Wearables, such as smartwatches and fitness trackers, have been very popular in the last two years with consumers, but the hype about the devices is waning and the technologies behind them are becoming more commoditized, which will likely inspire changes and evolution in the devices themselves. One big coming change is the expected development of stand-alone personal wearable communication devices that will likely incorporate many devices into one starting in 2020.
Those are some key conclusions in a new report, "Wearable Technology 2016-2026–Markets, Players and 10-Year Forecasts," from research firm IDTechEx.
In 2016, the global market for wearables is worth more than $30 billion, with more than $11 billion of that coming from smartwatches, fitness trackers and similar devices, according to the report. Through 2018, IDTechEx expects the global market to grow 10 percent annually to more than $40 billion, followed by a rise of 23 percent to more than $100 billion by 2023. By 2026, the growth rate in wearables will slow to 11 percent, reaching a total of more than $150 billion a year, the report states. The study includes some 39 types of wearable product lines, including smartwatches, fitness trackers, smart eyewear, smart clothing, medical devices, headphones, hearing aids, basic electronic watches and more.
A big factor in the expected change and growth will be the increasing commoditization of wearables as devices become more commonplace and prices drop due to additional vendors entering the market and retail pressures, James Hayward, a co-author of the study, told eWEEK.
The wearables marketplace has roots in the first appearance of Google Glass in 2012, with the hype of wearables starting in 2013 and peaking in 2014 and 2015, the report states. "Now the hype has shifted, with more specific focus on sub-sectors, including virtual reality (VR), mixed reality and more," according to the report. "As such, while we view the generalized hype around 'wearables' as over, the hype around wearable technology products will sustain as the fashion and trends in language evolves."
Wrist-worn fitness trackers are still selling well, with global wholesale sales of about $1.5 billion today, but average retail prices have been falling by about 50 percent every six months over the last two years due to commoditization, the study states.
Wearables that have a positive future, according to the report, include VR and augmented-reality (AR) devices, as well as "mixed-reality devices that cross between the two. More than 1 million VR devices will be sold in 2016 around the globe, and the market is expected to grow at a rate of 73 percent through 2020, the report states. AR devices trail in adoption and technology, but are expected to grow into millions of sales by 2019 and tens of millions by 2021.
Smartwatches are hampered in the marketplace because they continue to be tied to smartphones for many of their capabilities, the report states. "Increasingly, we believe that smartwatches will move away from being a smartphone periphery and move towards being their own interchangeable device within a wider ecosystem of devices."
With all of this turbulence in the marketplace, that's where stand-alone personal wearable communication devices will come in, Hayward told eWEEK.
"It could be a watch, or it could be a box" that uses a radio beacon to link a user's data and personal information to their device at all times, he said. "What will it take for it to grow is that a user's central needs will have to be able to be filled" using the device.
The wearable communication device would essentially be a hub that can be worn or carried by a user, said Hayward. "We deliberately keep the definition fairly broad" since it could eventually take a wide variety of forms as they are created.