Sales of smart wearable devices are forecast to grow from 9.7 million in 2013 to 135 million in 2018, according to CCS Insight’s global forecast. Wrist-worn devices are expected to account for 87 per cent of the devices sold in 2018, which will be made up of 68 million smart watches and 50 million smart bands.
“Quantified self” devices – which track things such as steps taken, sleep and calories burned – are currently the fastest growing category of wearables, which CCS Insight says can be attributed to their “clear purpose” and affordable prices. The researchers predict around 7 per cent of the population in developed markets will own a quantified self device by the end of 2018.
Such devices are likely to be popular Christmas gifts this year, fuelling strong growth of wearable sales in the final quarter. The researchers predict wearable shipments will rise 129 per cent year on year to 22 million in 2014.
In the second half of 2014, standalone cellular wearables with their own SIM cards that do not require a connection to a separate smartphone or computer are expected to become more prominent in the wearables category. However, these devices will face “significant challenges” as many consumers will be reluctant to take out additional contracts with their mobile operators, CCS Insight says.
Looking further ahead, CCS Insight forecasts strong future growth in smart watches, as the company expects many smart band manufacturers to update their ranges by adding devices with screens. By 2018 smart watches are expected to displace fitness bands altogether as their capabilities are expanded and prices come down.
Marina Koytcheva, CCS Insight director of forecasting, says: “The wearables market is in its Stone Age right now. There needs to be huge improvements to broaden their appeal. This is particularly acute when it comes to devices for women: wearables need to quickly move on from black, clunky devices – fortunately we’re starting to see the first steps in this direction.”
The category faces several challenges, as consumers struggle to come to terms with whether some wearables – such as Google Glass – are socially acceptable and brands in the sector also need to overcome privacy concerns over data collection.
Koytcheva says the market could still yet be changed “beyond recognition” if a major player such as Apple – which is reported to be developing an iWatch – enters the category.
She adds: “History shows us that when Apple enters a market it can reshape the way people think about a product.”
North America leads in terms of wearables adoption, with more than 40 per cent of all wearable devices currently in use in the region. The CCS Insight forecast says this is partially because many wearable companies – such as Google, Fitbit and Jawbone – are based there, but also because US consumers tend to be early technology adopters.
However, consumers in Western Europe are expected to buy more wearables than those in North America by 2016.