Watching Wearables Explode in 2015

By Mobile Enterprise Editors — June 13, 2014

The Smart Watch Marketplace at 2015 International CES will return for a second year and is set to feature innovative companies showcasing the latest advancements in smart watch technology—state of the art wrist-wear transformed by GPS capabilities with installed music players, health monitors, message indicators and more. The 2015 CES is the global gathering place for consumer technology enthusiasts and businesses and will run January 6-9, 2015 in Las Vegas, Nevada.
 
“There is an overwhelming demand for wearable technology in the marketplace right now and smart watches are quickly becoming the accessory to have,” said Karen Chupka, senior vice president, International CES and Corporate Business Strategy, CEA. “The huge increase in size and scope of our Smart Watch Marketplace shows the growth potential for this category as smart watches become both fashionable and mainstream, with new capabilities and functions set to debut at the 2015 CES.”
 
According to CEA research, Understanding the Market for Wearable Health and Fitness Devices, 9% of online U.S. adults plan to purchase a smart watch in the next 12 months. The most important smart watch features to potential buyers are fitness-focused, including health monitoring (91%), peak performance monitoring (90%) and providing workout routines (82%). CEA’s U.S. Consumer Electronics Sales and Forecast shows wholesale (factory) projections to grow from 600,000 units and $95 million in revenue for 2013 to 960,000 units and $177 million in revenue for 2014.
 
Double the Space
In total, smart watch exhibits at the 2015 CES are expected to cover nearly 2,000 net square feet (nsf) of exhibit space, up from 900 nsf at the 2014 CES. The Smart Watch Marketplace will be located at CES Tech West, which includes exhibits at the Sands Expo (Sands), The Venetian, Wynn Las Vegas and Encore at Wynn (Wynn/Encore).
 
CES Tech West will also feature leading companies and the newest innovations in lifestyle technologies, including fitness and health tech, the Internet of Things, sensors, startups and other high growth technologies.
 
It’s the fitness and health tech that dominated the market, according to ABI Research. “Activity Trackers are currently the most viable consumer electronics wearable device category, because they have a clear use case that cannot be matched by smartphones, in contrast to smartwatches,” says senior practice director Nick Spencer. “End users have been happy to ditch their watches and use smartphones to tell the time, so extending smartphone functions to the watch is a weak use case and retrograde step.”
 
Smartwatch sales dropped significantly in Q1 2014 compared to Q4 2013, said ABI, due in small part to the seasonal effect of Christmas, but largely due to the imminent launch of Samsung’s Gear smartwatches and Gear Fit activity tracker.
 
The Samsung Gear dominated sales in Q4 2013 (N.B. mainly through bundles with the Samsung Galaxy Note III), but retailers and distributors were looking to clear their Samsung Gear 1 channel inventory in anticipation of the upgrade in Q2 2014.
 
“We shouldn’t dismiss smartwatches, which are evolving and, if you believe in reincarnation, a nascent category,” adds Spencer. “Smartwatches will develop rapidly in 2014 and 2015, with hybrid activity tracker/smartwatches soon to hit the market, more specialized components being developed and most importantly the use case is improving through a growing applications ecosystem. As the value proposition of smartwatches increases, however, the price will still need to decrease to balance with end-user expectations.”
 
ABI Research expects 10 million activity trackers to be shipped in 2014 and 7 million smartwatches.

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