Wearable technology is making a big splash, and the latest numbers prove it. According to IMS Research , the global market for wearable technology posted $2 billion worth of revenues in 2011, and projections are that by 2016, the market will be worth $6 billion. The research also shows that 14 million wearable devices were shipped in 2011, and 171 million devices are forecast to be shipped by 2016.
IMS Research's findings were published last week in a report entitled: "World Market for Wearable Technology -- A Quantitative Market Assessment -- 2012." The report examined the world market for wearable electronic devices that are used in professional and consumer environments, and are worn by users for an extended period of time. The devices use advanced circuitry, are wirelessly enabled, and have the ability to process data.
The report found a growing need for the technology in healthcare, fitness, and wellness markets where these devices collect and electronically transmit a patient's vital signs. These vital signs include glucose readings, weight, or pulse. Leading products in this category include glucose monitors from Abbott Laboratories and Medtronic Inc., activity monitors, from Fitbit, Adidas miCoach, Nike Fuelband, and fitness and heart rate monitors from Garmin, Polar, and Suunto. (See: My Fitbit Experiment: End of the Line.)
However, while devices associated with healthcare have dominated the market, projections are that by 2016, infotainment will account for the largest revenue share, driven by the expected popularity of smart watches and smart glasses, Theo Ahadome, senior analyst at IMS Research asserts.
Ahadome sees Google's Smart Glasses and the rumored Apple Smart Watch as products that have the potential to take off in the consumer marketplace. With regard to the high tech industry, the wearable technology market brings new opportunities for chip manufacturers, component suppliers, and others to capture burgeoning opportunities.
Ahadome, who is the report's author, noted that growth in the wearable technology market is tied to the growth of the smartphone and gaming markets. According to IMS Research's figures, 485 million smartphones were shipped in 2011 and projections are that by 2016, over 1.2 billion smartphones will be shipped worldwide. There will also be an installed base of 8.7 billion cellular handset users in 2016, an increase from 5.8 billion in 2011.
The report notes that these trends will impact the wearable technology market in the following ways:
- Smartphones: As the number of smartphone users grows and the smartphone become the hub of information for its users, there will be an increasing number of devices that will connect to and exchange data with smartphones. In the healthcare and fitness markets such devices include continuous glucose monitors and activity monitors. Similarly, in the infotainment market, Smart Watches and Smart Glasses are expected to increasingly share data with smartphones.
- Smart Glasses: Smart glasses are expected to have built-in cellular connectivity, allowing them to independently receive and transmit data. Consequently, the growth of the Smart Glasses market is less dependent on growth in the smartphone market.
- Smart Watches: Smart watches, however, primarily serve as complementary to smartphones; they display information such as incoming calls and to control smartphone applications. As a result, the growth of the smartphone market directly influences growth of the smart watch market. The smartphone installed base hence serves as the total available market for smart watches.
- The Gaming Market: In 2011, it was estimated that there was an estimated 77 million registered PlayStation users and 35 million Xbox registered users worldwide. In comparison, there were only an estimated 50,000 Xbox users in 2002. The fast growing gaming market represents a significant opportunity for augmented reality devices such as heads-up displays and smart glasses, which aim to enhance [the] gaming experience.