Home » REPORTS & ANALYSIS

Survey Analysis: Wearable Devices need to be More Useful (Gartner)

By |January 23rd, 2017|REPORTS & ANALYSIS, Surveys & Articles, Wearables Market Research|

High Abandonment Rates Indicate the Need for More Compelling Value Propositions to Drive Greater Adoption

The abandonment rate of smartwatches is 29 percent, and 30 percent for fitness trackers, because people do not find them useful, they get bored of them or they break, according to a survey by Gartner, Inc.

“Dropout from device usage is a serious problem for the industry,” said Angela McIntyre, research director at Gartner. “The abandonment rate is quite high relative to the usage rate. To offer a compelling enough value proposition, the uses for wearable devices need to be distinct from what smartphones typically provide. Wearables makers need to engage users with incentives and gamification.” 

The 2016 Gartner Personal Technologies Study surveyed 9,592 online respondents from Australia, the U.S. and the U.K. between June and August 2016, to gain a better understanding of consumers’ attitudes toward wearables, particularly their buying behavior for smartwatches, fitness trackers and virtual reality (VR) glasses.

According to the survey, smartwatch adoption is still in the early adopter stage (10 percent), while fitness trackers have reached early mainstream (19 percent). Only 8 percent of consumers have used VR glasses/head-mounted displays (excluding cardboard types).

The survey found that people typically purchase smartwatches and fitness trackers for their own use, with 34 percent of fitness trackers and 26 percent of smartwatches given as gifts.

“Continued growth in the adoption of smartwatches and fitness trackers will now be from mainstream consumers instead of early technology adopters,” said Ms. McIntyre. “The greatest hurdle for fitness tracker and smartwatch providers to overcome is the consumer perception that the devices do not offer a compelling enough value proposition.”

Survey respondents indicated that wearable devices are priced too high, given their perceived usefulness. Gartner believes that wearable providers that do not have a strong brand name will find it more difficult to grow market share, competing directly with popular brands. Instead, they should accept lower margins and provide an alternative that is priced significantly lower than top brands, but still has good quality for price-sensitive consumers.

The survey also revealed that the designs of smartwatches and fitness trackers are not appealing to consumers. To overcome this concern, Gartner recommends wearable providers partner with companies that design, brand, market and distribute watches and fashion accessories because they have experience setting style trends, marketing lifestyle devices and have established retail channels.

Smartwatches still for early tech adopters

According to the survey, the U.S. is leading smartwatch usage at 12 percent, while the U.K. is at 9 percent and Australia at 7 percent. Usage is up from Gartner’s 2015 consumer survey, which showed that 8 percent of respondents in the U.S. and 5 percent in the U.K. used smartwatches.

Smartwatch usage is clearly higher among people 44 years old and younger. More than half of people who use a smartwatch (58 percent) use it every day, and those who don’t (33 percent) use it at least several times a week.

“The key to creating a value proposition to interest mainstream consumers is lifestyle messages around health tracking and the convenience of receiving alerts on the wrist, instead of via the phone,” said Ms. McIntyre. “The benefit will increase as these devices gain the capability to function more independently from the phone.”

Fitness trackers reach early mainstream

The survey also showed that the U.S. is leading fitness tracker usage at 23 percent, while the U.K. is at 15 percent and Australia at 19 percent. Usage has increased from the Gartner 2015 consumer survey, which showed that 17 percent of respondents in the U.S. and 10 percent in the U.K. used fitness trackers. Most people with a fitness tracker wear it every day. For those who do not, 26 percent wear their fitness tracker at least several times each week.

According to 29 percent of survey respondents, fitness trackers are unappealing devices. They said they would not wear them or that the designs are neither fashionable nor attractive. “Fitness tracker cases and wristbands designed by fashion brands are sold as higher-priced upgrades, which may be a barrier to purchase,” said Mikako Kitagawa, principal research analyst at Gartner.

Younger people less than 45 years old tended to think a smartphone can do everything they need. People at least 45 years old state that they do not plan to purchase a fitness tracker because they are too expensive for the value.

“More fitness trackers will be sold as replacement devices rather than first-time purchases from now until the middle of 2017,” said Ms. Kitagawa. “It’s important for providers to market lower-priced fitness trackers to the older user segments, especially to older women.”

Gartner clients can read more in the report: “User Survey Analysis: Wearables Need to Be More Useful.”

Augmented Reality Market Size Report, 2024

By |November 27th, 2016|Artificial Intelligence, Charts & Graphs, Market Data, Outside Sources*, REPORTS & ANALYSIS, Sample Reports, Uncategorized, Virtual Reality|

The Augmented Reality (AR) market size was USD 640.2 million in 2015. The increasing scope of applications across different industries, such as medical, retail, and automotive is expected to drive demand over the forecast period. AR technology is in the nascent stage with a huge growth potential, and has attracted large investments contributing to the industry growth.

According to the TechCrunch, “Over USD 1.1 billion has been invested in the last two months in this space. Investors are raising funds for the increasing number of startups”. For example, Magic Leap has received an investment of USD 590 million since 2014 for its head-worn device. Another technological advancement is the smart contact lens, which can automatically remove unsafe optical radiation. The smart contact lens consists of a small display that can project images into the wearer’s eye, an antenna, a camera, and motion sensors.

Recently, in 2016, Samsung has filed a patent for these lenses, which is fitted with a camera and image display in South Korea. Google is also developing glucose-sensing contact lenses that could help in detecting diabetes by continuously monitoring the glucose level. AR offers a large number of technology solutions to the retail industry, which improves interaction between retailers and customers. Emerging trends such as pop-up stores in the retail segment is anticipated to fuel growth. Gesture-based technology is an important part of pop-up stores, along with a camera and iPad catalog, as they aim at encouraging customer participation.

Furthermore, retailers willing to enter the online shopping industry find the lack of interaction with physical products as a barrier to making purchases. AR enables virtual trial rooms, which allow customers to try on products online. For example, De Beers has a tool that allows consumers to virtually try on jewelry. Thus, technological innovations related to high-end products with enhanced features are expected to offer abundant opportunities over the forecast period.

Asia Pacific Augmented Reality Market Revenue by Component, 2014 – 2024 (USD Million)

Component Insights

The AR software segment dominated the market with a revenue share of over 95% in 2014. However, the hardware segment is expected to witness a substantial growth at a CAGR of nearly 90% by 2024.

AR systems have three basic hardware components, sensors, processors, and displays. Innovations in hardware, such as the development of smart contact lens and advanced HMDs equipped with AR processors, are expected to induce substantial growth prospects for hardware equipment over the future.Display InsightsThe smart glass segment is expected to witness a significant growth on account of the increasing demand in the industrial and enterprise sectors. Advancements in smart glasses with more miniaturization, improved battery life, and better field of view may increase the segment demand.Head-mounted displays (HMDs) are expected to dominate the market accounting for over 65% of the overall revenue by 2024.

Several companies in the industry are working on developing HMDs for AR with advanced features. For instance, the modern HMDs are capable of employing sensors of six degrees of freedom that allow free head movement.Furthermore, the rising R&D activities in this segment are expected to gain momentum. For instance, the Korean Advanced Institute of Science and Technology (KAIST) has developed a high-performance HMD, which has an inbuilt augmented reality processor that would propel the demand.

Application Insights

The automotive application segment is expected to grow at a CAGR of nearly 75% from 2016 to 2024, owing to the increasing adoption of AR across the automotive industry. Several automotive companies have started employing AR into their advertising campaigns. For example, in 2008, MINI developed a print advert that uses a webcam and a desktop computer. It provides the viewers with a 3D walk-around of its new car by augmenting the print advert. Moreover, the automotive industry players are developing apps to enhance the driving experience, which is expected to be a high impact rendering driver.The industrial sector contributed around 20% of the revenue share in 2015, which is expected to witness a decent growth at a CAGR of nearly 70% for 2016 to 2024.Increasing scope of applications in complex machinery, maintenance, and assembly, is expected to augment expansion, which will result in achieving tangible profits.

Regional Insights

The Asia-Pacific augmented reality industry accounted for over 19% in 2015, growing at a CAGR of over 80% from 2016 to 2024. China is expected to drive the regional growth with the increasing investments in AR devices and software. The mobile AR market in China is driven by the proliferation of the smartphone industry.

Local vendors such as Renren, Tencent and Baidu have invested in the technology and are expected to launch nume

Source: Augmented Reality (AR) Market Size | Industry Report, 2024

SmartWatch Market Declined 52% for Q3 2016. 

By |November 16th, 2016|Apple, Outside Sources*, REPORTS & ANALYSIS, Smart Watches, Uncategorized|

It seems like smartwatch fans are numbered.

Smartwatch sales declined 51.6% worldwide to 2.7 million in the third quarter, compared to 5.6 million shipments a year earlier, according to a new report published by International Data Analytics today (Oct. 24). Much of the downturn can be credited to the market leader, Apple, which saw sales of its Apple Watch plummet over 70% to 1.1 million.

With 41% of the market share, Apple is still leading. However, it’s a huge slip from the 72% it captured in the third quarter of 2015.

A big part of the issue for Apple is timing. The refreshed Apple Watch was released just two weeks before the end of the quarter, while the original watch debuted in May 2015. With “lower price points and improved experiences, Apple could be heading for a sequential rebound in 4Q16,” IDC wrote in its report.

Beyond Apple’s limited sales, Google and Samsung didn’t release wearables during the third quarter, which “left vendors relying on older, aging devices to satisfy customers,” noted Ramon Llamas, research manager for IDC’s Wearables team.

While devices like the Apple Watch come loaded with a variety of apps, the only clear use cases so far for such wearables are receiving notifications and tracking fitness activities. For some users, the former is less of a convenience and more of an anxiety-inducing function.

But health is showing showing real promise. Doctors have recommended that patients use fitness trackers, and, last month, Aetna Insurance announced plans to subsidize the Apple Watch for its customers.

For further proof that smartwatches are gaining traction as fitness devices, just look to Garmin. The company’s whopping 324% increase in sales from the year prior is “thanks to its growing list of ConnectIQ-enabled smartwatches and the addition of the fenix Chronos,” according to the report. Instead of trying to diversify into multi-purposes devices, like the Apple Watch, Garmin focused solely on health and fitness. The 600,000 units it shipped in the third quarter were second only to Apple.

Apple seems to be going in this direction as well, positioning the latest iterations of the Apple Watch to fitness aficionados with waterproofing, built-in GPS, and more health and fitness-oriented apps. There’s even the Apple Watch Nike+ aimed squarely at the running set.

All this represents a much more targeted audience than Apple typically goes after, but it could prove to be one that clearly sees the utility in a product that’s had trouble proving its worth

Wearable Market Value $150 Billion by 2026 (Report)

By |August 11th, 2016|Forecasts (In-Depth), Market Data, REPORTS & ANALYSIS|

In the event that these figures don’t sound insightful to you, and no matter how valid reason you might be carrying around, trust us, all your imaginations and assumptions are eventually going to take a deep breath and relax. While they do so, a research firm IDTechEx recently came up with few facts and numbers in its report that may grab your attention.

It’s quite apparent that wearable tech contributes a noteworthy foothold across consumer electronics segment, especially those products that are supposed to be worn on the person. Researchers said that the market would be worth over $30 Billion by the end of this year and grow further 10% annually to over $40bn by 2018.

“Fuelled by a frenzy of hype, funding, and global interest, wearable technology was catapulted to the top of the agenda for companies spanning the entire value chain and world. This investment manifested in hundreds of new products and extensive tailored R&D investigating relevant technology areas,” researchers noted.

In fact, it just doesn’t end with 2018. The research also states that those figures will keep on climbing high by 23% growth rate to over $100 Billion by 2023. However, those figures will then witness downfall, up to 11% by 2026 – valued at $150 Billion.

“However, the fickle nature of hype is beginning to show, and many companies are now progressing beyond discussing ‘wearable’ to focus on the detailed and varied sub-sectors,” researchers added.

The overall contribution will play a significant role across the industries such as healthcare & medical, fitness & wellness, infotainment, commercial, industrial, military, etc. The contribution of different wearable products will be comprised depending upon the location on the body such as head, ear, eyes, body (torso), arms, wrist, legs & feet, implantable, multi-location / adaptability by user or user case, etc.

Medical Animation Market worth 301.3 Million USD by 2021

By |June 12th, 2016|HealthCare (mHealth & TeleHealth), News, REPORTS & ANALYSIS|

The report Medical Animation Market by Type (3D, 2D, 4D), by Therapeutic Area (Oncology, Cosmeceutical/Plastic Surgery), by Application (Drug MoA, Patient Education), by End User (Medical Device Manufacturers, Hospitals/ Clinics) – Forecast to 2021″, This report studies the global medical animation market for the forecast period of 2016 to 2021. This market is expected to reach USD 301.3 Million by 2021 from USD 117.3 Million in 2016, at a CAGR of 20.8%. 

Browse 86 market data tables with 37 figures spread through 160 pages and in-depth TOC on “Medical Animation Market by Type (3D, 2D, 4D), by Therapeutic Area (Oncology, Cosmeceutical/Plastic Surgery), by Application (Drug MoA, Patient Education), by End User (Medical Device Manufacturers, Hospitals/ Clinics) – Forecast to 2021”

http://www.marketsandmarkets.com/Market-Reports/medical-animation-market-223188473.html

ation by life sciences & medical device companies; entry of start-ups in the medical animation market; growing pharmaceutical/biopharmaceutical and medical devices industries; increasing penetration of smartphones, tablets, and other mobile platforms; and rising geriatric population and growing number of surgeries globally are expected to drive the growth of the medical animation market during the forecast peri

In this report, the global medical animation market is segmented on the basis of type, therapeutic area, application, end user, and region. Based on type, the medical animation market is categorized into 3D animation, 2D animation, real-time imaging (4D animation), and flash animation. The 3D animation segment is expected to account for the largest share of the medical animation market in 2016. However, the real-time imaging (4D animation) segment is projected to grow at the highest CAGR during the forecast period 

Based on therapeutic area, the medical animation market is segmented into oncology, cardiology, cosmeceuticals/plastic surgery, dental, and other therapeutic areas (ENT, gastroenterology, orthopedics, ophthalmology, neurology, and gynecology). The other therapeutic areas segment is expected to account for the largest share of the market in 2016; while, the cosmeceuticals/plastic surgery segment is projected to grow at the highest CAGR in the forecast period.

Based on application, the medical animation market is segmented into drug mechanism of action (MoA) and approval, patient education, surgical training and planning, cellular and molecular studies, and other applications (medical simulation, medical legal, forensic reconstruction, and emergency care instructions). The drug mechanism of action (MoA) and approval segment is expected to account for the largest share of the market in 2016; whereas, the patient education segment is projected to grow at the highest CAGR during the forecast period.

On the basis of end user, the medical animation market is segmented into life science companies; medical device manufacturers; hospitals, surgical centers, and clinics; academic institutes, and other end users (medico-legal firms, forensic departments, government bodies, and insurance companies). The life science companies segment is expected to account for the largest share of the market in 2016 and is projected to grow at the highest CAGR in the forecast period.

Geographically, the global medical animation market is divided into North America, Europe, Asia-Pacific, and

The Rest of the World (Latin America, Middle East, and Africa). North America is expected to account for the largest share of the medical animation market in 2016, followed by Europe, Asia-Pacific, and the Rest of the World. The Asia-Pacific market is projected to grow at the highest CAGR, and serves as a revenue pocket for companies offering medical animation.

Prominent players in the global medical animation market include Infuse Medical (U.S.), Hybrid Medical Animation, Inc. (U.S.), Ghost Productions, Inc. (U.S.), Scientific Animations, Inc. (U.S.), INVIVO Communications, Inc. (Canada), Random42 Scientific Communication (U.K.), Radius Digital Science (U.S.), Nucleus Medical Media, Inc. (U.S.), AXS Studio, Inc. (Canada), Visible Body (U.S.), Elara Systems, Inc. (U.S.), Animated Biomedical Productions (Australia), XVIVO Scientific Animation (U.S.), Blausen Medical Communications, Inc. (U.S.), Trinsic Medical Animation, LLC. (U.S.), Viscira (U.S.), Understand.com (U.S.), and Medmovie, Inc. (U.S.).

Enterprise Wearables Market to Reach US$18 Billion by 2019

By |June 12th, 2016|HealthCare (mHealth & TeleHealth), REPORTS & ANALYSIS|

Growing at a CAGR value of 56.1% over the next five years, wearable device technologies will become an integral part of enterprise mobile enablement strategies. As expected, the North American region will be the largest and grow at a CAGR value of 39% over the next five years. More interestingly, the Asia-Pacific region will become the second largest market outpacing Europe by 2019 with a CAGR of 90%.

ABI Research, senior enterprise analyst Jason McNicol comments, “There are cases being made for wearables in the enterprise despite the relative newness of the technology. However, which wearables are primed for enterprise usage and adoption is a more important question. Wearable technology such as smart glasses and those used for healthcare are better suited for the enterprise as corporate-liable devices. Smartwatches, on the other hand, will most likely follow the trend of BYOD into the enterprise.”

ABI Research has identified six kinds of wearable devices: smart glasses, cameras, smart watches, healthcare, sports and activity trackers, and 3D motion trackers. Healthcare wearables, smart glasses, and smart watches will be the dominant form-factors purchased by the enterprise and used by employees.

McNicol continues, “Companies like Vuzix, in partnership with SAP, and Google Glass Explorers are testing the boundaries and capabilities of smart glass technologies for the enterprise. Smart watch OEMs Samsung, LG, Sony, and Google are also trying to position their products for the enterprise. Lastly, healthcare OEMs FitLinxx, BodyMedia, and FitBit are getting involved through corporate wellness programs. Once these companies convince enterprise customers of the added value from wearables, the market will see incredible growth.”

Practice director Dan Shey adds, “Like any digital device supporting the enterprise, wearables will need to be secured and managed.Wearable use cases in field services, maintenance, training, etc., highlight the need for enterprise mobility management providers, mobile operators, enterprise application and platform vendors, system integrators, device OEMs and other enterprise mobile suppliers to add services to support wearables. Enterprise connectivity continues at a rapid pace and its benefits are only achieved when end-to-end solutions – including security and management services – support the devices and connections.”

These findings are part of ABI Research’s Enterprise Mobility Applications, Services, and Devices and Wearables and Smart Accessories Market Research. The mHealth Market Research provides a deep dive quantification and analysis of wearables used in healthcare.

Wearable Adoption more than Doubled in 2 Yrs

By |May 13th, 2016|Market Data, REPORTS & ANALYSIS|

The adoption of wearables has skyrocketed, rising from 21 percent of the U.S. population in 2014 to 49 percent in 2016, according to a report by consulting firm PwC.

And parents are significantly more likely to own not just one, but multiple wearable devices, the report said. About 36 percent of respondents own more than one wearable.

PwC’s report, “The Wearable Life: Connected Living in a Wearable World,” is an update to a report the company created in 2014. PwC created the report to better understand the wearable tech landscape and identify trends and opportunities.

The report was based on a survey of 1,000 U.S. consumers responding to an online survey. And it noted that “the 49 percent of respondents who say they own a wearable could be slightly inflated: our definition notwithstanding, many consumers think of their smartphones as wearables.” PwC conducted a similar survey in 2014.

Above: PwC wearable report
Image Credit: PwC

It found that the No. 1 reason people buy these devices is to improve their own health (no duh). The wearables include fitness trackers/bands, smart glasses, smart watches, smart clothing, and other wearable devices. This includes, but is not limited to, products such as Fitbit, Google Glass, GoPro, Apple Watch, and others.

Both men and women like their wearables, however, men are more likely to own smart watches and smart glasses than their female counterparts, PwC said. And, not surprisingly, millennials are far more likely to own wearables than older adults. Adoption of wearables declines with age, the report said.

The report found that consumers aged 35 to 49 are most likely to own smart watches.

Above: PwC wearable report
Image Credit: PwC

Wearable band shipments set to exceed 43.2 million units in 2015 | Canalys

By |January 11th, 2015|Market Data, News, REPORTS & ANALYSIS|

Wearable band shipments set to exceed 43.2 million units in 2015

– Apple Watch to make up the majority of smart band shipments next year

Palo Alto, Shanghai, Singapore and Reading (UK) – Wednesday, 10 September 2014


Wearable band shipments will grow 129% year on year to reach 43.2 million units in 2015, of which 28.2 million will be smart bands and 15.0 million will be basic bands, according to the latest device shipment forecasts by industry analyst firm Canalys. Canalys tracks wearable device shipments and segments the market into smart bands, which are capable of running third-party applications, and basic bands, which are not.

Apple will be the biggest driver behind wearable band shipments in 2015. ‘By creating a new user interface tailored to its tiny display, Apple has a produced a smart watch that mass-market consumers will actually want to wear,’ said Canalys Analyst Daniel Matte. ‘The sleek software, variety of designs and reasonable entry price make for a compelling new product. Apple must still prove, however, that the final product will deliver adequate battery life for consumers.’

Many market observers have questioned why consumers would want a smart band, justifiably demanding compelling use cases. Hoping to address these concerns with its new wearable, Apple has demonstrated a variety of use cases, including health and fitness and personal communication, as well as other areas, such as mapping for walking navigation, workout and activity tracking, and mobile payments. Meanwhile, low-cost Chinese vendors are increasingly playing a role in the market for wearable bands. Xiaomi has attempted to dramatically lower the price of basic bands with its Mi Band. Android Wear is growing a viable ecosystem, though it cannot be used in China. Google must greatly improve its wearable platform over the coming years to better compete with Apple’s new offering. Long-term, wearable bands from all vendors must provide clear value to consumers beyond the existing capabilities of smart phones in order to justify the purchase of an additional device.

‘The basic band vendors, such as Fitbit and Jawbone, will enjoy the advantages of their lower pricing for the immediate future,’ according to Canalys VP and Principal Analyst Chris Jones. ‘Eventually, however, stronger smart band competitors to the Apple Watch will likely emerge and push smart band pricing down, threatening the basic bands. This market will undergo disruption similar to that suffered by feature phones when smart phone prices fell.’

Wearable band shipment data and five-year forecasts are taken from Canalys’ Wearable Technology Analysis service, which provides quarterly market tracking, including country-level estimates. Canalys defines basic wearable bands as devices serving a specific set of purposes that act as accessories to smart devices, are designed to be worn on the body and not carried, and that cannot run third-party computing applications. Smart wearable bands are multi-purpose devices that serve as accessories to smart devices, are designed to be worn on the body and not carried, and are capable of running third-party computing applications. Bands are wearables designed to be wrapped around the body and do not include activity trackers in the form of clips.

About Canalys

Canalys is an independent analyst company that strives to guide clients on the future of the technology industry and to think beyond the business models of the past. We deliver smart market insights to IT, channel and service provider professionals around the world. Our customer-driven analysis and consulting services empower businesses to make informed decisions and generate sales. We stake our reputation on the quality of our data, our innovative use of technology and our high level of customer service.

To view the chart(s) from this press release, and others from Canalys, download the new Insight @Canalys app today from the Apple App Store, the Google Play store or as an HTML 5 web app.

Receiving updates

To receive press releases directly, or for more information about our events, services or custom research and consulting capabilities, please complete the contact form on our web site.

PDF version
231KB
For more information:
e-mail press@canalys.com
Or call:
Canalys APAC: Singapore Tel: +65 6671 9399 or
Shanghai, China Tel: +86 21 6271 1326
Canalys Americas: Palo Alto, USA Tel: +1 650 681 4488

– See more at: http://www.canalys.com/newsroom/wearable-band-shipments-set-exceed-432-million-units-2015#sthash.i3GUO0Wg.dpuf

Apple Watch helps to Grow Demand for all SmartWatches [MarketWatch.com]

By |December 5th, 2014|Apple, Charts & Graphs, Consumer Wearables, Market Data, Outside Sources*, REPORTS & ANALYSIS, Sample Reports|

SAN FRANCISCO (MarketWatch) – For a product that so far has no price tag, no confirmed release date and is still awaiting federal authorization before it can go on sale, the Apple Watch is already considered by many to be redefining the nascent smartwatch market.

Apple Watch is already considered by many to be redefining the nascent Smartwatch market.

And Apple’s AAPL, -0.38% decision to get into the smartwatch sector is enough to make consumers consider buying a smartwatch of any kind, according to research from UBS analyst Steven Milunovich.

p6m9ikrp7bvzessienau

On Monday, Milunovich said that a UBS study based on 4,000 respondents showed that 10% of those surveyed said they were “very likely” to buy a smartwatch over the next 12 months. Milunovich also said that about two-thirds of those who said they were likely to buy a smartwatch would be making the purchase in addition to, rather than in place of, a traditional watch.

The worldwide smartwatch market is relatively small, and generated $700 million on sales of just 3.1 million such timepieces in 2013, according to Milunovich, who included FitBands with displays as part of the sales figures.

The top-selling smartwatch last year was the Galaxy Gear from Samsung, with 800,000 units sold and a 34% market share.

Milunovich reiterated that he estimates Apple will sell 24 million Apple Watches during the first nine months that the devices are on sale, a figure that is based on the possibility that 10% of current iPhone owners will buy one of the new gadgets. Apple Watch owners will also need an iPhone 5 or later phone in order to access all of the Apple Watch’s capabilities.

“Apple can’t afford to have a poor consumer experience with version one of any product,” Milunovich said. “The question is whether the first version will be sufficient to create substantial [consumer] demand.”

Milunovich, who has a buy rating and $125-a-share price target on Apple’s stock, estimates that the average selling price of the Apple Watch will be about $420 per device, and that Apple could grow sales of the Apple Watch to almost 68 million units by 2018.

Apple shares were off by almost 3% at $115.38 in late trading Monday.

The Wearables Report: Growth Trends, Consumer Attitudes, and Why Smartwatches Will Thrive (sample)

By |December 1st, 2014|Consumer Wearables, Forecasts (In-Depth), Market Data, REPORTS & ANALYSIS, RESEARCH & DEVELOPMENT|

Wearables face unique obstacles that will lead them to have less of an immediate market impact compared with tablets and smartphones. For now, most of the devices need to connect with a smartphone or tablet for most of their functionality. 

 

Wearables also suffer from a perception problem.


Consumers still don’t understand how a wearable might really benefit them. In a recent report on the wearable computing market from BI Intelligence, we also discuss other barriers to adoption, including price, lack of functionality, and style.

Wearables Scrutinized Over The Long Term


We also look at how how the wearables market will perform in the long run.  We forecast out shipments numbers, explain why the smartwatch will be the leading wearable device category going forward, and analyze proprietary results from our BI Intelligence consumer survey on smartwatch purchase intent.

Access The Full Report And Data by Signing Up For A Trial Today >>

Here are some key points from the report:


Wearables will see plenty of growth.

We estimate the global wearables market will grow at a compound annual rate of 35% over the next five years,
reaching 148 million units shipped annually in 2019, up from 33 million units shipped this year. 

The smartwatch will be the leading product category and take an increasingly large share of wearable shipments

We estimate smartwatch shipments will rise by a compound annual rate of 41% over the next five years.
Smartwatches will account for 59% of total wearable device shipments this year, and that share will expand to just over 70% of shipments by 2019

The Apple Watch will kick-start growth in the overall smartwatch market.

The Apple Watch will account for 40% of smartwatch shipments in 2015 and reach a peak 48% share in 2017.

Fitness bands and miscellaneous wearable device types, like smart eyewear, will continue to cater to niche audiences.

Fitness bands, because of their appeal to niche audiences interested in health and exercise, will see their share of the wearable device market contract
to a 20% share in 2019, down from 36% this year. There will be some blur between fitness bands and smartwatches.

Now that both Apple and Google are in the smartwatch market, they will dominate, much as they have in the smartphone and tablet markets.

Because these platforms make up over 90% of the entire mobile platform market, many mobile users interested in wearable devices
will gravitate toward Apple Watches and Android Wear-based devices.


 

Smartwatches in particular must become standalone computing devices with more robust functionality.
Barriers still persist, and these will inhibit consumer wearables adoption and usage for the devices to become mainstream. Other barriers include small screen size, clunky style, limited battery life, and lack of a “killer app” that can drive adoption.

In full, the report:

  1. Forecasts annual shipments of wearable computing devices between 2014 and 2019.
  2. Breaks down wearable computing device shipments by device category, including smartwatches, fitness bands, and other wearables like Google Glass.
  3. Reveals and analyzes BI Intelligence smartwatch consumer survey results.
  4. Discusses barriers to mainstream adoption including style limited functionality, and lack of a killer app ecosystem.
  5. Looks at the potential for Apple and Google to dominate with Apple Watch and Android Wear.

For full access to all BI Intelligence’s charts, data, and analysis on the mobile and Internet of Things industry, sign up for a two-week trial.

Business Insider…Continue Reading…