The up surging wearable device market is expected to hit lows after two years of stunned growth. According to the recent report, titled Wearable Device Market growth 2014 – 2020, by NPD DisplaySearch Reports, the market is likely to experience a slow-down after 2015 but will resume gradual growth from 2018 onwards. The shipment of wearable devices is expected to reach 48 million in 2014, followed by staggering 91 million in 2015. China will dominate the market with rapid growth but will slow down eventually, when consumers rebound from initial hype. The report presents the shipment forecast, pegged to three different scenarios, on the basis of consumer adoption, retention and product development.
The Three Market Divisions
The Forward into the Past, The Incidental to Essential and The Persuasive and Pervasive are the basis of catagorizing wearable device market forecast.
- The Forward into the Past: This includes the wealthy, high-status individuals with the desire to be the first to own a wearable gadget. But as the market tends to expand and price starts to decline due to the competition among new players in the market, fashion of the wearable devices ends.
- The Incidental to the Essential: Wearable devices, like the mobile phones, are likely to start out as incidental purchases but become an essential in our everyday lives. This sector would experience a slight downfall from 2015 to 2016 but, with the advent of local vendors, would witness an accelerated growth.
- The Persuasive and Pervasive: This segment comprises of health-conscious people for whom regular body-sensing, medical intervention and daily living assistance are a part of everyday life. The growth is gradual but firm with almost 200k shipment in 2020.
“We expect that the dynamics of the wearable market will be similar to DVD, LCD TV, smartphones, and other digital consumer markets with commoditized hardware. The arrival of Samsung, LGE, and other large, cost-efficient manufacturers to the wearable market would bring prices and margins down,” said Paul Gray, director of European TV research for NPD DisplaySearch.
China would witness a backlash in 2017. North America and Europe will also experience a decline but their retardation would not be as severe as China. However, the Chinese market would continue to grow, albeit slowly, thanks to the local vendors and unbranded suppliers. North America and China are reportedly about to witness a similar trend in the wearable device market.
The Major Players in the Wearable Device Market
- Fitbit, with its two products in the wearable band segment – Flex and Force – hogged the wearable market with nearly half the share of global wearable shipments in Q1 2014.
- Samsung Group (KRX:005930), with its Gear 2 and Gear Neo 2 smartwatches, led the smart wearable market in the latter half of 2013 but its share declined in Q1, 2014. The Korean-giant has recently announced the launch of Simband and SAMI (Samsung Architecural Multimodal Interactions).
- LG Electronics Inc. (KRX:066570) launched the G Watch which is compatible with all the Android devices.
- Pebble, capturing 35% of the market, emerged as the leader in the smart wearable band market.
- Google Inc. (NASDAQ:GOOG) is truly the pioneer in wearable devices market with Google Glass, Google Glass 2 and Android Wear.
Worldwide Smartwatch Shipments to reach 373 Million by 2020
The growth in wearable industry is primarily pegged to smartwatch devices. The market of smartwatch is expected to grow significantly in 2014 and the number of annual shipments are likely to reach an astounding 373 million by 2020. Low-cost Android powered devices are likely to fuel this growth.
Wearable devices appeal to gadget lovers and physical-fitness enthusiasts alike. In the coming years, we could witness public and private healthcare to recommend the watches to their patients. Various apps are already running and new ones are being developed targeting the users. Smartwatches could pose a good alternative to phones.
NPD DisplaySearch, part of The NPD Group, provides global market research and consulting specializing in the display supply chain, including trend information, forecasts and analyses developed by a global team of experienced analysts with extensive industry knowledge.