cloud platforms and development kits, which are making the IoT accessible to developers who may differ greatly in terms of their resources and commitment.

“There are also several other, more indirect enablers that will be critical for the IoT’s evolution,” he said.

 “These include sensors and sensor engines, affordable 3D printers, as well as crowdfunding platforms. Collectively, all these building blocks could eventually translate into a perfect storm of hardware innovation.”

ABI Research practice director Dan Shey expressed similar sentiments.

“After all the talk about hardware being irreversibly commoditized and software ‘eating the world’ we may be actually soon witnessing a countertrend in the technology industry, driven by the consumer IoT,” he added.

“Consumers will shun away from anything that is not inspiringly designed and robustly produced, so any consumer-facing IoT play needs to deliver on both of those fronts if it’s to have any traction. In this sense, the IoT could represent the beginning of a hardware renaissance.”

Salesforce launches dev kit for wearables

Salesforce has rolled out a software development pack for wearable devices. Backed by a number of industry heavyweights such as ARM, the dev kit is expected to accelerate adoption of wearables in the enterprise.

“Wearables are the next phase of the mobile revolution,” said Salesforce exec Daniel Debow.

“With Salesforce Wear, companies can now capture the massive opportunity these devices offer to connect with customers in new ways.”

According to a recent IHS white paper titled “Wearable Technology – Market Assessment,” roughly 50 million wearable units will be sold in 2014, while more than 180 million are predicted to sell in 2018.

“With the massive number of devices coming into market, it is imperative that companies understand how consumers will operate in a hands-free world. Wearables are the future of mobile, and companies can now discover new ways to market, sell, service and more,” added Debow.

As we’ve previously discussed on Bits & Pieces, wearable device technologies will become an integral part of enterprise mobile enablement strategies – increasing at an impressive CAGR value of 56.1% over the next five years.

As senior ABI Research enterprise analyst Jason McNicol notes, the North American region is expected to be the largest, growing at a CAGR value of 39% over the next five years. Meanwhile, the Asia-Pacific region is slated to become the second largest market, outpacing Europe by 2019 with a CAGR of 90%.

“There are cases being made for wearables in the enterprise despite the relative newness of the technology. However, which wearables are primed for enterprise usage and adoption is a more important question,” McNicol explained.

Atmel-powered Agent Smartwatch

“Wearable technology such as smart glasses and those used for healthcare are better suited for the enterprise as corporate-liable devices. Smartwatches, on the other hand, will most likely follow the trend of BYOD into the enterprise.”

More specifically, ABI Research recently identified six types of wearable devices: smart glasses, cameras, smart watches, healthcare, sports/activity trackers and 3D motion trackers. Healthcare wearables, smart glasses and smart watches will be the dominant form-factors purchased by the enterprise and used by employees.

All told, the research firm expects a total of 90 million wearable devices to ship in 2014 across multiple markets. As senior analyst Joshua Flood points out, wearable tech will be characterized by a diversity of products, although only those with clear use-cases and target audiences are likely to succeed.

“[2014] will be a critical period for the acceptance and adoption of wearable devices. Healthcare and sports and activity trackers are rapidly becoming mass-market products,” the analyst confirmed.

“On the flipside, wearable devices like smart watches need to overcome some critical obstacles. Aesthetic design, more compelling use cases, battery life and lower price points are the main inhibitors. How vendors approach these challenges and their respective solutions will affect the wearable market far in the future.”

According to Flood, chipset vendors are beginning to pave the way with interesting wearable reference designs that will allow non-technology OEMs and brands to quickly jump upon the wearable device bandwagon and offer diverse, innovative, unique and stylish solutions.

“While smart glasses could be the starting point moving away from today’s touchscreen smartphones to eyewear devices using a voice interface, pricing, battery life and style will all play crucial roles for market traction,” he continued.

“Due to these limitations, the enterprise sector will be the early target for smart glasses before they are ready for mass-market adoption. [We] expect more than two million smart glasses [to] ship in 2014, [with] the category forecast to grow rapidly from 2015 onwards. Mobile enabling technologies like augmented reality will play a vital part in enhancing smart glass capabilities.”

Indeed, smart glasses and smartwatches will account for a relatively small segment of the wearable device market in 2014, with medical, wellness and sports and activity wearable devices expected to provide the bulk of wearable device shipments this year.

“Activity trackers will continue to be the most popular wearable device as people carefully monitor their activity levels and energy output. Concerns around weight management and even obesity are the prime drivers behind this wearable device type,” Flood concluded.

“The collection and analysis of the captured personal performance data through associated websites and their communities is also a crucial element in building out the use-case.”

An $18 billion wearables enterprise market

Analysts at ABI Research confirm that wearable device technologies will become an integral part of enterprise mobile enablement strategies – increasing at an impressive CAGR value of 56.1% over the next five years.

Atmel-powered Agent smartwatch

As expected, the North American region will be the largest, growing at a CAGR value of 39% over the next five years. Meanwhile, the Asia-Pacific region is slated to become the second largest market, outpacing Europe by 2019 with a CAGR of 90%.

“There are cases being made for wearables in the enterprise despite the relative newness of the technology. However, which wearables are primed for enterprise usage and adoption is a more important question,” senior ABI Research enterprise analyst Jason McNicol explains.

“Wearable technology such as smart glasses and those used for healthcare are better suited for the enterprise as corporate-liable devices. Smartwatches, on the other hand, will most likely follow the trend of BYOD into the enterprise.”

More specifically, ABI Research has identified six types of wearable devices: smart glasses, cameras, smart watches, healthcare, sports and activity trackers and 3D motion trackers. Healthcare wearables, smart glasses and smart watches will be the dominant form-factors purchased by the enterprise and used by employees.

“Like any digital device supporting the enterprise, wearables will need to be secured and managed,” ABI practice director Dan Shey adds.

Atmel-powered Agent smartwatch

“Wearable use cases in field services, maintenance, training, etc., highlight the need for enterprise mobility management providers, mobile operators, enterprise application and platform vendors, system integrators, device OEMs and other enterprise mobile suppliers to add services to support wearables. Enterprise connectivity continues at a rapid pace and its benefits are only achieved when end-to-end solutions – including security and management services – support the devices and connections.”

It should be noted that ABI Research expects a total of 90 million wearable devices to ship in 2014 across multiple markets. As senior analyst Joshua Flood notes, wearable tech will be characterized by a diversity of products, although only those with clear use-cases and target audiences are likely to succeed.

“[2014] will be a critical period for the acceptance and adoption of wearable devices. Healthcare and sports and activity trackers are rapidly becoming mass-market products,” the analyst says.

“On the flipside, wearable devices like smart watches need to overcome some critical obstacles. Aesthetic design, more compelling use cases, battery life and lower price points are the main inhibitors. How vendors approach these challenges and their respective solutions will affect the wearable market far in the future.”

According to Flood, chipset vendors are beginning to pave the way with interesting wearable reference designs that will allow non-technology OEMs and brands to quickly jump upon the wearable device bandwagon and offer diverse, innovative, unique and stylish solutions.

“While smart glasses could be the starting point moving away from today’s touchscreen smartphones to eyewear devices using a voice interface, pricing, battery life and style will all play crucial roles for market traction,” he continues.

“Due to these limitations, the enterprise sector will be the early target for smart glasses before they are ready for mass-market adoption. [We] expect more than two million smart glasses [to] ship in 2014, [with] the category forecast to grow rapidly from 2015 onwards. Mobile enabling technologies like augmented reality will play a vital part in enhancing smart glass capabilities.”

Indeed, smart glasses and smart watches will account for a relatively small segment of the wearable device market in 2014, with medical, wellness and sports and activity wearable devices expected to provide the bulk of wearable device shipments this year.

“Activity trackers will continue to be the most popular wearable device as people carefully monitor their activity levels and energy output,” Flood concludes. “Concerns around weight management and even obesity are the prime drivers behind this wearable device type. The collection and analysis of the captured personal performance data through associated websites and their communities is also a crucial element in building out the use-case.”

Moving beyond the wearable future hype

On March 8th, the Chinese American Semiconductor Professionals Association (CASPA) held a symposium titled “The Wearable Future: Moving Beyond the Hype; the Search for the Holy Grail and Practical Use Cases.”

As SemiWiki’s Daniel Nenni notes in a recent blog post, the symposium, hosted at the Intel HQ Auditorium in Santa Clara, was standing room only. Dr. Reza Kazerounian, SVP & GM, Microcontroller Business Unit of Atmel, delivered a keynote speech at the event. 

According to Dr. Kazerounian, the Internet of Things (IoT) is opening up fresh horizons for a new generation of intelligent systems that leverage contextual computing and sensing platforms, effectively creating new markets.

“One of these platforms is the wearable category of devices, where the combination of sensors using low-power sensor fusion platforms, and short-range wireless connectivity, are giving rise to a variety of exciting end markets. From self-quantification to a variety of location-based applications, to remote health monitoring, wearables are becoming the harbinger for a whole host of services,” he explained.

“With the right set of biometric sensors combined with local fast data analytics, wearables have the potential to revolutionize the health care industry. These devices can provide real-time data and contextual information along with all the health care requirements, improving the quality of care and lowering the overall cost of care.”

Indeed, as we’ve previously discussed on Bits & Pieces, sports and healthcare functionality currently dominates shipments and is expected to drive future wearable device adoption. 

According to analysts at ABI Research, the most popular device functionality is heart rate monitoring – with close to 12 million devices shipped in 2013. These single function devices are designed to communicate with nearby hubs such as smartphones or activity sports watches. 
Pedometers and activity trackers were the next two most popular devices, accounting for around 16 million devices combined in 2013.

“The market for wearable computing devices is driven by a growing range of wireless connected wearable sports, fitness and wellbeing devices,” confirmed Jonathan Collins, principal analyst at ABI Research.

The Atmel-powered (SAM4L) Amulyte Pendant

“Heart rate and activity monitors will outpace shipments of smart watches and glasses for some years to come, and they will provide the essential foundation for the development of the broader wearable market.”

Collins also noted that wearable devices will increasingly move into healthcare services over the next five years.

“Sports, fitness and wellness devices will increasingly be augmented by connectivity to the emerging number of smart watches and glasses devices that become available over the next five years,” he said. “Likewise, general use wearable devices will increasingly support aspects of health monitoring. The interplay between health monitoring and wearable devices will be crucial in the development of both these markets.”

Canalys analyst Daniel Matte expressed similar sentiments about a related space in late 2013 when he confirmed that wearable bands represented a massive opportunity in the medical and wellness segment.

“The wearable band market is really about the consumerization of health… There will be exciting innovations that disrupt the medical industry this year. With the increased awareness about personal well-being they will bring to users, having a computer on your wrist will become increasingly common,” he added.

Wearables shipments expected to surge

Industrial Economics and Knowledge Research Center (IEK) analyst Hou Chun-Yuan says worldwide wearable device shipments will increase approximately 499 percent to 190 million units in 2018, up from 31.7 million units 2014. 

According to Hou, the global market for wearable devices like smartwatches and wristbands is forecast to grow significantly this year as various technical barriers fall by the wayside.

Atmel-powered Agent smart watch

However, higher entry barriers for smartglasses and bioelectronics will (initially) limit vendors to a relatively smaller number of shipped devices compared to their smartwatch and wristband counterparts.

“Wearable devices will become the information and communications technology’s [ICT] next growth driver as demand for mobile devices, as well as traditional PCs, weakens,” Hou told a Taipei forum in a statement quoted by Helen Ku of the Taipei Times. 

More specifically, Hou says new wearable devices in 2014 will likely be accessories to smartphones. Linking via Bluetooth, wearables such as smartwatches and wristbands will be tasked with monitoring and transmitting heart rates.

In addition, Hou notes that smartglasses have the potential to generate huge demand because they can perform tasks from the first-person point of view.

“Smartglasses will become ‘killer products’ as they can take pictures within a wink of the eye, or display information to the person in a direct way,” he added.

Last, but certainly not least, Hou emphasized that current wearable devices will require more user-friendly designs, along with low-power sipping chipsets. 

Jonathan Collins, principal analyst at ABI Research recently expressed similar sentiments.

“The market for wearable computing devices is driven by a growing range of wireless connected wearable sports, fitness and wellbeing devices,” he confirmed. “Heart rate and activity monitors will outpace shipments of smartwatches and glasses for some years to come and they will also provide the essential foundation for the development of the broader wearable market.”

90 million wearables to ship in 2014

Analysts at ABI Research expect 90 million wearable devices to ship in 2014. As senior analyst Joshua Flood notes, wearable tech will be characterized by a diversity of products, although only those with clear use-cases and target audiences are likely to succeed.

Amulyte pendant powered by Atmel’s SAM4L

“The next 12 months will be a critical period for the acceptance and adoption of wearable devices. Healthcare and sports and activity trackers are rapidly becoming mass-market products,” the analyst explained.

“On the flipside, wearable devices like smart watches need to overcome some critical obstacles. Aesthetic design, more compelling use cases, battery life and lower price points are the main inhibitors. How vendors approach these challenges and their respective solutions will affect the wearable market far in the future.”

According to Flood, chipset vendors are beginning to pave the way with interesting wearable reference designs that will allow non-technology OEMs and brands to quickly jump upon the wearable device bandwagon and offer diverse, innovative, unique and stylish solutions.

“While smart glasses could be the starting point moving away from today’s touchscreen smartphones to eyewear devices using a voice interface, pricing, battery life and style will all play crucial roles for market traction,” he continued.

“Due to these limitations, the enterprise sector will be the early target for smart glasses before they are ready for mass-market adoption. [We] expect more than two million smart glasses [to] ship in 2014, [with] the category forecast to grow rapidly from 2015 onwards. Mobile enabling technologies like augmented reality will play a vital part in enhancing smart glass capabilities.”

Indeed, smart glasses and smart watches will account for a relatively small segment of the wearable device market in 2014, with medical, wellness and sports and activity wearable devices expected to provide the bulk of wearable device shipments this year.

“Activity trackers will continue to be the most popular wearable device as people carefully monitor their activity levels and energy output,” Flood added.

“Concerns around weight management and even obesity are the prime drivers behind this wearable device type. The collection and analysis of the captured personal performance data through associated websites and their communities is also a crucial element in building out the use-case.”

150M utility meters in China up for two-way comms

Since kicking off its national smart metering project at the turn of the decade, more than 200 million new electricity meters have been deployed across China. Nevertheless, only around 50 million have been equipped with bi-directional capabilities designed to support support true smart meter capabilities such as demand response.

Photo Credit: Wikipedia (Thisisivor)

According to ABI Research principal analyst Jonathan Collins, China’s meter project is set to “get smarter,” creating another wave of opportunity for companies like Atmel.

“China’s smart meter rollout is a key deployment representing a significant share of smart meter shipments and investment worldwide. The program is reaching a key stage where connectivity will come to already deployed and new meters alike,” he explained.

Atmel’s smart energy platform

“Increasingly, that connectivity will be bi-directional as China’s utilities’ smart grid plans expand to manage smart meter use as well as collect usage data. Investment to deliver bi-directional communications will also bring a further wave of competition from Chinese and overseas technology providers.”

In addition, Collins noted that existing specifications have ensured meters deployed over the past five years can be upgraded to support bi-directional connectivity.

“Combined with a recent commitment to consider wireless as well as PLC connectivity, this means there is a growing opportunity for existing and new hardware providers,” the analyst concluded.

Atmel Smart Energy Platform

“The shift to greater connectivity provides further potential for non-Chinese players to see their technology included and many suppliers are looking to partner with Chinese meter manufacturers to enable this. The next 12 months heralds a key period of technology assessment that will drive new industry partnerships as players bid to gain greater traction in the Chinese market.”

Forrester sees a bright future for wearables

Forrester analyst JP Gownder says wearables are just taking off and have a bright future ahead of them.

“Sure, wearables are facing a hype bubble. So did the Internet; that didn’t make it any less significant in the long run,” Gownder opined in a recent blog post. 

“I’m impressed with the wide array of companies, entrepreneurs and agencies innovating in this space, which is really more of a long tail of different computing market segments.”

Image Credit: Adafruit (Atmel-powered Gemma)

According to the analyst, 2014 will see commercial availability of new wearable devices, a richer set of business models, the entry of bigger players (like Apple), and the maturation of business models. 

Specifically, Gownder emphasized that enterprise wearables have a particularly rich future ahead of them, often in customer-facing situations.

As we’ve previously discussed on Bits & Pieces, wearables are expected to make a huge splash at CES 2014 this January in Las Vegas. Indeed, Angela McIntyre, research director at Gartner, confirmed that digital health and fitness will be one of the hottest segments at CES 2014 – with 40 percent of exhibitor floor space expanded for the lucrative segment.

Atmel-powered Agent smart watch

To be sure, despite some of the inevitable hype surrounding wearables, the segments for fitness and personal health devices have been among the first to gain traction.

“Wearable electronics has its strongest consumer base among fitness enthusiasts and wider consumer interest in these devices is leading to broader adoption. The worldwide revenue from wearable electronic devices, apps and services for fitness and personal health is anticipated to be $1.6 billion this year, increasing to $5 billion by 2016,” McIntyre explained.

Image Credit: Adafruit

“[In addition], wearables support the ‘quantified self’ trend of people tracking their vital signs, activities, and capturing images of what they experience during the day. The fun of wearing and using gadgets to track fitness and health is appealing, and so is using their apps and services. Online communities provide camaraderie with those having similar goals, [with] wearable electronics providing new motivation to consumers for improving fitness and health.”

It should also be noted that analysts at ABI Research see wearable wireless device revenues exceeding approximately $6 billion in 2018. Of the four segments tracked, sports, fitness and wellness are the largest, never dropping below 50% share of all device shipments over the forecast period.

Interested in learning more about wearable tech? You can check out Atmel’s white paper on the subject here.