The wearable technology market could reach 385 million people in a few years, analysts believe.
“Wearable technology will be the next generation of devices to transform how individuals consume and use information,” Piper Jaffray’s Erinn Murphy and Christof Fischer said in a recent note to clients.
In fact, there could be more people using wearable devices than there are people in the U.S. and Canada in a matter of just a few years. That’s because, Murphy and Fischer anticipate that the body tech space will grow from 21 million units last year to 150 million units in 2019 — representing a CAGR of 48%. This surge is expected to be driven primarily from smartwatches and fitness bands. Specifically, they predict that such bands will yield a CAGR of 31%, while smartwatches are projected to see an 82% rise.
As a whole, it is believed that the target market for wearables includes all consumers 15 years and older living in developed nations — which equates to roughly one billion people.
“We believe that tablet adoption is a good indicator of wearable adoption because tablets and wrist wearables do not generally require network contracts and are generally complementary to a computer or smartphone, respectively. For tablets, roughly 20% of the developed nation’s population has a tablet, according to our estimates. This would therefore point to a longer-term unit potential of 230 million units for the category. To be clear, we think this is still conservative given the more accessible price point of wearables (particularly in fitness bands),” the analysts wrote.
According to them, “We think adoption in the range of 20%-30% is more realistic which would point to a range of 230 milion-385 million unit potential for the category with time.”
The firm also noted three “mega secular trends” that will help spur growth in the relatively new market: ongoing health and fitness traction, the “quantified self” movement, and the convergence between brands and technology.
First, Murphy and Fischer pointed to a trend where health and wellness are “at the heart of consumer lifestyles” as global spending on fitness has surpassed $500 billion. Aside from that, trackers appeal to a much greater audience, as they fulfill the needs of individuals across nearly every demographic.
As for “the concept of incorporating technology into aspects of daily life,” wearables will enable users to better record and analyze their daily activity, while raising their awareness about how to adapt a personally healthier lifestyle. The engagement with these devices is coupled with growing online communities.
Last but not least, a vast number of brands are now taking large strides in increasing their engagement with consumers. Among those companies are the likes of Nike, Under Armor, Fossil, Ralph Lauren and Guess.
[h/t Business Insider]