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Apple’s introduction this month of its Watch will help fuel what Gartner analysts say will be growing interest in the wearable computing device toward the end of this year and into 2015.
In a report Sept. 17, the analysts noted that nine of the top 10 smartphone makers are moving into the wearables market—compared with two such vendors last year—and that by 2016, smartwatches will make up about 40 percent of consumer devices worn on the wrist.
However, despite the expected growing popularity of such devices, vendors will face some challenges, ranging from balancing the competing factors of design and usability—around such issues as battery life—and growing competition from original design manufacturers (ODMs) from China, they said.
“Apple has finally unveiled its Apple Watch, which we expect to trigger more consumer interest once it starts shipping in 2015,” Angela McIntyre, research director at Gartner, said in a statement.
Other research firms expect the wearable device market to grow. IDC in April said more than 19 million wearable devices will ship this year, while ABI Research analysts in June said they expect 10 million activity trackers and 7 million smartwatches to ship in 2014.
And a growing number of system and component makers are eyeing the growing segment. Most recently, Intel officials at the company’s Intel Developer Forum this month showed off a wide range of Intel-based wearable devices, from the MICA bracelets to BioSport In-Ear headphones to Basis smartwatches, as well as a bowl that can charge such devices wirelessly.
Like the MICA—which Intel developed with Opening Ceremony—Apple’s Watch will be pricey, with the lowest-cost one starting at $349. (Intel has said MICA will be priced at less than $1,000.) That shouldn’t slow down interest, however, McIntyre said.
“As with the iPhone, Apple’s high-price strategy for the Watch will limit its market share; yet, with its attention to design and the user interface, we believe this product will attract many users,” she said.
Devices based on Google’s Android mobile operating system were first to come onto the market, with mixed results, according to Annette Zimmermann, research director at Gartner. However, she expects interest in these devices also to track upwards. The designs of the latest smartwatches are a step up over earlier ones, and give users an idea of the features that Android Wear will offer, such as voice search, turn-by-turn navigation and contextual reminders, Zimmerman said.
“The Sony Smartwatch products and the Samsung Gear were early products that received much attention in the press but less enthusiasm from consumers due to their unclear value proposition and flawed design,” she said. “In 2014 we are seeing a few more positive developments in terms of design and user experience … and we therefore expect consumers to show more interest in these products in the second half of the year.”
Apple Watch to Fuel Wearable Device Market, Gartner Says
However, there will be challenges, the analyst said. Recent tests have shown that smartwatches and fitness devices can be a drain on the battery life of the smartphone to which they’re connected. Given the importance of battery life to mobile device users, having a smartwatch that forces them to charge their smartphones more often may make them wary of adopting such devices.
In addition, consumers are expected to add more connected devices that will need to be charged going forward, which will put a further burden on them. A smartwatch with a battery that lasts for months is more preferable, but a more efficient battery would mean a less light and sleek design, they said.
“We are currently seeing two opposing trends in the market with regards to form-factor evolution,” Zimmerman said. “On the one hand, there are vendors offering smart wrist-wearables in a familiar watch-like form factor. On the other hand, in the past six to nine months, we have seen vendors launching products that resemble the early fitness wristbands, but come with displays that add significant functionality, including message and call alerts. These crossover products are generally marketed as fitness devices, but with the strong slant toward the communication aspect.”
Growing competition from Chinese ODMs also will be a challenge for device makers like Fitbit and Jawbone, the analysts said. Some ODMs already have come out with products, though most are sold only in China. However, international expansion by these vendors is coming, according to Gartner.
“International expansion will start to accelerate in 2015, and in this context, we expect several Chinese vendors to build on Android Wear in parallel to create more appeal,” McIntyre said. “Certainly, they are faced with the same hurdles regarding design as all international vendors, but we also expect them to leverage one thing that has been to their constant advantage in the smartphone and tablet market: the cost advantage of the Chinese supply chain ecosystem.”
With this supply chain advantage, Chinese vendors may be able to bring smartwatches based on Android Wear and which cost around $30 to market, which could further drive mass adoption of the devices, the analysts said.